February 17, 2015

Occupational Licensing Is Short-Sighted, Hurts Low-Income Workers

Edward J. Timmons

Associate Professor of Economics, Saint Francis University
Summary

Our study is just a glimpse of the inefficiency and hardship generated by unnecessary occupational licensing laws. Countless low income workers are being forced to jump through arbitrary hoops to obtain employment with very little observable benefit accruing to consumers.

The latest reading of the labor market in the United States from the Bureau of Labor Statistics brings to mind a veteran prize fighter trying to pull himself up from the mat after a dizzying flurry of blows. An easy way to help the U.S. labor market regain its championship form would be a broad reconsideration of occupational licensing. We, along with countless others, applaud the president for including $15 million in his recent budget to study the rationale for occupational licensing in the United States.

The scope of workers directly affected by U.S. occupational licensing laws has steadily increased over the last several decades. Today, nearly 30 percent of the workforce is required to obtain a license to work at their current place of employment. Occupational licensing laws make it illegal to work in a profession without first meeting specific requirements (such as a specific degree or passing a test).

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