North Carolina Lawmakers Ditch Occupational Licensing Reform

Published May 13, 2016

After hearing testimony from industry lobbyists, North Carolina lawmakers on the state’s Joint Legislative Administrative Procedure Oversight Committee decided to abandon proposed legislation that would have reformed the state’s occupational licensing rules for acupuncturists and athletic trainers.

Alex Tabarrok, an economics professor at George Mason University and a researcher at the Mercatus Center, says governments are making it increasingly difficult to enter many professions.

“Speaking generally about occupational licensing, I think it’s been increasing in the United States,” Tabarrok said. “About 30 percent of occupations now require some kind of license, which is way up. To get into the industry, you have to pay a price. That makes it more difficult to get into the industry. It raises prices and creates a monopoly of power.”

‘Very Little to Do’ with Training

Tabarrok says occupational licensing is often more about increasing the cost of entering the job market and less about actually training people.

“Often what you have to do has very little to do with the actual skills of the job,” Tabarrok said. “So, for example, there’s some famous cases of people who braid hair. You have to get a license for cosmetology, and it requires an amount of education; it requires they have training in manipulating chemicals, even though that is not at all what they are doing.”

Little ‘Net Benefit’ in Safety

Jon Sanders, director of regulatory studies at the John Locke Foundation, says there is little empirical correlation between occupational licensing and public safety.

“I think one thing that people don’t consider when they confront the issue is the aspect of safety and quality,” Sanders said. “It doesn’t come through in the research that licensing actually produces a measurable net benefit in terms of safety and quality.”

Discouraging Career Exploration

Sanders says occupational licensing rules often prevent people from changing careers or exploring other occupations.

“Research seems to suggest it is a pretty significant hurdle for people who are switching professions,” Sanders said. “This would affect, for example, women who have decided to get back into the labor market or older workers who have been fired and decide, ‘Well, I’m kind of being forced to look for another job, so maybe I’ll go in this direction,’ or, ‘I’ve always wanted to do this.'”

Sanders says North Carolina’s occupational licensing laws may be stifling the state’s economic growth.

“It could definitely [have an effect on] people moving to the state,” Sanders said. “We have a strong in-migration in the state compared with many other states in the nation. Depending on the portability of licenses, it could have a significant effect.”

Andrea Dillon ([email protected]) writes from Holly Springs, North Carolina.

Internet Info:

Alex Maurizi, “Occupational Licensing and the Public Interest,” Journal of Political Economy, March 1, 1974: