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05.03.2017

Congress Joins The Fight Against Occupational Licensing

On April 26, Rep. Tim Walberg (R-MI) introduced the New HOPE Act, which would allow governors to use existing federal funds for technical education “to identify and eliminate excessive occupational licensure.” Sen. John Cornyn (R-TX) has introduced similar legislation in the Senate.

This bill follows the licensing reforms that Rep. Walberg unsuccessfully pushed last year. But with the growing realization in Washington, D.C. and state capitols that today’s level of occupational licensing has grown too large in both scope and scale, there is much reason for optimism that the bill will become law this year. In the following interview, Rep. Walberg explains why the New HOPE Act would help promote state-level occupational licensing reforms that increase economic opportunity.

Jared Meyer: Licensing has historically been controlled by states. Why do you think that it is time for the federal government to get involved?
Rep. Tim Walberg: Instead of a heavy-handed approach, the New HOPE Act draws attention to the tangled web of licensing fees and requirements and gives states additional tools to streamline them.

I’m a longtime proponent of the principles of federalism, and the New HOPE Act stays true to those principles. It encourages states to review their occupational licensing requirements by giving governors flexibility to use existing federal funding to identify and reduce unnecessary obstacles to employment. Many states like Michigan are already doing these reviews, and this bipartisan bill helps put the right incentives in place to persuade other states to follow their lead.

The federal government does have an interest in promoting economic mobility and reducing government-imposed barriers to employment, particularly for low-income workers. The House Education and the Workforce Committee, which I sit on, is already working to reauthorize the Career and Technical Education Act and close the skills gap. I’ll be pushing to include the New HOPE Act as part of this bill.

JM: Opponents of occupational licensing reform often claim that cutting back on government-mandated training or fees will endanger public safety. How do these claims hold up in your home state of Michigan?

TW: We certainly have a responsibility to protect public health and safety. Yet many of today’s licensing requirements are too complex, arbitrary, or beyond their intended purpose . For example, in Michigan, you need a license to install wood floors. But you don’t need a license to install carpet or vinyl floors.

Over the years, we’ve seen these subjective barriers stack up. In 1950, roughly one in twenty Americans worked in a job that required a state-approved license or certification. Today, it is at least one in four — a drastic 500 percent increase. Compounding the problem, a patchwork of requirements can vary greatly between states and occupations. At today’s levels, occupational licensing has become an anti-worker, anti-competitive, anti-jobs system that is propped up by unsubstantiated appeals to public safety.

The data has shown that simply adding layers of licensing rules does not yield better safety outcomes in most fields. It’s also important to note that there are other ways to promote safety for workers and the public. Through inspections or insurance and registration requirements, states can protect consumers without full licenses. Where licensing laws have become too excessive, it’s time for state policymakers to roll them back to create greater opportunity for aspiring workers and entrepreneurs.

JM: The Mackinac Center, a leading Michigan think tank, recently came out with a report on how to reform the state’s occupational licensing laws. What advice would you give Michigan policymakers and Governor Rick Snyder as they continue to work on this issue?

TW: Governor Snyder deserves credit for championing this cause in our state. So far, Michigan has de-licensed seven occupations, which is more progress than any other state has made. But there are still 164 licensed occupations in Michigan, ranging from landscapers to librarians. So there’s more work to do and the Mackinac Center’s report makes the case for reform and illustrates the cost of inaction.

As lawmakers continue to push for reforms, I encourage all parties to work together to restore sanity to licensing rules that defy common sense and force workers to needlessly jump through hoops to enter the workforce. These reforms will boost our economy, enhance job creation, and provide greater opportunity to climb the economic ladder. It’s a conversation each state should be having. The New HOPE Act aims to help jumpstart those conversations.

JM: I am glad to see that occupational licensing is receiving the attention from Congress that it deserves. The New HOPE Act complements Rep. Mark Meadow’s and Sen. Mike Lee’s ALLOW Act, which would reform occupational licenses in Washington, D.C. and on federal lands. Both bills address the fact that licensing has gotten out of hand, but they respect states’ primary roles in reforming their broken systems. If the NEW Hope Act becomes law, governors would be wise to redirect some of their federal funds to reforming occupational licensing and creating more economic opportunity in their states.


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This article was originally posted by Forbes.
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