John Locke Update / Research Brief

How N.C. Makes It Harder for People with Conviction Records to Work

posted on in Law & Regulation, Rights & Regulation
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A new report from the National Employment Law Project looks at how state occupational licensing laws make it difficult for people with arrest and conviction records to find work in their chosen field. It is especially hard, the report found, for people with records who want to work in North Carolina.

Why should that be so? This is, after all, a state supposedly bound by its own Constitution to respect everyone’s self-evident, inalienable right to “the enjoyment of the fruits of their own labor.”

First limit licensing, then limit disqualifications to relevant convictions

Before delving into the report, “Fair Chance Licensing Reform: Opening Pathways for People with Records to Join Licensed Professions,” let me make two general points about occupational licensing laws and conviction records.

The first point is this: occupational licensing is the most extreme form of state regulation of an occupation. It should be reserved for only the most extreme cases where safety issues are paramount.

As I’ve frequently discussed, most recently in my Spotlight report “Modernizing North Carolina’s Outdated Occupational Licensing Practices,” North Carolina should subject its workers only to the least restrictive regulation necessary to address legitimate safety concern and go no further:

  1. Principles that, first and foremost, protect competition and the constitutional right to work
  2. Narrowly tailored regulations to address a legitimate concern
  3. The least restrictive regulations necessary to address that concern
  4. An array of policy alternatives to licensing, depending upon the kind of concern

Placing state entry regulations on some people’s chosen fields of labor should be a regulation of last resort, reserved only for the most extreme regulatory concerns.

Beyond that, North Carolina should carefully construct policies regarding disqualification of individuals from occupational licensing. Convictions that would justify license denials should be relevant to the job and clearly stipulated.

Over six hundred different disqualifications?

The report compiles numerous statistics for each state and puts them in the greater context of what it describes as “two colliding trends.” Those would be the rapid expansion of occupational licensing over the past few decades and the growing number of people with arrest and conviction records following decades of “tough on crime” policies and mass incarceration.

Conviction records make it harder to find work in general because most employers require background checks. Most people released from incarceration never return, which means they are in fact rehabilitated to society.

Since an occupational license is an entry barrier to entering a field of work, its effect is worse than a potential employer deciding not to take a chance. It takes that choice away from all potential employers in the field and doesn’t even leave the would-be worker the option of self-employment.

Here are the report’s data for North Carolina:

  • Over one million people (15 percent of the adult population) with arrest or conviction records
  • 22 percent of the workforce employed in fields where they are required to have an occupational license
  • Over 16,000 people released from prison in 2015, an amount nearly 70 percent higher than in 2000
  • 641 separate disqualifications in state occupational licensing laws for having a conviction record (North Carolina has the 11th most disqualifications in the country; second in the Southeast)

Those figures attest to several things: There is a significant and growing number of people in North Carolina who want to work but who have conviction records. A great many jobs out there — more than one-fifth — require an occupational license. But the state has a surprisingly large number of legal stops keeping a license from someone with a conviction record.

Number of disqualifications in state occupational licensing laws preventing someone with a criminal record from getting a license (Southeastern states)

Data source: National Employment Law Project

In 2013 the General Assembly passed Senate Bill 33, which addressed this issue somewhat. Nevertheless, it gave broad deference to licensing boards’ discretion.

The law stipulated that a licensing board “shall not automatically deny licensure on the basis of an applicant’s criminal history,” which was a step in the right direction. It still allowed denial merely if the board “finds that denial is warranted after consideration of” several factors, including many details of the crime and the “nexus between the criminal conduct and the prospective duties of the applicant as a licensee.”

Those factors are certainly worth considering, but the law doesn’t give a strong, predictable standard for when those factors or “nexus” is sufficiently prohibitive against granting the license.

It’s an issue worth addressing in future legislation. It was bad enough that North Carolina ranked as the 17th most onerous state for licensing low-income jobs, according to the Institute for Justice’s updated “License to Work” study. It’s distressing that North Carolina ranked poorly in this study, too.

But for a state that constitutionally guarantees protecting individuals’ “enjoyment of the fruits of their own labor”? We should be erring on the side of labor freedom, not piling on restrictions.

Jon Sanders is an economist studying state regulations, that spreading kudzu of invasive government and unintended consequences. As director of regulatory studies and research editor at the John Locke Foundation, Jon gets in the weeds of all kinds of policy… ...

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