One would think that Washington, the home of many innovative companies, would have a welcoming environment for lower-income entrepreneurs. Unfortunately, that is not the case. Today, the rise in occupational licensing means more Americans than ever need a government permission slip before they can earn an honest living. Licenses restrict or even bar entry into hundreds of occupations, including those that offer upward mobility to workers of modest means.
Among low- to moderate-income occupations, Washington is the 9th-most broadly and onerously licensed state in the nation, according to the recently issued second edition of “License to Work,” a nationwide study by my firm, the Institute for Justice. Out of the 102 lower-income occupations examined, Washington requires licenses for 77 of them – more than our competitor states of California, Nevada and Oregon. On average, Washington workers seeking a license in one of these occupations must complete 163 calendar days of education or experience, pass an exam and spend $209 in fees.
Washington’s occupational licensing schemes are often irrational. For instance, aspiring EMTs – people who will be administering life-saving care – must complete an estimated 26 days of training and pay $80 in fees. Cosmetologists, on the other hand, face far more stringent requirements: roughly 373 days in training and $230 in fees.
According to both the Obama administration’s Council of Economic Advisers and the Brookings Institution, there is little evidence that occupational licensing laws raise the quality of services or protect consumers. In fact, occupational licensing can result in 2.85 million fewer jobs nationwide, with an annual cost to consumers of $203 billion. In other words, occupational licensing often just keeps newcomers out, low-income workers poor, prices high and quality low.
To open up opportunities for Washingtonians on the first rungs of the economic ladder, lawmakers should identify and repeal needless license requirements. And before they require licenses in new fields, lawmakers in Olympia should also demand substantial, empirical proof of widespread and significant harm and then adopt the least restrictive alternative regulation to address it.
To the extent that an occupation requires some level of governmental supervision, bonding, insurance, inspections, registration and certification requirements are less restrictive alternatives. For many occupations, even these requirements are unnecessary; the public can be protected through consumer rating websites and private certification. Occupational licensing should only be a policy of last resort.
Nationwide, licensing reform is championed by lawmakers and scholars across the political spectrum. Indeed, often the only people who advocate for the status quo are the politically connected license holders who benefit from it.
William R. Maurer is the managing attorney of the Washington Office of the Institute for Justice, a nonprofit public interest law firm.