Consumer prices continue to rise, and President Joe Biden probably won’t fix the problem soon. But states have some options to curb this insane inflation.
One of those options is reforming occupational licensing.
As of March, consumer prices had increased 8.5% over the past 12 months. That means various goods and services have become more expensive. Thankfully, there is a way to boost wages for many workers while simultaneously lowering prices for consumers.
Burdensome occupational licensing laws cost the United States nearly 3 million jobs. They are a major barrier to entry to better-paying jobs for working-class people, and trade schools that often cost north of $10,000 contribute to the student debt problem.
It doesn’t need to be that way.
If there were a greater supply of workers, it would put more money in the pockets of the public. If there were more barbers, they would have to compete for business and lower their prices. Likewise, more cosmetologists would mean cheaper trips to the salon. And if more plumbers and electricians were competing for business, they’d have to charge reasonable prices. The same is true of many other skilled labor positions.
In all, excessive occupational licensing costs consumers more than $200 billion per year, according to the Brookings Institution. So, how can states give these savings to their people?
States should eliminate licenses for jobs that don’t need them. This includes ridiculous licenses for fortune-tellers, florists, and hair braiders, but also ones that real-world data show are unnecessary. If a job isn’t licensed in all 50 states, that’s usually a good sign the license doesn’t need to exist. Additionally, jobs such as being a barber or cosmetologist and others that don’t pose a severe public safety threat shouldn’t need licenses.
There wasn't some massive rush of emergency room visits in March, April, and May 2020 when people gave themselves haircuts at home, and half of the European Union countries don't have barber's licenses. Employers can determine competence, health inspectors can ensure sanitation, and private certifications can also exist.
The United Kingdom also doesn’t have barber’s licenses, and people can cut hair in that highly developed country without going to 1,000 hours of barber school or more. The National Careers Service tells people about several different ways to become a barber. It says, "You could get into this job through: a college course, an apprenticeship, working toward this role, freelance work.”
And in professions in which licenses make sense, states can take many actions to bolster their workforces.
Reciprocity with every other state in the country helps; Arizona has it already, and it is creating jobs there. Reducing the classroom hours necessary to get a license could also make trade schools less expensive.
States can also stop revoking work licenses when people default on student loans; paying off loans becomes harder when one cannot work. Offering apprenticeship paths to licensure gives people an option outside of sitting in a classroom.
Scrapping unrelated educational requirements knocks down barriers for people who struggled academically when they were younger. Plus, removing subjective good moral character clauses from licensure would be a positive step toward criminal justice reform.
If states take serious action on the occupational licensing issue, they can lower the cost of living for their people. Since the federal government will not do that anytime soon, states should do it themselves.
Tom Joyce (@TomJoyceSports) is a political reporter for the New Boston Post in Massachusetts.