With up to one-quarter of the U.S. workforce now needing a license to work in their occupation—up from about 5% several decades ago—state policymakers have taken an active role in developing sensible and effective regulatory policies that strike the right balance needed to protect consumers and promote economic growth and employment opportunity.
As described in Section V of this report, state policymakers have taken the following actions to develop a smarter occupational licensing framework.
Assess, gather and utilize workforce and economic data to inform policymaking. Policymakers have established legislative subcommittees or working groups to review requirements, engage licensing boards and recommend legislative policies.
Define a blueprint to guide policy decisions. Several states have convened diverse and bipartisan groups of stakeholders to review data and set a course for occupational licensing reform.
Enact broad licensing reforms. In recent years, some states have considered or enacted comprehensive changes to the state’s overall occupational regulatory approach, such as through a policy shift towards certification over licensing (Indiana) or through legislation—such as “Right to Earn a Living Acts” implemented in Arizona and Tennessee—that limits entry requirements to those that are necessary to protect the public health or safety.
Increase oversight of licensing boards and decisions. To prevent the potential conflict of interest arising from industry insiders writing the licensing rules that regulate their own industry, lawmakers can extend executive and legislative review powers over industry board actions.
Establish a process for ongoing occupational licensing review. States have adopted sunrise and sunset reviews, audits, active supervision and other procedures to weigh the costs and benefits of existing and proposed occupational licensure. Some states subject all agencies created by statute to periodic sunset reviews while some require only select agencies and regulatory boards to undergo reviews.
Address unnecessary employment barriers that affect specific populations. Several states are reviewing or easing barriers that impede access to employment for specific populations, which may include active-duty military and veterans, military spouses, immigrants with work authorization, individuals with a criminal record and borrowers who have defaulted on their student loans.
Change licensing requirements for specific occupations. States have adopted new licensing requirements, changed existing ones or eliminated licensing rules altogether for specific occupations. At the same time as some states have increased certain licensing requirements, policymakers have simultaneously proposed and enacted legislation to lessen requirements, shift to a less restrictive approach (such as voluntary certification) or restrict the scope of an existing license requirement as it applies to a specific type of worker.
As described in this report, states’ experiences demonstrate the multiple pathways that can help state policymakers strike the right balance by removing barriers to work and improving labor market entry and portability across state lines.
This article was originally taken from the National Conference of State Legislatures