by Jon Sanders
Director of the Center for Food, Power, and Life, Research Editor | John Locke Foundation
The case for significantly curtailing occupational licensing in North Carolina and elsewhere recently got a major boost from an unexpected source: the White House.
In July the Obama administration put forth a white paper entitled "Occupational Licensing: A Framework for Policymakers." The paper, a joint product of the Department of the Treasury Office of Economic Policy, the Council of Economic Advisers, and the Department of Labor, urged:
In order for the economy to successfully continue to innovate and grow, we must ensure that we are able to take full advantage of all of America’s talented labor. By one estimate, licensing restrictions cost millions of jobs nationwide and raise consumer expenses by over one hundred billion dollars. The stakes involved are high, and to help our economy grow to its full potential we need to create a 21st century regulatory system — one that protects public health and welfare while promoting economic growth, innovation, competition, and job creation.
The report examined several aspects of licensing, including:
Within groups of States, harmonizing regulatory requirements as much as possible, and where appropriate entering into inter-State compacts that recognize licenses from other States to increase the mobility of skilled workers.
Allowing practitioners to offer services to the full extent of their current competency, to ensure that all qualified workers are able to offer services.
Those issues should sound familiar to readers of the John Locke Foundation’s work. Our First in Freedom Index gauging the climate for freedom in each of the 50 states found, for example, that North Carolina’s aggressive occupational licensing regime was a significant impediment to regulatory freedom.
Even as research shows strong results for entrepreneurship as a ladder out of poverty,* North Carolina is the 13th most restrictive state in licensing low-income occupations.
For those reasons and others, I recently produced a research paper arguing in favor of North Carolina moving away from occupational licensing and toward voluntary certification. As that paper concluded:
Recommendation: Replace most occupational licensing with voluntary private certification
North Carolina’s aggressive occupational licensing faces considerable concerns about its fairness, efficiency, scope, and more.
A ready answer to these concerns would be to transition most jobs currently under state regulation away from licensure and into voluntary private certification.
This move would inject a great amount of freedom and choice into the market for service professionals and into the labor market as well. It would pay dividends in terms of job creation and help lift low-income individuals and neighborhoods.
It would be another strong signal that North Carolina welcomes business and supports her entrepreneurial risk-takers, big or small.
The governing impulse should be here, as elsewhere, toward freedom rather than regulation. Research bears out the better results.
*Note: Entrepreneurship is therefore a damned sight more effective fighter of poverty than, for example, sinecure academic centers that actively avoid sound economics and whose practical existence is highly limited to such inefficacious quasi-exertions as puffing up resumes and promoting harmful policies that originated with racist progressive eugenicists.
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