America is supposed to be a place where people can pursue opportunity wherever they can find it. But that’s not the reality for millions of bus drivers, hairdressers, real estate agents and other workers subject to state or local licensing. Often, merely moving across a state line requires them to spend countless hours, pay hefty fees and lose months of income to re-establish their credentials.
Finally, one state — Arizona — is taking a step toward removing the barriers. It’s an example that others should follow.
Arizona’s Republican Gov. Doug Ducey recently signed legislation that means the state will recognize out-of-state occupational licenses — assuming their holders have been credentialed for at least a year, have no disqualifying criminal history and don’t require security clearance. It’s a reform he argues will boost the state’s economy and benefit consumers without creating undue risks.
He has an excellent case. Trade groups insist that state licensing is necessary to ensure public safety. More often, the rules serve primarily to insulate incumbents from competition. Consider barbers: Licensing boards commonly demand as much as 1,500 hours of training, about 10 times what they require for emergency medical personnel. There’s scant justification for that in the first place, let alone for making people repeat it when they move to a different state.
Onerous state licensing harms everyone by impairing mobility and economic dynamism. In a recent paper, University of Minnesota researchers Janna Johnson and Morris Kleiner find that people in occupations with state-specific licensing requirements move across state borders 36% less frequently than their unburdened counterparts. The difficulty of relocating, in turn, causes them to forgo hundreds of millions of dollars in potential earnings every year. It’s a burden that the federal government has long been seeking to alleviate.
Some may worry that if more states follow Arizona’s lead, occupational requirements will fall as people looking to start their careers gravitate toward places with the most accommodating standards. In cases where public safety truly is at stake, higher local standards could be justified, or national licensing might be appropriate. Beyond that, bring it on — which is precisely the spirit of another bill on Ducey’s desk, one that would allow people to wash, dry and style hair without a cosmetology license. Who needs protection from a bad haircut?
FROM AN EDITORIAL ON BLOOMBERG OPINION