Occupational licensing is a hot topic across the country. However, few proposals address the underlying problem: one must secure the government’s approval to earn a living. One of the latest fads proclaiming to remedy this evil is universal recognition of occupational licensing – a policy where a state recognizes every other state’s licensees as eligible to receive a license to practice their occupation in that state.
Universal is not a common word in the vernacular of liberty. It is a term more often deployed by the progressive left to denote a nationalized industry or social program. For example, universal health care, universal preschool, and universal basic income, to name a few. To be fair, some things may be (or should be) universal – like natural rights. However, many other things cannot be universal without imposing a high cost on those naturally and rightfully universal things.
The 1889 Institute has been a leading voice against occupational licensing in Oklahoma and co-authored an alternative to occupational licensing, private certification, with the Goldwater Institute. Given 1889’s involvement and the fact that Oklahoma recently passed a version of the Universal Licensing Recognition Act, I was curious about a policy discussion hosted by the State Policy Network at its Annual Meeting entitled, “Racing to Recognition: How States Can Win with Universal Licensing.”
As the panel presented its opening statements, I found myself nodding along. They described how occupational licensing is a costly, often insurmountable barrier to gainful employment. They explained how it results in an underemployed labor market by preventing potential practitioners from putting their interests, skills, and experience to their highest and best use. As a result, consumers bear the increased cost of services, and potential practitioners are denied upward mobility.
Having set the stage well, vilifying occupational licensing, I was a bit perplexed by the subsequent discussion about universally recognition of occupational licenses. In a nutshell, universal recognition of licensing promotes interstate mobility among licensees. In other words, if you have secured one state’s permission to work and you move to another state, pursuant to a universal licensing recognition law, the new state will recognize the out-of-state license, education, examination, experience, and training as sufficient for granting a license to practice the same profession in the new state. The proposal was described as a pro-growth policy and as a solution to occupational licensing.
As a result of the discussion, I was left with a few pressing questions:
- How does universal recognition address any of the problems with occupational licensing as outlined by the panelists?
- How does universal recognition eliminate the barrier to entry?
- How does universal recognition improve upward mobility?
- How does universal recognition grow the labor market?
- Is universal recognition an avenue toward nationalized occupational licensing?
The short answers to these questions are that universal recognition does nothing to address the problems created by occupational licensing. Rather, it seems to entrench licensing schemes and open the door to national licensure.
As a holder of an occupational license that permits me to work in a state where I no longer live or work, I readily admit that I would benefit from universal recognition of my license. However, the fact remains, I am still a licensee. While I would gain geographic mobility, the barrier to economic mobility remains for aspiring practitioners. In fact, because the barrier to my licensed profession is so high, I grit my teeth and pay the annual fee to maintain an “inactive” license to avoid having to obtain anew the state’s blessing to work.
With universal recognition, nothing has been done to eliminate the barrier or increase the supply of practitioners. It merely shuffles practitioners around. There is no net gain or loss. It is a zero-sum game. As a practitioner, if I take my license to another state, my former state of residence loses a practitioner while my new state of residence gains one.
Who, then, are the beneficiaries of universally recognized licensing? Current licensees undoubtedly benefit from increased mobility. And, initially, states that have adopted universal recognition will benefit as they poach licensees from other states. However, as the dust settles on the initial frenzy to attract licensees from other states, we’ll find ourselves back to square one – facing the dilemma of people still needing the state’s permission to work.
Who, then, are the losers? In short, everyone else. With universal recognition, nothing notable has been done to increase the economic mobility of non-licensees, and nothing has been done to improve the overall supply of practitioners. We’ve merely achieved geographic mobility for those that have already paid to play and entrenched an anti-competitive, anti-free-market policy.
In the end, with universal recognition, the barriers remain, and, worse, universal recognition of licenses tends toward a nationalized licensing scheme. What we need as advocates of liberty is not more government but less. What we need is not nationalized licenses but their abolishment.
If we, as a movement, are serious about helping people achieve, climb, succeed, and thrive, occupational licensing must be repealed. Any perceived benefits of occupational licensing can be accomplished by several competitive, private, certificate-granting organizations.
The opinions expressed in this blog are those of the author, and do not necessarily reflect the official position of 1889 Institute.