Moving to a new state and finding a job could soon be a lot easier
Moving homes is stressful enough, but millions of people face another burden when moving to a new state: having to acquire a new, costly license just to keep working in the same job.
Last year, Arizona made it easier to move there by passing legislation to recognize occupational licenses from other states. This means that workers in licensed industries, such as teaching, nursing, and cosmetology, can now move to Arizona and continue their careers without having to go through the burdensome and often expensive process of obtaining a new license. Their old license moves with them.
The Arizona model, known as “universal recognition,” is now catching on like wildfire in state capitals across the country. It could lead to a sweeping wave of occupational licensing reform — all that’s needed is for more lawmakers to embrace this common-sense reform.
Occupational licensing is the practice by which governments, predominantly at the state and local level, require workers to obtain a government license or permit to engage in a certain profession. Licensing laws are often justified on the grounds of protecting public health and safety, with defenders evoking images of unlicensed amateurs conducting brain surgery.
But the reality is that licensing requirements have spread far beyond occupations where they can make sense, such as licenses for doctors and engineers, and now apply in fields as innocuous as floristry and blow-drying hair. Today, 1 in 4 jobs requires a license, up from 1 in 20 in the 1950s.
Even when licensing serves to protect public health or safety, it has become harder for the most economically disadvantaged among us to acquire a license due to the time, fees, and education necessary to acquire one. The result is that millions of would-be workers are locked out of the workforce because they lack the means to obtain a license. Consumers also suffer, because restricting the number of workers in an occupation limits competition, which in turn raises prices.
Worse yet, licensing often doesn’t even improve safety standards as supporters claim.
For example, just consider the rampant health problems in nail salons, a heavily licensed industry whose professionals have to complete hundreds of hours of training. This may be due in part to the fact that much of the mandatory training required to obtain a license in many fields is rarely even related to health or safety issues.
Licensing laws also restrict mobility.
Research has shown that interstate migration rates for individuals to states with licensing exams are more than 30% lower than states without such a requirement. Impinging on mobility is particularly harmful, as the ability to move for work has traditionally been associated with higher levels of income growth.
Given the growing political consensus against excessive occupational licensing (both the Trump and Obama administrations have voiced concerns over the practice), policymakers nationwide have started to ramp up efforts to overhaul licensing regimes. At first, much of the focus was on repealing or reducing individual licensing burdens in specific industries. Recently, additional attention has been given to the plight of military spouses who often must cross state lines, and therefore apply for a new license, as a result of their significant other’s military career requiring frequent moves.
While these discrete reforms are vital, Arizona’s universal recognition reform is the most comprehensive occupational licensing reciprocity model to date.
The idea has caught on: Pennsylvania followed suit with similar legislation last year, and so far in 2020, universal recognition bills are being pursued in Virginia, West Virginia, California, Ohio, Missouri, Georgia, New Hampshire, Indiana, and New Jersey. If these are enacted and similar laws continue popping up around the country, as is likely, movement between states could become a lot easier for millions of people.
To be sure, there is plenty of room for reforming and ridding ourselves of unnecessary licensing regulations beyond just granting universal recognition. The ideal fix for most licensing laws is to get rid of them altogether, or to use less-burdensome regulatory alternatives such as private certification or inspection regimes.
But in the meantime, laws that streamline the ability to move beyond state lines without dropping out of the workforce should be embraced by policymakers across the ideological spectrum. Greater workforce freedom is knocking at the door — politicians just need to heed the call.