by Jon Sanders
Director of the Center for Food, Power, and Life, Research Editor | John Locke Foundation
Carolina Journal’s Lindsay Marchello writes about a new study from the Institute for Justice that estimates, among other things, how much occupational licensing is costing North Carolina in terms of jobs and lost economic activity:
Occupational licensing may have cost North Carolina more than 42,000 jobs and millions in economic losses … the percentage of licensed workers in North Carolina is 18.9 percent. North Carolina has the 27th highest percentage of licensed workers, with 753,751 licensed and employed in the state.
The study estimated $112 million as a conservative measure of lost economic value in North Carolina due to occupational licensing. A more broader estimate puts the lost economic value around $4 billion.
North Carolina is caught in a public-choice trap with its occupational licensing system. Licensing reform is an issue that unites conservatives and liberals, the political Right, Left, and Center, but deep-pocket lobbies have so far been able to suppress attempts to restore people’s fundamental civil right to earn a living as recognized in the State Constitution.
Since 2015, many other states have made sweeping, systematic reforms of their occupational licensing regimes. So far, all North Carolina lawmakers have managed to do is slow the growth of our rampaging system. It’s a good first step, but not getting worse is still a far cry from getting better — especially since we are competing with the reforming states.
To underscore again how occupational licensing causes deadweight loss and harms the economy and consumers, a new study this month in the National Bureau of Economic Research finds that “licensing reduces equilibrium labor supply by an average of 17%-27%.”
That finding, in brief, means licensing:
All of which are consistent with past research on occupational licensing.