Panels Outline Arbitrary, Burdensome Occupational Licensing Rules | Eastern North Carolina Now

    Publisher's note: The author of this post is Dan Way, who is an associate editor for the Carolina Journal, John Hood Publisher.

Experts note many licensing boards have scant accountability


    SAN ANTONIO, Texas     Who should be required to get more training: An auto mechanic changing your faulty brakes, fixing your misaligned steering column, and replacing a leaky fuel pump - or a barber taking a little off the top?

    If you answered the barber, you might be a government regulator in Michigan.

    Jarrett Skorup, marketing and strategic outreach manager for the Mackinac Center for Public Policy in Michigan, said an auto mechanic needs no formal education to ply his trade, only a $6 fee to take a test. A barber must complete 1,800 hours of training, more than the 1,500 hours of flight training for an airline pilot.

    Skorup was one of several analysts speaking on panels at the State Policy Network annual convention in late August about the economic drag and unfair consequences of occupational licensing. They called many licensing rules arbitrary, and most of them economically, morally, and constitutionally wrong. The rules hit poor people hardest, with many preventing anyone with even a minor criminal record from getting a license. The restrictions often spur the development of black markets.

    Skorup said occupational licensing mandates almost always are justified by citing health and safety concerns, even when the link seems shaky.

    A report by the Institute for Justice found in the 1950s one in 20 workers had to secure an occupational license to work. By 2012, the ratio had risen to nearly one in three.

    Detroit licenses 60 occupations, everything from furniture moving and window washing to landscapers and animal hide haulers.

    "Of all the rights we enjoy, the right to work in the job of your choice receives the least protection under the law," said Jon Riches, director of litigation for the Goldwater Institute in Arizona.

    Licensing boards often are unaccountable and can impose new restrictions without getting approval from elected officials, Riches said. Other legal hurdles are erected by judges, who create inventive ways to justify burdensome regulations, he said.

    The freedom to work is a hallmark of American liberty, and shouldn't be relegated to such secondary status, Riches said.

    Some occupational licensing boards are high-handed, said Tom Newell, a senior fellow with the Florida-based Foundation for Government Accountability. He had run-ins with some licensing agencies during his six years as a member of the Oklahoma House of Representatives, when he chaired a government oversight and accountability committee.

    "Most of those occupational licensing boards are captured by the very people they regulate," Newell said. They had no interest in examining and reforming the process. The boards were financed by fines, fees, and license renewal costs. That revenue paid to hire lobbyists who were chummy with legislators, many of whom had little knowledge or interest in the boards' operations.

    Some of the licensing boards pushed back against Newell's reform efforts, stating they were self-funded so the legislature had no authority over them. Newell reminded them they were created by the state, and under its jurisdiction. Last year, Oklahoma Gov. Mary Fallin formed a task force to comprehensively review the state's occupational licenses, and weed out those that impede employment.

    Dick Carpenter, director of strategic research at the Institute for Justice, said a profession can protect its brand without demanding occupational licensing. Simple market competition with consumer protections against deceptive trade practices can shield the public from shady operators, Carpenter said. Business inspections, mandatory bonding or insurance, business registration, and business certification are other less intrusive safeguards.

    The Institute for Justice has developed model legislation for state legislatures. It includes provisions stating each person's right to earn an honest living, regulations that promote competition, sunset provisions, and reforming criminal justice policies so offenders get an opportunity to gain meaningful employment.

    Several panelists said a major victory for the right to work occurred in 2015, when the U.S. Supreme Court ruled against North Carolina in an antitrust lawsuit.

    In that case, independent teeth-whitening operators sued the North Carolina State Board of Dental Examiners for ordering them to stop providing services unless they acquired a dental license.

    But the victory has not pushed other states to pass legislation limiting licensing boards. Lawsuits remain one of the few ways to force change.

    "It's a real way that reform could be instituted," Carpenter said. "But finding the right circumstances and the right client is a challenge."
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