Dozens of job-killing licensing laws identified in new study
ST. PAUL—A first of its kind report concludes that dozens of state licensing laws make it harder for low-to-middle income Minnesotans to find a job, forcing them to waste valuable time and resources obtaining a license that may not even be required for the same job in another state.
License to Work, a study by the Institute for Justice, analyzes license requirements for 102 occupations in all 50 states and the District of Columbia. In the 1950s, just one in 20 workers needed what the authors call “government permission to pursue their chosen occupation”, compared to nearly one in three today. (See video here).
As a result, the average US worker spends nine months in training or education, takes one exam and will spend more than $200 in fees. Minnesotans, on average, must take two exams, spend $164 in fees and 290 days in training or education.
“We weren’t measuring doctors and lawyers, we’re measuring occupations that are ideally suited to people who are entering the economy or re-entering the economy,” said Dick Carpenter, the study’s co-author. “Much of our economic growth comes from entrants on the first few rungs of the ladder. So if we’re imposing burdens on these people, we’re in essence imposing a drag on our economic growth.”
Minnesota requires licenses for 36 of the 102 occupations covered in the survey, making it the 36th most extensively licensed state. A handful of Minnesota’s licensing laws were singled out as among the most stringent in the country. State requirements for installing fire and security alarms are about twice the national average, barbers must train nine months longer than the average, while horse trainers are required to train for 700 days compared to an average of three months in other states.
Just 15 of the occupations in the study are required to be licensed in 40 or more states. Most of the 102 occupations are not required to have a license at all in at least some states. For example, Minnesota is one of just two states to license electrical helpers who hold materials or tools and clean up a work site, one of seven states to license packagers who hand pack products and materials, and one of six states to license title examiners who search real estate records, according to the License to Work study.
“It undermines the supposed need for licensure. If licensure were really necessary, you would see an occupational license in all states and consistently so across all states,” said Dick Carpenter, the study’s co-author. “The fact they don’t suggests there is no real significant threat to public health and safety. Shampooers, for example, are licensed in a number of states. Is there really a threat to public safety in states that don’t license shampooers?”
Excessive state licensing laws result in a loss of 15,000 potential jobs, according to research by University of Minnesota professor Morris Kleiner. The trend also costs Minnesota consumers $3.6 billion more for services annually, while also stifling $1.1 billion in economic growth each year, according to Kleiner’s work.
Legislation was introduced in the 2012 Minnesota Legislature to reform occupational licensing regulations “to shift the burden from entrepreneurs to the government to justify restrictions on Minnesotans’ right to pursue an occupation.” Proponents expect the bill to be reintroduced next legislative session.
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