Professional occupational licensing ostensibly exists to increase safety and satisfaction among consumers. However, licensing requirements add cost and time to operating a business, thereby increasing prices and decreasing options for customers. Furthermore, regulatory capture results in benefits to powerful businesses at the expense of fledgling companies and their patrons, and women in business bear a disproportionate amount of cost from licensing requirements.
Consumers at large understandably balk at having some licensing mandates removed entirely. In industries that have long been heavily regulated by the government, particularly where safety is a major concern, many buyers hesitate to allow the market to provide its own standardization. However, many legislators are loosening redundant restrictions and lowering price tags of compliance, without having to delve into more controversial deregulation.
License Reciprocity
Even if states choose to maintain licensing requirements for an industry, they can recognize the licenses granted by other states instead of mandating local ones. This is especially helpful to military spouses and others who must move frequently.
West Virginia recently passed SB 458 (with a staggering 97-0 vote in the House), which guarantees universal reciprocity for licenses in the numerous professions regulated by Chapter 30 of the State Code, as long as the applicant meets basic criteria of good standing.
Residents of one state always use services overseen by another when they travel, likely without a second thought. If they do not hesitate to stay in a hotel where everyone from builders to staff were licensed locally, they have little reason to worry if those same licenses are recognized in their home state. Reciprocity thus provides an alternative to the mounds of paperwork and stiff fees often encountered by skilled professionals simply trying to operate in a new place.
Fee Removal
License costs create hurdles even for those who have done the work to obtain permission. Sometimes, renewing a license requires no proof of merit, just a fee. This obviously does not improve safety or quality of any good or service, and resources and staffing required to collect fees just add to the absurdity.
In Connecticut, Gov. Ned Lamont is pushing back with his proposal to remove licensing fees. He has suggested eliminating them in some fields, possibly saving $18.8 million for the 180,000 affected professionals. With some now paying up to $375 for a license, this financial burden needs to be removed. In fact, in order to even the playing field, every professional should have the same opportunity.
Scope Of Practice Expansion
Practitioners who can competently perform duties not specifically listed under the current scope of practice allowances should be permitted to do so. Regulatory capture has greatly diminished the freedom of professionals and customers to engage in voluntary and safe transactions.
This pertains largely to health care, where higher-earning practitioners such as physicians often shut out less-expensive alternatives like nurse practitioners. However, the issue extends into areas not commonly associated with the term, including requirements that cannot reasonably be attributed to safety concerns.
Until last year’s HB 933, Louisiana required a test for a florist to legally practice professional flower arranging, effectively applying scope of practice laws to “protect” consumers from an imperfect Mother’s Day bouquet. (Fortunately, florists can now practice freely in all 50 states, with no significant reported harms resulting.)
Further Improvements
These actions are just three of the easiest means to improve free exchange in the market. State legislators need to think outside the box and seize every available opportunity to remove frivolous licensing barriers, because this is one area where they can make a big improvement for constituents with relatively painless legislation changes.