Rivera Schatz pushes for reform to eliminate occupational licenses and facilitate labor mobility in Puerto Rico.
Photo: InDiario
In an effort to eliminate the bureaucracy that hinders access to the labor market and slows economic development, Senate President Thomas Rivera Schatz introduced a legislative package to reform Puerto Rico's occupational licensing system.
These initiatives, one of which was co-authored by NPP Senator Migdalia Padilla Alvelo and Proyecto Dignidad Senator Joan Rodríguez Veve, seek to streamline licensing processes, eliminate obsolete regulations and facilitate labor mobility on the island.
Senate Bill 6, introduced by Rivera Schatz, Padilla Alvelo, and Rodriguez Veve, proposes the “Universal Recognition of Occupational Licenses and Professional Licenses Act in Puerto Rico”, which would allow professional and occupational licenses issued in the 50 U.S. states to be automatically recognized in Puerto Rico, without the need to repeat examinations or additional procedures.
The measure justifies that “licensing laws not only create barriers to innovation, market competition, among others, but also deter people from moving from one state to another for fear of having to go through the entire process again to obtain a new occupational license.”
With this reform, legislators seek to encourage the return of Puerto Rican professionals who have emigrated and attract essential workers, particularly in sectors such as health care, where the island faces a crisis of doctors and specialists.
For his part, Rivera Schatz independently introduced Senate Bill 274, a measure that seeks to modernize the relationship between the Boards of Examiners and the State Department. The proposal establishes a uniform procedure for occupational licensing, imposing a maximum term of 30 days for the Boards of Examiners to evaluate and resolve applications. If a determination is not issued within that period, a provisional license will be automatically approved.
According to the bill, “the evaluation processes to grant or renew licenses in Puerto Rico are inconsistent, burdensome and bureaucratic, seriously affecting our economic development, the opportunity to do business and the competitiveness of the Island”.
The reform seeks to eliminate these delays and facilitate the integration of professionals into the labor force.
In an even more ambitious proposal, Rivera Schatz filed Senate Bill 275, titled “Puerto Rico Occupational Licensing Reform Act,” which would eliminate several occupational licenses that are not currently required in other states and that, according to the legislator, represent an unnecessary burden for job seekers.
Among the licenses that would be eliminated are those for public relations, actors, electronics technicians, draftsmen, interior designers, barbers and beauty specialists.
The measure recognizes that “Puerto Rico has at least fifteen (15) occupational licenses that are not required in any other state or that are only required in less than five (5) states,” which limits competition and makes labor activity more expensive.
In addition, it transfers the regulation of certain occupational certifications to the Department of Natural and Environmental Resources (DNER) and the Department of Health, in order to centralize and simplify these processes.
The problem has been known about for some time
In September 2022, a study on occupational licensing in Puerto Rico was published by the University of Puerto Rico (UPR). Its findings are in line with the legislative proposals being drafted by the Senate.
The report revealed that Puerto Rico regulates 129 occupations with mandatory licenses, of which 53 do not require licenses in more than half of the jurisdictions in the United States. It also identified that 28 of these licenses only exist in Puerto Rico or in fewer than four states, suggesting excessive regulation that limits labor mobility and access to employment.
It also found that requirements on the island, such as education, experience, license fees, and renewals, are stricter than in most states.
To assess the need for these regulations, the study contrasted Puerto Rico's licenses with those of 23 states that have implemented reforms to reduce occupational barriers. It also included an analysis of states with high Puerto Rican populations, such as Florida, New York and Texas, to measure the impact of local regulation on worker mobility.
The study commissioned to Dr. Alex J. Ruiz Torres, together with Drs. Elsa B. Nieves Rodríguez, Karen Agosto Valentín and the collaboration of a team of research assistants, was developed as part of an agreement between the UPR and the Puerto Rico State Department, in coordination with the Fiscal Oversight Board, within its Ease of Doing Business initiative. It concludes that overregulation in Puerto Rico not only affects economic growth and makes professional services more expensive, but also discourages investment and makes it difficult for citizens to find jobs.
The proposed reforms have also been supported by the Institute for Economic Freedom for more than a year. A February 2023 study highlights the negative impact of over-regulation in Puerto Rico and offers practical solutions to address this problem.
According to the analysis, “licensing in Puerto Rico is broader in scope compared to licensing in the continental United States,” which has limited job creation and labor mobility, as well as increased costs for consumers.
The research concludes that in “states where licensing requirements have been reduced, labor participation has increased and costs to consumers have decreased.”
This article was originally published in Spanish by InDiario.
