NCPA - National Center for Policy Analysis

Deregulating Occupations

June 8, 2012

In May 2012, the Institute for Justice released a study that focuses on licensing requirements for 102 occupations, measuring the burdens these requirements impose on aspiring workers.  The study emphasizes the enormous cost of this regulation, and also points out that many of these licensed occupations have no such need for the restrictions, says Thomas A. Hemphill, an associate professor at the University of Michigan-Flint's School of Management.

Nevertheless, the licensure and regulation of occupations nationwide remains common; even those jobs that have no harm potential are subject to thorough oversight by federal and state governments.

  • The study found that most of the 102 occupations are practiced somewhere without government permission and apparently without widespread harm.
  • Only 15 are licensed in 40 states or more, and on average, the 102 occupations are licensed in just 22 states.
  • Emergency medical technologists (EMTs), who hold lives in their hands, average just 33 days of training and two examinations, while cosmetologists require, on average, 372 days of training before full licensure.
  • Of the 102 occupations studied, the most difficult to enter is interior designer, a "harmless" occupation licensed in only three states and Washington, D.C.

A 2007 Reason Foundation study by Adam B. Summers found that the economic impact of these requirements is substantial.  Summers reported that more than 1,000 occupations are regulated at the state level, and estimated the total cost of licensing regulations in the United States to be between $34.8 billion and $41.7 billion annually.

Surprisingly, the vanguard for addressing this problem can be found in Michigan, which Summers found to be the sixth most heavily occupationally regulated state in the nation.

  • Shortly after taking office in 2011, Michigan Governor Rick Snyder established the Office of Regulatory Reinvention (ORR) to investigate the state's regulatory environment.
  • Last month, ORR issued a report to Governor Snyder that contained 63 recommendations for improving the state's occupational licensing regulations.
  • These included the complete deregulation of 18 occupations, representing 17.3 percent of occupations regulated by state government.
  • The ORR also recommended the elimination of five additional licensing provisions, as well as the elimination of nine occupational boards and further exploration of eliminating 11 more boards.

Source: Thomas A. Hemphill, "Deregulating Occupations: Is Michigan Leading the Way?" The American, May 30, 2012.

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