Remove Barriers to Jobs
Roll back unnecessary licensure requirements and expand apprenticeships.
For low-income individuals and their families to break out of poverty, a first job is an absolute necessity. Without it, low-income individuals cannot build work-based skills that lead to promotions and wages that can support them and their household.
At every juncture, state policymakers must align their educational and workforce programs to ensure clear and open pathways for individuals to succeed. These pathways must enable students to learn and earn wages as they work. They must be clear of unnecessary obstacles, like excessive fees or redundant hourly education or training requirements.
When policymakers remove barriers to work, they prove their belief in the dignity of every individual—because every individual can contribute to their own advancement and the advancement of their community.
Solving the Problems
A growing option for those seeking education aligned with labor-market needs is to enroll in an apprenticeship program, which offers a combination of classroom instruction and paid field experience depending on the credentials needed and valued by the occupation. The K-12 system needs to fully embrace youth apprenticeships, and students need to be made aware of the benefits and opportunities. Looking to Georgia’s program as an example, 60.3 percent of youth apprentices, excluding one particular program that targets at-risk students, received a full-time job offer from their employer after completion.1Robert Lerman, Daniel Kuehn, and Jessica Shakesprere, Youth Apprenticeship in Georgia: Experiences and Recommendations (Urban Institute and Georgia Center for Opportunity, 2019), 23, https://georgiaopportunity.org/wp-content/uploads/2019/04/19_043_GCO_Urban_Inst_Pres_Web.pdf.
The federal government has encouraged the expansion of apprenticeship programs in recent years. Between 2017 and 2020, Congress and the executive branch spent over $1 billion to expand experiential training and promote informal programs. According to the U.S. Department of Labor, 3,143 new apprenticeship programs were established nationwide in FY 2020, a 73% growth since 2009.2“Apprenticeship Sponsors and Trends,” Registered Apprenticeship National Results Fiscal Year 2020, Employment and Training Administration, US Department of Labor, accessed November 30, 2021, https://www.dol.gov/agencies/eta/apprenticeship/about/statistics/2020.
Despite this growth, just 636,000 individuals were enrolled in civilian apprenticeship programs in 2020,3“Apprenticeship Sponsors,” Employment and Training Administration. compared with the nearly 20 million students who attended degree-granting post-secondary institutions in 2020.4“Total fall enrollment in degree-granting postsecondary institutions,” Digest of Education Statistics, National Center for Education Statistics, accessed November 30, 2021, https://nces.ed.gov/programs/digest/d20/tables/dt20_303.10.asp. This is far below their capacity. The federal Registered Apprenticeship Program is not keeping up with workforce demand. Reform of the federal apprenticeship program should be a long-term goal but will be very difficult due to the entrenched opposition to reform and the complexity of the federal program.
How to implement
- Maximize opportunities for youth apprenticeships to help students find meaningful education and employment.
- Recruit employers willing to host youth apprenticeships. Work with local chambers of commerce and industry groups to accomplish this. Create documents showing benefits to employers of hosting youth apprentices.
- Gather stories from companies with youth apprenticeship programs to help encourage others to do the same.
- Measure increases in youth apprenticeship participants to track success.
- Set goals for desired numbers of youth apprenticeships.
- Ensure state agencies that track employment metrics are fully integrated with educational institution accountability systems.
- Pass legislation and make administrative rule changes to reinstate Industry-Recognized Apprenticeship Programs (IRAPs) to encourage employers to take the lead in career training for fast-growing sectors. Expand the list of applicable industries to include the construction trades.
Youth Apprenticeships – Georgia
Georgia has invested in a productive youth apprenticeship program, which is currently small.5 “Apprenticeships,” Georgia Center for Opportunity, accessed November 30, 2021, https://georgiaopportunity.org/employment/apprenticeships/. Georgia produces a yearly report that tracks graduates for three to five years.6Lerman, Kuehn, and Shakesprere, Youth Apprenticeship in Georgia.
Industry-Recognized Apprenticeship Programs (IRAP) – National.
A recent federal effort to expand apprenticeship programs may serve as an example for future reforms that give employers the opportunity to lead apprenticeship programs. Following President Trump’s Executive Order 13801 in June 2017,7Exec. Order No. 13801, 82 FR 28,229 (June 20, 2017), https://www.federalregister.gov/documents/2017/06/20/2017-13012/expanding-apprenticeships-in-america.the U.S. Department of Labor issued a notice creating Industry-Recognized Apprenticeship Programs (IRAP).8“Apprenticeship Programs, Labor Standards for Registration, Amendment of Regulations,” 84 FR 29,970 (June 25, 2019), https://www.federalregister.gov/documents/2019/06/25/2019-13076/apprenticeship-programs-labor-standards-for-registration-amendment-of-regulations. This promoted the development of industry-driven apprenticeship programs by third parties such as trade and professional associations, employers, educational institutions, unions, labor-management organizations, and states.9Ben Penn, “White House Scraps Trump’s Industry-Led Apprenticeship Model (1),” Bloomberg Law, February 17, 2021, https://news.bloomberglaw.com/daily-labor-report/white-house-scraps-trumps-industry-led-apprenticeship-system. Whereas the Registered Apprenticeship Program primarily served industries such as construction and manufacturing, IRAP gave freedom to other industry sectors, such as health care, to develop standards adapted to their particular needs.10Isabel Soto, “Industry Recognized Apprenticeship Programs and the Biden Administration,” Insight, American Action Forum, April 6, 2021, https://www.americanactionforum.org/insight/industry-recognized-apprenticeship-programs-and-the-biden-administration/. However, IRAP excluded construction apprenticeships, despite the construction trades being directly affected by the skilled trades gap; one survey found 87% of builders believe cost and availability of labor is their top challenge.11Ashok Chaluvadi, “Top Challenges for Builders: Cost/Availability of Labor in 2019 & 2020,” Eye on Housing, February 7, 2020, https://eyeonhousing.org/2020/02/top-challenges-for-builders-cost-availability-of-labor-in-2019-2020/. Nevertheless, IRAP was effectively ended by President Biden in February 2021.12“US Department Of Labor Undertakes Several Actions to Strengthen Registered Apprenticeship Program, Eliminate Duplication,” U.S. Department of Labor, February 17, 2021, https://www.dol.gov/newsroom/releases/eta/eta20210217.
The debate over the benefits and drawbacks of occupational licensing has intensified in recent years. Although it may be in the public’s interest for the government to license certain professions, there is little evidence that many of these licenses increase quality of the goods, service provided, or public safety.1Patrick A. McLaughlin, Matthew D. Mitchell, and Anne Philpot, The Effects of Occupational Licensure on Competition, Consumers, and the Workforce (Mercatus Center at George Mason University, 2017), https://www.mercatus.org/system/files/mclaughlin_mitchell_and_philpot_-_mop_-_the_effects_of_occupational_licensure_comments_for_the_ftc_-_v1.pdf. Instead, occupational licensing has been shown to restrict the labor market, presenting a significant cost of entry to work.2Chiara Farronato. et al., “Consumer Protection in an Online World: An Analysis of Occupational Licensing (working paper no. 26601, National Bureau of Economic Research, 2020), https://www.nber.org/papers/w26601.
Experts of both the Obama3Department of the Treasury Office of Economic Policy, Council of Economic Advisers, and Department of Labor, Occupational Licensing: A Framework for Policymakers (White House, 2015), https://obamawhitehouse.archives.gov/sites/default/files/docs/licensing_report_final_nonembargo.pdf. and Trump administrations4Exec. Order No. 13966, 85 FR 81,777 (December 17, 2020), https://www.federalregister.gov/documents/2020/12/17/2020-27948/increasing-economic-and-geographic-mobility. have called on states to reform their occupational licensing regimes. Yet many states are creating new licenses almost every year. Today approximately 23%5U.S. Bureau of Labor Statistics, Labor Force Statistics from the Current Population Survey, Household Data, Annual Averages, 53. Certification and licensing status of the employed by occupation, 2020 annual averages, last modified January 22, 2021, https://www.bls.gov/cps/cpsaat53.htm. of the workforce must obtain an occupational license, compared with 5% in 1950.6Morris M. Kleiner and Alan B. Krueger, “The Prevalence and Effects of Occupational Licensing” British Journal of Industrial Relations 48, no. 4 (December 2010): 676–687, http://unionstats.gsu.edu/9220/Kleiner-Krueger_BJIR_Licensing.pdfhttp://unionstats.gsu.edu/9220/Kleiner-Krueger_BJIR_Licensing.pdf. These new licenses have a negative impact on upward economic mobility and increase overall income inequality. In other words, occupational licensing harms the ability of the lower-income earners among us to move up the economic ladder.
Licensing also restricts a licensee’s ability to move in search of better opportunities, as licenses and the requirements to obtain them are inconsistent from state to state. In states with growing economies like Georgia, Louisiana, and Texas, these regulations harm not only skilled workers, but the growing industries that wish to hire them.
Protecting the public from harm and fraud can often be achieved through means much less restrictive than licensing. Lawmakers should explore these options first and implement licenses only as a last resort. This chart shows the many less restrictive ways that governments and markets can regulate professions.
In light of the many negative effects of occupational licensing and the lack of data showing that it increases safety or quality, policymakers should proceed cautiously when proposing new occupational licenses or increasing regulations on already licensed professions. By understanding the limited role that occupational licenses should play, policymakers will champion young workers, empowering them to enter the economy.
At least 14 states (Arizona, Colorado, Florida, Georgia, Hawaii, Idaho, Maine, Minnesota, Nebraska, Ohio, Vermont, Virginia, Washington and West Virginia) maintain a sunrise or sunset process for some or all occupational licensure reviews.7Kaitlyn Bison, “Sunrise Review Processes by State,” The Council of State Governments, December 7, 2020, https://licensing.csg.org/sunrise-review-processes-by-state.
A sunrise review occurs at the beginning of the legislative process. It studies a newly proposed occupational license or a new regulation for an existing occupational license to ensure the least restrictive method of effective regulation is applied.
In 2015 the U.S. Supreme Court ruled that licensure boards are not wholly immune to federal antitrust laws.8North Carolina State Board of Dental Examiners v. FTC, 574 U.S. 494 (2015), https://www.supremecourt.gov/opinions/14pdf/13-534_19m2.pdf. In North Carolina State Board of Dental Examiners v. FTC, the court ruled that licensure boards controlled by market participants can only invoke state-action antitrust immunity if they are subject to active supervision by the state. In this case, they were not. The ruling led to many states adding some form of supervision of these licensing boards to bring them into compliance. Although the supervisor(s) can review and veto rules promulgated by a licensure board, they generally do not advise on pre-legislative enactment of newly proposed occupational licenses. The decision in North Carolina State Board of Dental Examiners v. FTC was a step in the right direction but there’s more work to be done to enact truly effective sunrise reviews.
In Louisiana, the Occupational Licensure Review Commission is limited to review only new proposed board rules, leaving the bulk of the state’s licensure infrastructure intact. As of October 2021, this commission has approved every rule proposal that has come to it for review.9“Occupational Licensing Review Commission Meeting Minutes,” Boards & Commissions, Division of Administration, State of Louisiana, accessed December 5, 2021, https://wwwcfprd.doa.louisiana.gov/boardsandcommissions/viewMeetingMinutes.cfm?board=658. On the other hand, Vermont’s sunrise review process begins with an independent office, the Office of Professional Regulation, reviewing proposed occupational licenses to advise the legislature on the best, least restrictive options before implementation in statute. Vermont has successfully used sunrise reviews to discourage attempts to create new licenses.10The 2010 and 2016 Sunrise Reports can be found online at https://legislature.vermont.gov/assets/LegislativeReports/MT-Sunrise-Report-OPR-2016-1-5.pdf and https://www.sec.state.vt.us/media/411936/massagetherapistsunriserpt-2010-1230.pdf.
It’s not enough to simply restrict new occupational licenses and regulations, states need to remove the barriers that currently exist and disproportionately affect poor and middle-income workers. In some cases, this may be accomplished by simply looking at a list of occupational regulations and targeting outliers. However, in other cases, it may require a more studious approach to assure legislators and the public that public health, safety, and welfare objectives are protected. In general, a systematic process of identifying and removing overburdensome occupational regulations should be done through some form of a sunset review.
Unlike the sunrise reviews that occur at the beginning of the process of creating a new regulation or occupational license, a sunset review looks at occupational licenses that already exist and/or the rules that occupational licensure boards enact. The intention here is simple: An occupational license or rule may be antiquated, ineffective, or unnecessary to serve a legitimate public purpose.
A sunset review identifies such licenses and/or occupational regulations and makes recommendations to the legislature to amend or repeal them. This ensures that future generations are not burdened with regulations that no longer make sense; likewise, it gives legislative bodies a chance to repeal regulations that only serve to protect special interests at the expense of workers. However, similar to sunrise reviews, existing state processes vary in quality and effectiveness.
How to implement
Eliminate unnecessary occupational licenses.
- States should limit licenses to cases where less restrictive options are insufficient.
- States should protect the public’s health and safety and prevent deceptive trade practices, but recognize that other options (such as authorizing a relevant government agency to perform inspections or mandating bonding and insurance) may be enough to accomplish this.
Regard licensing as the last resort
- State agencies or councils should perform a cost-benefit analysis on proposed occupational licenses to help the legislature determine if the license is warranted.
- Occupational licensing boards should be required to submit regular reports to state legislative or executive branch oversight panels explaining current regulations on licenses, comparing them to other states’ requirements, and performing a cost-benefit analysis on each license.
- In many cases, the voluntary or non-regulatory options such as voluntary third-party professional certification or voluntary bonding or insurance will protect public safety. Market competition and quality service self-disclosure of services and products may help ensure the quality of service the public desires.
- If all other options to protect public safety are exhausted, registration and/or state certification should be considered before creating a new occupational license.
Create an Occupational Regulatory Review Council with the authority to:
- Perform cost-benefit analysis on proposed occupational licenses, make recommendations on the necessity of the proposed license, and submit this information to the legislature, governor, and secretary of state (or other appropriate constitutional officers)
- Require existing occupational licensing boards to submit explanations of the current licenses overseen by their board and how their regulations compare to other states’
- Require existing occupational licensing boards to perform periodic cost–benefit analyses of the licenses their board oversees.
Texas & Florida.
In 2017, Texas had a highly successful effort to eliminate several occupational licenses. These included barber shampoo apprentices, cosmetology shampoo apprentices, bingo unit managers, booting companies, and more. There were additional successes in 2019 and 2021 which eliminated a number of licenses and identified others for further review. Collectively, this success set the stage for more unnecessary licenses being repealed.11Shannon Halbrook and Bruce Wright, “Occupational Licensing in Texas,” Fiscal Notes, Texas Comptroller of Public Accounts, last updated November 2019, https://comptroller.texas.gov/economy/fiscal-notes/2019/nov/licensing.php. In 2020, Florida passed a bill that eliminated licenses for boxing announcers, boxing timekeepers, interior designers, and alarm system installers.12Ilya Kukaev, Robert Thornton, and Edward Timmons, “The De-licensing of Occupations in the United States: An Update” (January 4, 2021), 7, https://www.aeaweb.org/conference/2021/preliminary/paper/6AGniDti.
State policymakers must enhance, preserve, and promote the dignity of work. They can do this by ensuring individuals have pathways to challenge unfair, arbitrary, and self-serving licensure decisions.
The process of occupational licensure can be very burdensome and directly impacts people’s ability to find work. At times these burdens may be difficult to justify as a genuine public interest. Traditionally, licensing boards, which are generally made of established practitioners, have been allowed to act with little to no oversight. They can increase fees, hours of training, and similar provisions under the guise of public health and welfare. However, many of these boards really serve their own self-interest by limiting competition. These boards often have the final say on who is allowed to participate in their industry.
Creating a legal independent appeals process would provide a mechanism for individuals who are denied a license to challenge board decisions or reasoning for existing licensing requirements. This can be paired with sunrise and sunset reviews to ensure no unnecessary standards are set. Finally, states should create clear criteria for what constitutes an arbitrary denial of a license.
How to implement
Pass legislation such as The Right to Earn a Living Act
- States should outline clear criteria to guide decision-makers on what constitutes denial of a license.
- States should provide a fair and impartial process to appeal denials.
- States should create a fair and impartial process to challenge occupational licensing regulations.
The Right to Earn a Living Legislation – Arizona & Tennessee.
A Right to Earn a Living law provides a route to challenge unfair regulations in court. It gives individuals the opportunity to sue the state if occupational regulations unfairly restrict their economic freedom.1Kukaev et al., “The De-licensing of Occupations.” They can be combined with reviews of existing regulation. Tennessee passed this legislation in 20162HB 2201, 2015-2016 Tennessee Legislature (2016), https://trackbill.com/bill/tennessee-house-bill-2201-professions-and-occupations-as-enacted-enacts-the-right-to-earn-a-living-act-amends-tca-title-4-title-7-title-38-title-62-title-63-and-title-67/1238736/ and Arizona did so the following year.3“Governor Ducey Signs Bill Guaranteeing Right To Earn A Living,” Office of the Arizona Governor, April 5, 2017, https://azgovernor.gov/governor/news/2017/04/governor-ducey-signs-bill-guaranteeing-right-earn-living.
The process of acquiring occupational licenses is often tedious and burdensome. However, once the prospective applicant becomes licensed, another burden arises. All 50 states (and D.C.) have a licensure regime. Although these systems are often similar, they are rarely identical. Due to this, it becomes difficult for people with licenses to move to another state without having to go through the cumbersome application process again. This antiquated system erodes a worker’s options and may persuade them to stay put instead of moving across state lines where their services are needed more. Similarly, it harms consumers by lowering the number of options available to them.
Universal licensure recognition is a potential solution to this problem. Once enacted, it allows anyone licensed within the U.S. for a particular trade or craft to work in another state without doubling up on requirements. This approach is superior to reciprocity, which requires multi-state coordination and would be far more limited in impact. Universal recognition doesn’t create an impetus for states to adopt the stringent regulatory practices of their neighbors. Likewise, if your state passes a universal recognition law and neighboring states do not, your state can more easily recruit skilled workers from other universal recognition states. The same wouldn’t be true for the neighbors that didn’t adopt the law.
Universal licensure typically doesn’t exempt people from all licensing regulations. It simply removes barriers to work by preventing erroneous duplications of requirements for testing and experience. In short, universal licensure forces boards to accept licenses from other states with similar requirements and creates better pathways to work for people wanting to relocate. In most states that have adopted such a law, the new resident would still have to apply for a license in their new state, but may be allowed to work while said application is being processed. These laws typically make exceptions for people facing disciplinary action in one state to ensure an unscrupulous actor can’t simply pick up and move. However, the more broadly defined the universal recognition law, the better. The goal is to increase worker freedom and remove barriers to opportunity.
Ideally, burdensome occupational license regulations should be eliminated. However, it’s not politically feasible to reverse and remove every occupational license, and in some cases, it may not even be desirable. Universal allows workers more freedom and control over their lives.
How to implement
Restrictions imposed on licenses issued out of state should be limited or nonexistent whenever possible.
- For a prospective licensed worker to use universal recognition provisions, they must typically meet certain specifications over time to continue to work in the state. These qualifications could include additional training requirements, substantially similar scope of practice, length of time the applicant has had their current license, no active disciplinary proceedings or complaints, paying all applicable fees, or taking state exams.
- This is generally meant to ensure the out-of-state licenses holders become compliant with state law in their current state while continuing to work. However, this can threaten the viability of the law by eroding its purpose and effect if over-used.
- Lawmakers should avoid a universal recognition law that is too restrictive, which undermines utilization and limits positive economic effect.
Eleven states, including Arizona, Colorado, Florida, Idaho, Missouri, Montana, New Jersey, Pennsylvania, South Dakota, Utah, and Wyoming, have implemented laws that require occupational boards to allow prospective workers with out-of-state licenses to obtain a valid occupational license to practice.