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Licensing reform would help Mississippians

Latino
Latino

Listen to any politician for any length of time and the subject will turn to jobs. These days, state governments spend billions of taxpayer dollars trying to “create” them.

There’s a better way — a path that would not cost taxpayers a dime. In fact, regulatory reforms are available that would save the state and its citizens considerable money while making it easier for people to find jobs.

It used to be that only a limited number of professions, like law and medicine, required practitioners to obtain an “occupational license” — a government-mandated permission slip to work.

Not anymore. Since the 1950s, the number of workers with jobs requiring a state license has quintupled. In Mississippi, more than 20 percent of workers now must be licensed by the state to work — from barbers and bus drivers to manicurists and massage therapists. A 2012 study found that only four states license more occupations than Mississippi.

Licensing is often a heavy burden. Almost all licenses require a fee and many require months or years of training. For instance, Mississippi is one of 10 states that license landscape contractors, requiring more than two years of training and experience to obtain a license.

When a state creates an occupational license, it is often at the request of people who are already established in a profession. Boards, frequently made up of these same established professionals, are vested with the power of the state to determine the requirements for licensure and rules for professions.

The danger is that these boards can become a tool to deter would-be workers, effectively protecting existing professionals from competition. In that sense, licenses are not so different from labor unions with one notable exception — many more people labor under state licensing than under labor unions.

Mississippi is a right-to-work state, meaning that employees can’t be forced to join a union or pay union dues as a condition of employment. In the same spirit, the state should limit barriers to work created by occupational licensure. The state should specifically ensure that any licensing requirement is tied to a substantive public purpose.

Licensing reform could have a meaningful impact in Mississippi’s most disadvantaged communities and populations. Overly broad licensing regulations place the greatest burden on low-income workers, who are less likely to have the time and money needed to attend trade schools and pay licensing fees. As a result, these citizens are often shut out of the higher earnings of licensed professionals, or worse, of work altogether.

Workers aren’t the only ones hurt by this system. Because occupational licensing restricts competition and creates monopolies, all of us end up paying higher prices for goods and services. According to one estimate, occupational licensing costs consumers a staggering $203 billion per year and has prevented some 3 million jobs from being created.

Some of this cost might be justified to ensure that doctors, dentists and airline pilots have the necessary training to perform their jobs well. It is less clear why Mississippi licenses auctioneers, landscapers and many other professions who would best be regulated by existing market forces.

There also is a legal reason for the state to take strides toward occupational licensure reform.

In 2015, the U.S. Supreme Court ruled that an occupational licensure board in North Carolina did not have state immunity in response to a federal antitrust lawsuit. The case stemmed from the North Carolina Board of Dental Examiners establishing an anti-competition rule that prevented teeth whitening from being performed by non-dentists. More litigation against state occupational boards has followed.

It shouldn’t take a lawsuit to make policymakers want to create an environment conducive to job creation. With rare exceptions, people shouldn’t need permission from bureaucrats or would-be competitors to earn a living. We should free more Mississippians to pursue their own American dream.

Russ Latino is Mississippi director of Americans for Prosperity and an AV-rated attorney.

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