Jul 15 2016
It is becoming increasingly obvious that the American labor force – one of the economy’s core building blocks – faces many structural challenges today. Millions of Americans are out of work, and for a longer period of time – six months on average – than in recent economic recoveries. Millions more are underemployed, working in part-time jobs even though what they want and need is full-time work. And the share of Americans participating in the labor market is hovering near its lowest point since 1977.
Meanwhile, there’s a growing sense that today’s economic challenges are somehow different – more intractable – than those that we have overcome in the past. Americans aren’t just losing jobs, they’re losing faith in the future and in the basic fairness of the American economy.
A recent survey of than 1,500 unemployed Americans found that a full 83 of respondents agree that “The way the economic system is set up in the United States only benefits the rich.” And the worst part is, they’re not entirely wrong.
One of the most pernicious forms of economic privilege today is the proliferation of occupational licensing requirements imposed on American workers by state governments. Occupational licensing laws require individuals to meet particular qualifications – like passing an exam, obtaining a professional certification, or completing a training course – in order to work in certain jobs.
Ostensibly, the purpose of licensing requirements is to protect public health and safety. For certain occupations – like physicians or lawyers – this makes perfect sense. But what about truck drivers, athletic trainers, hair stylists, florists, preschool teachers, or pest exterminators? It’s hard to see why people who want to work in these jobs should be required to pass exams, complete extensive training, and obtain government permission before they can legally be hired. And yet that’s exactly what has happened in states across the country.
In 1950, fewer than 5 percent of American workers were subject to licensing requirements. Today, that figure stands at around 30 percent. And in many cases, would-be workers have to pay large sums of money or wait long periods of time – or both – just to obtain the government’s permission to work.
"The spirit of enterprise is still alive and well in this country. But too often misguided government policies stifle it before it can grow and fulfill its potential. Sadly, this is especially true for the most disadvantaged among us. "
The specific requirements vary across states and occupations. They range from the sensible to – more often – the absurd. But the upshot is always the same: by making it more difficult to enter an occupation, licensing requirements block younger and less fortunate workers from better and higher-paying jobs.
That’s why Senator Sasse and I recently introduced the Alternatives to Licensing that Lower Obstacles to Work (ALLOW) Act, a bill that leverages Congress’s Article I authority over federal enclaves – including the District of Columbia, military bases, and certain National Parks – to advance several models for licensing reform that state governments can follow.
The best part about this bill is that states can follow any one of these models right away. And at a time when the American worker is losing confidence in the future and the fairness of our economy, governors and state legislators should waste no time in implementing their own versions of these reforms.
The spirit of enterprise is still alive and well in this country. But too often misguided government policies stifle it before it can grow and fulfill its potential. Sadly, this is especially true for the most disadvantaged among us.
Rethinking our approach to occupational licensing laws – so that our economy has room for the full range of human talents, aspirations, and imaginations to flourish – is a modest but important step in making sure that our economy is set up to benefit the hard work of all Americans.