Occupational licensing reduces labor supply

By Aaron Rice
May 15, 2019

Unnecessary and burdensome regulations make it harder for Mississippians to earn a living.

According to a new report from Pete Blair with Harvard University and Bobby Chung with Clemson University, occupational licensing reduces labor supply by an average of 17-27 percent. An earlier report from the Institute for Justice found that Mississippi has lost 13,000 jobs because of licensing requirements. 

While licensing was once limited to areas that most believe deserve licensing, such as medical professionals, lawyers, and teachers, this practice has greatly expanded over the past five decades. 

Today, approximately 19 percent of Mississippians need a license to work. This includes everything from a shampooer, who must receive 1,500 clock hours of education, to a fire alarm installer, who must pay over $1,000 in fees. All totaled, there are 66 low-to-middle income occupations that are licensed in Mississippi.

The new report also looks at the varying requirements for occupational licensure, including prohibitions on those with criminal convictions, whether the conviction had anything to do with the occupation or not.

This year, the legislature passed a new law that prohibits occupational licensing boards from using bureaucratic rules to prevent ex-offenders from working. The law requires occupational licensing boards to eliminate blanket bans and “good character” clauses used to block qualified and rehabilitated individuals from working in their chosen profession. 

Under the Fresh Start Act, licensing boards must adopt a “clear and convincing standard of proof” in determining whether a criminal conviction is cause to deny a license. This includes the nature and seriousness of the crime, the passage of time since the conviction, the relationship of the crime to the responsibilities of the position, and evidence of rehabilitation. The law also creates a preapproval process that allows ex-offenders to determine if they may obtain a particular license before undertaking the time and expense of training, education and testing. In addition, the law protects licensed individuals who fall behind on their student loans from losing their occupational license. 

All too often, occupational licenses only serve to protect certain industries, rather than protecting public health or wellbeing. We should continue to look for ways to help people find gainful employment rather than implementing unnecessary roadblocks. Working provides purpose and the opportunity for families to flourish. We should do everything possible to encourage it.


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