Occupational licensing takes a toll on the American workforce, whether it be for florists in Louisiana or nail salon workers in Connecticut. It also weighs heavily on the healthcare workforce through strenuous scope-of-practice laws and regulations, often administered by licensing boards controlled by healthcare industry insiders.
Some of these licensing requirements are arbitrary, antiquated, or self-interested. By restricting the supply of care, licensing requirements harm a broad swath of the American public, and perhaps disproportionately, America’s military families.
A 2017 survey by the US Chamber of Commerce indicates the unemployment rate among military spouses and spouses of recent veterans was 16 percent–nearly four times the general population’s 4.3 percent unemployment rate.
Occupational licensing plays a role in this staggering rate of spousal unemployment (though the magnitude of that role is unclear). Some 35 percent of military spouses in the workforce require a license or certification for their job, and they are seven times likelier to move across state lines than their civilian counter parts. Another 41 percent report it takes four or more months to find work after relocating. With military families facing frequent relocations, acquiring new occupational licenses in each new state becomes a repetitive and costly chore.
According to the Bureau of Labor Statistics’ 2016 American Community Survey, only 57 percent of military spouses are likely to participate in the labor market, compared to 76 percent of the general working-age population. Part of the problem is mobility friction: 22 percent of military spouses report that they are unable to transfer their professional licenses from one state to another. The burden of occupational licensing is compounded by another factor: 41 percent reported that companies did not want to hire them because of the likelihood of another interstate move.
Underemployment is also a key issue for military families. Spouses feel they are underutilized in the workforce. Of currently employed spouses, 71 percent believe their past education or training is more than required for their current job, while 63 percent previously held positions that required more skill and involved greater responsibilities. Additionally, 37 percent of military spouses report being in career fields outside of their preference, with 48 percent being paid less than their previous occupation.
These spouses are also working part-time at substantially higher rates than their civilian counterparts. Around 32 percent report being employed part-time—a 12-percentage point gap over the general population rate of 19.6 percent. These data points are even more discouraging because half of those respondents reportedly desire full time labor.
At a time when 60 percent of US households are currently considered dual-income, and with shortages in available workers in fields like nursing, we should be doing everything we can to reduce barriers to employment for these affected parties.
Many states have agreed or passed legislation to facilitate some type of license portability or expedited licensure, but a recent audit by the University of Minnesota suggests these reforms have not been successful. Only 40 percent of states include information about military spouse licensure on their websites, and most customer service representatives questioned were unaware of the relevant legislation.
Federal legislation currently moving through Congress would allow the Secretary of Defense to enter into agreements with the Council of State Governments to offer up to $1,000 reimbursements for these military spouses affected by licensing bureaucracy and fees.
But this is the equivalent of a bandage on a broken bone.
The real way to mend this wound is to recognize out-of-state occupational licenses for most professions, including the practice of medicine. (Given the idiosyncrasies of state law, law licenses are an exception.)
The state of Arizona recently did just that, and commentators noted the significant number of military spouses affected by occupational licensing. Arizona’s new law will allow them to start working immediately, rather than trudging through a burdensome relicensing process. This policy will help working families of all walks of life. The fact that it alleviates an invisible problem faced by military families is just another feather in the cap of occupational license reform.
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