Research & Commentary: Pennsylvania’s Occupational Licensing Reforms Would Lower Barriers for Ex-Offenders, More Reforms Needed

Published November 26, 2019

As several states address criminal justice reform and recidivism, Pennsylvania lawmakers are considering a policy change to the Commonwealth’s occupational licensing laws, which currently forbid ex-offenders from attaining certain licenses.

An estimated one in three American adults have a criminal record. In Pennsylvania, approximately 4 to 5 percent of adult residents had a felony conviction as of 2010. Access to steady employment is necessary in reducing recidivism, but Pennsylvania, like many states, has made it exceedingly difficult for ex-felons to reenter the workforce.

One in five professions in Pennsylvania requires an occupational license. In the Commonwealth, “29 professional boards and commissions regulate 255 licensure types,” amounting to more than one million licensees. Of these, “13 of 29 boards have provisions … that impose a mandatory 10-year licensure ban for persons who have been convicted of a felony under Pennsylvania’s Controlled Substance, Drug, Device and Cosmetic Act.”

SB 637, a bipartisan bill introduced by Senators John DiSanto (R-Dauphin) and Judy Schwank (D-Berks), would reform Pennsylvania’s occupational laws by barring boards and commissions from automatically denying licenses to persons with a criminal record. The legislation would also require boards and commissions to adopt universal standards that are consistent and would bar the use of “moral character to make determinations of whether to grant or renew, deny, suspend, revoke or otherwise discipline a license, certificate, registration or permit.” Further, ex-offenders will only have licenses withheld if their criminal “convictions are directly related to said occupation after individualized reviews.”

“On average, each state has 56 occupational licensing and 43 business licensing laws that ban applications from felony convictions,” according to the Alliance for a Just Society. A 2018 report commissioned by Gov. Tom Wolf found “Pennsylvania is an outlier in applying an automatic criminal history licensure ban.”

Like Pennsylvania, many states are enacting reforms to their occupational licensing programs. Delaware and Indiana recently reduced conviction barriers in their occupational licensing laws. Michigan lawmakers are considering legislation that would “block licensing agencies from denying a license for past criminal offense, so long as it is not directly related to the field of work a license applicant is attempting to enter.”

Blanket bans on the issuance of licenses due to criminal convictions unnecessarily single out ex-offenders and make it more difficult for these persons to find work, leading to increased rates of recidivism. In fact, there is a direct correlation between occupational licensing burdens and recidivism. A 2016 Policy Report from the Center for the Study of Economic Liberty at Arizona State University, found that “between 1997 and 2007 the states with the highest occupational licensing burdens saw an average increase in the three-year, new-crime recidivism rate of over 9%.” States with the lowest regulatory burdens “saw an average decline … of nearly 2.5%.”

Gainful employment is key in reducing recidivism. The Manhattan Institute notes ex-offenders who quickly found employment upon their release were 20 percent less likely to return to prison. Indeed, a “5-year follow-up study of released offenders” in Indiana found “post-release employment was an effective buffer for reducing recidivism among ex-offenders.” 

Although reducing barriers for ex-offenders is a good start, lawmakers in Pennsylvania should further reform onerous occupational licensing laws. The Institute for Justice notes that while “Pennsylvania’s licensing laws for lower-income occupations are some of the least burdensome in the nation,” the Commonwealth “frequently licenses occupations that are unlicensed by other states,” including auctioneers, taxidermists, and upholsterers.

Further, the regulations imposed on certain occupations are unnecessarily burdensome given the risks they present to the public. This is most notable when examining the educational requirements for barbers and cosmetologists, compared to emergency medical professionals.

In Pennsylvania, individuals seeking barber and cosmetology licenses must undergo a “training period of at least one thousand two hundred fifty (1250) hours and not less than nine months” under instruction of a licensed barber and/or cosmetologist. Emergency medical personnel require significantly less training hours. Emergency medical responders must complete 48 to 52 hours of education; emergency medical technicians (EMT) must complete 150 to 200 hours; and advanced EMTs must complete 150 to 250 hours of training. Paramedics are required to have at least 1,000 to 1,200 hours of education, or 50 hours less than what is required of a barber and/or cosmetologist.

Although reforming the Keystone State’s licensure burdens for ex-offenders is laudable, policymakers in Pennsylvania should completely overhaul the state’s onerous occupational licensing laws. While current legislation will help reduce recidivism among ex-offenders and help provide more opportunities for employment, Pennsylvania still imposes licenses on many occupations that other states do not. Reducing such burdens will provide more opportunities, create more jobs, and strengthen the Commonwealth’s economy.

The following documents provide more information on occupational licensing.

At What Cost? State and National Estimates of the Economic Costs of Occupational Licensing
This study from the Institute for Justice examines the effects of occupational licensing on state economies and finds that these laws create large costs for consumers and the wider economy in terms of losses in jobs, losses in output, and misallocated resources.

The Effects of Occupational Licensure on Competition, Consumers, and the Workforce
This paper by the Mercatus Center at George Mason University examines the costs and benefits of occupational licensing regulations on consumers, the economy, and the workforce, and it also recommends areas in need of reform.

Restoring the Right to Earn a Living: A Common-Sense Solution to Occupational Licensing Job Barriers
In this paper, Goldwater Institute Director of National Litigation Jon Riches examines the burdens inflicted by onerous job licensing requirements in Louisiana. “For too many professions, occupational licensing requirements do not exist to protect public health and safety—rather, they exist to protect incumbent industries or special interests,” Riches wrote. “The percentage of jobs requiring a license has exploded over the last 60 years, and in a state like Louisiana, which has slow job growth and low wages, thousands of job-seekers are being unnecessarily blocked from meaningful work.”

Bottleneckers Beware: Occupational Licensing Reform Bills Filed Across the Nation
Matt Powers of the Institute for Justice examines the growing trend in states to reduce burdensome occupational licensing laws, which impede dozens of industries nationwide.

Right to Earn a Living Act
The Goldwater Institute argues the burdens of occupational licensing in many states are excessive and should not be placed on those who want to earn an honest living. Instead, governments should bear the burden of justifying the restrictions. The authors argue states should enact a Right to Earn a Living Act to protect freedom of enterprise. By doing so, they will ensure that economic opportunity is not merely a promise but a reality.

Occupational Licensing: Ranking the States and Exploring Alternatives
Adam Summers of the Reason Foundation addresses the impact of occupational licensing on the labor market. Service quality and health and safety “may actually be diminished by occupational licensing,” he finds. Through high prices, reduced competition, and arbitrary requirements, the government thus hurts the average consumer and worker. Licensing is for special interests, not public interests, he writes. These laws hurt the poor and minorities disproportionately, he notes, proving the government is not helping those they say they are.

The Prevalence and Effects of Occupational Licensing
Morris Kleiner and Alan Krueger note research shows nearly 30 percent of the U.S. workforce is required to obtain a license to work. The authors find licensing costs consumers more and reduces their ability to choose services for themselves.

License to Work: A National Study of Burdens from Occupational Licensing
The Institute for Justice conducted a national study to measure how burdensome occupational licensing laws are for low-income workers. The authors found “the barriers imposed by licensure schemes on those wishing to enter the 102 lower-income occupations we studied are not only widespread but often severe, arbitrary and irrational.” The authors conclude, “As millions of Americans struggle to find productive work, one of the quickest ways legislators can help is to simply get out of the way: Reduce or remove burdensome regulations that force job-seekers and would-be entrepreneurs to spend precious time and money earning a license instead of working.”

Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit Health Care News, The Heartland Institute’s website, and PolicyBot, Heartland’s free online research database.

The Heartland Institute can send an expert to your state to testify or brief your caucus, host an event in your state, or send you further information on a topic. Please don’t hesitate to contact us if we can be of assistance! If you have any questions or comments, contact the government relations team at [email protected] or 312/377-4000.