Occupational licensing is done almost exclusively at the state level, but there is ample scope for the federal government to push for reform. See, for example, the bill recently introduced by Elizabeth Warren and Marco Rubio to prevent states from revoking licenses of people who have unpaid federal student loans.
Reform can be helped along by the federal government through grants for states that commission studies to analyze the effects of occupational licensing. Nevada is the most recent state to receive a $500,000 grant from the Department of Labor for such a review.
“These investments support selected states’ analysis of relevant licensing criteria, potential portability issues, and whether licensing requirements are overly broad or burdensome. Importantly, awardees will develop specific plans of action designed to reduce excessive licensing and consider the potential of alternative approaches to licensing that maintain the protection of public health and safety, such as professional certification.”
Of course, it’s still up to the state legislature to act on the findings of this study, but sunlight is the best disinfectant. Research shows occupational licensing increases the wages of incumbent practitioners while decreasing wages in unlicensed professions and reduces employment opportunities, with questionable benefits to consumers. If lawmakers in Carson City can at least identify the problem, they’ll be better equipped to consider the alternatives to licensure. There are no guarantees for reform, but bringing hard data to the debate is a start.
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