Occupational Hazards: How Excessive Licensing Hurts Small Business
WASHINGTON – Today, Subcommittee Chairman Dave Brat (R-VA) and the Subcommittee on Economic Growth, Tax, and Capital Access held a hearing on occupational licensing and its excessive impact on American small businesses.
“The percentage of the workforce that requires an occupational license has increased from less than 5 percent in the 1950s to almost 33 percent today,” said Subcommittee Chairman Dave Brat. “But one of the most telling statistics about licensing is that while there are 1,100 occupations in the United States that are licensed in at least one state, only 60 require a license in all 50 states. This inconsistency hurts worker mobility and most importantly, small businesses.”
Licensing as a Barrier to Entry
Despite small business confidence reaching an all-time high, many see burdensome licensing regulations as another barrier small business owners must overcome.
“I’m not prepared to say that licensing should go away. I need the foundation and the commitment. Let’s create reform where appropriate to better fit the current realities of trades and professions,” said Frank Zona, Owner of Zona Salons in Norwell, MA, testifying on behalf of the Professional Beauty Association.
“Some licensing requirements are necessary, but what has become evident in our own research is that for many of our members, nearly 68% in our snapshot poll, said that they find that the licensing requirements hinder their ability to operate their small business,” stated Keith Hall, President and Chief Executive Officer of the National Association for the Self-Employed in Annapolis Junction, MD.
“Occupational licensure acts as a formidable barrier to entry for low- and middle-income Americans seeking to enter new professions,” said C. Jarrett Dieterle, Senior Fellow at the R Street Institute in Washington, DC. “The result is a government-imposed barrier that arbitrarily limits Americans’ ability to work and climb the income ladder to more prosperity.”
“Evidence indicates that occupational licensing can hamper mobility, making it harder for workers to take advantage of job opportunities in other regions,” said Dr. Morris Kleiner, Professor at the University of Minnesota in Minneapolis, MN. “Overall, occupational licensing and the lack of consistency across state borders with respect to the education and training of licensed practitioners can carry broad implications for the economic well-being of individuals.”Click here to watch full hearing video, and here to read full witness testimony.