Occupational Licensing Reform Push Grows

Occupational licensing is too often onerous, and poorly coordinated across state lines, critics say. While some workers may benefit, many do not, and consumers pay. Photo: Clary Sage College.

Jerry Schmidt files horse teeth at his farm near Port Angeles, Washington for a fraction of a veterinarian’s cost. After a formal complaint from a local veterinarian in 2012, the Department of Health issued a cease and desist order to prevent Schmidt from receiving money for the practice without a veterinarian license, even though it is legal when done for free. That’s one story Washington State Rep. Matt Manweller (R-13) likes to tell about troubling occupational licensing standards in the state.

“The great scam is that lobbyists from special interest groups convince individual legislators that [licensing requirements] are done for safety and consumer protection and it almost never is. It is designed to make sure outsiders cannot compete with the insiders,” Manweller told Lens.

The problem has caught the attention of lawmakers nationwide, and Manweller said he might in 2017 reintroduce a bill in Olympia to remove unnecessary licensure for certain jobs in Washington.

Washington Rated Poorly

The state gets low marks for dealing with the challenge. The Thumbtack Small Business Friendliness Survey asks thousands of business owners to grade states on government policies affecting their businesses. Respondents gave Washington between a “D+” and a “C+” for licensing practices over the last four years.

“While it certainly makes sense to require certification for some occupations, the way Washington does it really is nonsensical in some ways,” said Erin Shannon, director of the Center for Small Business at Washington Policy Center.

Twists And Turns Of Braiding Regulation

In June 2014, Salamata Sylla, a Washington resident and hair braider, sued the State Department of Licensing after two inspectors from the department said she needed a cosmetology license to braid hair for money. Almost a year later, the department agreed to exempt hair braiders and Sylla dropped the lawsuit.

Washington residents pursuing a cosmetologist license still face daunting requirements. They need a total of 1,600 schooling hours or 2,000 apprenticeship hours before qualifying for the licensing exam. Students enrolled in Washington-based cosmetology schools paid an average of $13,748 in 2014.

A boxing announcer in Washington is required to obtain a license with no requirement other than sending in money for what is essentially “a license for the sake of a license,” according to Manweller.

Another Approach: Peer Reviews Online

Last year, Manweller introduced a bill which would require the Department of Licensing to create a website for public comment and review in lieu of a license for individuals working in a number of occupations. These included auctioneers, manicurists and boxing announcers.

The approach “actually increases the likelihood of holding people accountable when they’re not using practices that are sanitary and safe,” said Todd Myers, environmental director for the Washington Policy Center. Meyers helped Manweller research and craft the bill.

The bill was ultimately held back in order to make changes based on testimony from legislators and others. Manweller told Lens if he is in the majority for next session he will reintroduce the bill but if “I’m in the minority I won’t because it will have no chance,” he said.

Immigrants, Military Spouses Affected

Marie-Josee Kravis, a senior fellow at the Hudson Institute, wrote in the Wall Street Journal: “For immigrants, the tedious and costly process of obtaining a license often delays their integration into the workforce. Thirty-five percent of military spouses work in professions that require state licenses, but they are also more likely to move across state lines than civilian counterparts, requiring multiple and lengthy re-licensing reviews.”

Kravis added that lawmakers need to re-examine licensing requirements to make sure they are still appropriate, and also coordinate such rules across state lines through formalized agreements.

A reduction of occupational licensing could translate into significantly higher employment, better job matches and improved customer satisfaction, according to a 2011 policy paper for the W.E. Upjohn Institute for Employment Research.

“Licensing results in 2.85 million fewer jobs” and the annual costs to consumers run as high as $203 billion, according to the report’s principal author Morris Kleiner, a professor of public affairs at the University of Minnesota. Kleiner wrote, “low-income consumers, in particular, would benefit because reduced barriers to entry would reduce the prices of services provided.”

However, Kleiner also noted that licensing has benefits because it requires a certain level of education and training, and licensees “will be able to recoup a higher return for their investment if they are not competing against lower-quality substitutes.”

Data from the U.S. Department of Labor found people with a certification or license earned about one-third more salary than those without credentials. Licensed workers also were less likely to be unemployed, at 2.7 percent, compared to 6.1 percent of those who were not licensed.

Multi-State Compacts Help

One year ago, the White House released a set of best practices for state occupational licensing reform.

Last month, the White House announced the Department of Labor will award $7.5 million to one or more non-profits working with at least three states to ensure licensing requirements are not overly burdensome and to improve portability for occupational licenses across state lines.

Created in 2000, the Nurse Licensure Compact (NLC) program allows nurses to practice in their home state and any of the 25 participating states, without obtaining additional licensure. Washington is not currently a member state.

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