Occupational licensing practices in Florida rank among the most stringent in the nation, creating barriers to employment and raising consumer costs, according to a study released last month.
“Florida … licenses 56 of the 102 lower-income occupations studied here, and its licensing laws rank as the fifth most burdensome,” the study by the Institute for Justice in Arlington, Va., said. “On average, they require $318 in fees, 693 days of education and experience and around one exam.”
States such as Mississippi, Arizona and Florida have been trying to tackle the issue in recent years in order to provide more economic opportunities for those who may have fewer skills. Legislation authored by Florida Rep. Halsey Beshears, R-Monticello, would remove regulations on certain professions, including hair braiders, boxing timekeepers and announcers, and revise how many others are licensed.
Many observers fault the Florida system for being a drag in economic expansion and job growth.
“Florida succeeds in many areas of economic prosperity,” Sal Nuzzo, vice president of policy at the James Madison Institute in Tallahassee, told Watchdog.org. “Sadly, occupational licensing is not one of these success stories. Florida is consistently ranked as one of the most burdensome states for licensing, and the results are stifled entrepreneurialism and lost jobs.”
Those who claim that licensing by public boards protects public safety and other concerns are often mistaken, according to Nuzzo, who favors removing a large number of occupations from the current regulatory scheme to spur economic growth. Indeed, scholars from the Wisconsin Institute for Law and Liberty estimate that within just 10 licensed occupations, rolling back stringent licensing requirements would boost job growth by 7 percent.
“Government permission slips are time and again proven to be less effective to methods like performance bonding, insurance certifications and other market-based ways to protect consumers,” Nuzzo said.
Dick Carpenter, one of the authors of the Institute for Justice report, pointed to oddities in the Florida regulations, which require more education and training for interior designers than for emergency medical technicians.
“It is irrational to think that someone who provides life-saving services will spend about a month in education and training,” Carpenter told Watchdog.org, “but someone who works as an interior designer or cosmetologist or any number of other occupations would have so much more strenuous requirements.”
Reforming a state’s occupational licensing system can be complicated, requiring several bills to cover multiple occupations. In addition, those within the profession may balk at easing restrictions because licensing tends to protect them from outside competition, he said.
“When a license is created, it creates protection,” Carpenter said. “The license erects a fence around the occupation.”
In turn, lobbyists hired by the affected industry or occupation will fight to protect the wage levels of those who work in a particular field, according to Carpenter.
“Historically, it proves to be challenging because the members of the industries that are already licensed will mount a ferocious campaign in order to maintain the license,” he said.
Rigid rules on occupational licensing have multiple effects in the economy, Carpenter said.
These include creating a scarcity of available services, raising consumer costs, allowing those within an industry to effectively set wages and putting up barriers to upward mobility, he said. The latter occurs when a resident in one state, whose occupation is unregulated, might want to move to a more prosperous state, according to Carpenter. But if the worker finds that the occupation is subject to licensing in the other state, he might opt to stay put, thereby limiting his ability to ascend the economic ladder, he said.
The issue doesn’t divide people according to party lines, Carpenter said. The White House under former President Barack Obama released a report that expressed skepticism about occupational licensing, and the Little Hoover Commission in California, a blue state, came out in support of licensing reform, he said.
“This is not an issue that is owned by one party,” Carpenter said.
Senior research analyst Stephen Slivinski of Arizona State University, who has also studied the issue, agrees with Carpenter that a single party’s dominance of a state legislature often is not a predictor of how stringent a state’s licensing laws are.
“The primary factor is how much lobbying clout incumbent businesses have in the state legislature,” Slivinski told Watchdog.org. Licensing laws "have been used to keep out competition.”
Slivinski’s focus has been on how licensing laws from state to state affect recidivism among those released from prisons. States with high recidivism rates, he said, tend to have two things in common: high occupational licensing burdens and statutes that say those with criminal records are barred from applying for such a license.
“Gainful employment is able to cut recidivism rates dramatically, sometimes as much as half,” Slivinski wrote in a paper earlier this year.
And fixing the overall problem may require a more top-down approach, he said.
“A lot of these reform efforts are often driven by the governor,” Slivinski said, since it tends to be more difficult to get disparate lawmakers to come to an agreement on a reform plan on their own.