A new report from the Institute for Justice (IJ) joins others in the call for occupational licensing reforms. The report indicates that the current system puts a heavy burden on numerous professions, destroying lives, ruining dreams and costing billions.
The report looks at the costs of licensing requirements on a national level and within 36 different states. The authors say that the strict requirements for many professional licenses deprive the national economy of around 2 million jobs per year, hitting some states harder than others.
California is particularly hard-hit, losing around 196,000 jobs each year. While conservative estimates put the economic losses for the nation at around six billion dollars annually, the authors say a true estimate is likely closer to $184 billion — with $22 billion coming from California alone.
Aggressive licensing requirements that are becoming increasingly complex by the year in many occupations prevent a lot of people from going into a career in the first place. Others are trapped in their current state because the process of obtaining a new license in another state if they move is so arduous. A license to practice a profession in one state means nothing in another.
Byzantine licensing regulations also hurt consumers by limiting their choices and raising the cost of the services they can access. Worse, there’s little evidence that the complex licensing requirements do anything to improve consumer safety.
Licensing requirements often impose a financial burden — and barrier — for many seeking to enter a profession in the first place. Low-income and middle-income individuals who hope to break into a profession often hit financial barriers caused by licensing requirements.
It’s also difficult to justify the amount of time that someone has to devote to obtaining a professional license. For example, an emergency medical technician in California only needs 160 hours of training to obtain a license. To work as a cosmetologist in California, however, you need to clock 1,600 hours of training!
Congress recently addressed the issue of licensing reform through the New Hope Act and other measures — but there’s a lot of ways to go before meaningful change happens.
Protect your professional license if you have it. If, for any reasons, your professional license is in danger, don’t try to handle the situation on your own. Legal assistance is available.