Like employers in most states in the U.S., North Carolina businesses are facing several significant challenges in the labor market. Some of those challenges are particularly acute in North Carolina. As of Dec. 2024, labor force participation in North Carolina (59.9 percent) is 2.6 percentage points lower than the national average (62.5 percent). The U.S. Chamber of Commerce ranks North Carolina’s worker shortage as “more severe” nationally — there are only 55 workers for every 100 open jobs in the state.

Why should ordinary North Carolina residents be concerned about these labor market issues? A lack of workers prevents businesses from expanding, which could limit job opportunities and advancements for existing workers. Further, a lack of workers limits the ability of businesses to expand production and innovate, potentially limiting consumer choice.

Although there are many factors contributing to existing challenges in the North Carolina labor market, excessive regulation is without a doubt a contributing factor. One of the most stringent and pervasive labor market regulations is occupational licensing. Occupational licensing is not as well known as other prominent labor market policies and institutions, such as unionization and the minimum wage. Yet excessive occupational licensing is just as harmful and costly as those, and it directly affects many more workers. Thankfully, simple reforms that have been enacted in several other states can reduce the costs associated with licensing laws, freeing the North Carolina economy and making it easier for residents to find work. The reforms we discuss include:

  • Right to Earn a Living Act
  • Licensing review commission
  • Licensing budget
  • Universal recognition
  • State-to-state comparisons

In this paper, we discuss occupational licensing in the U.S. with a special focus on its extent and effects in North Carolina. We highlight six specific cases where North Carolina is uniquely stringent and offer several recommendations for reform that will not harm North Carolina citizens but will instead eliminate unnecessary barriers to work that are holding back the Tar Heel State. The six specific cases are:

  • Irrigation contractor
  • Soil scientist
  • Locksmith and apprentice locksmith
  • Auctioneer and apprentice auctioneer
  • Optician and optician apprentice
  • Sign language interpreter