Occupational licensing, the requirement that individuals gain government permission before entering certain professions, creates substantial barriers to work and limits economic opportunity. This reality is acknowledged by those with ideological viewpoints as diverse as President Obama and Senator Mike Lee.
Despite a growing momentum for change, it remains difficult to pass effective reforms. Many established businesses and trade associations support higher government-imposed barriers to entry because increased costs limit their competition.
Wisconsin stands out as one of the few states that overcame opposition and passed meaningful occupational licensing reforms . Last year, Representative Dale Kooyenga sponsored a bill that stopped local governments from creating new occupational licenses or levying additional fees. This was a welcome first step because occupations including Christmas tree sellers and secondhand dealers currently require licenses in a number of Wisconsin communities. If this reform was passed a decade ago, it is estimated that 100 fewer occupations across the state would require a local license.
In what follows, Representative Kooyenga explains how excessive licensing requirements harm economic opportunity. He also shares his insights on the best practices for successful reforms.
Jared Meyer: When did you first realize that occupational licensing made it harder for people to start working?
Dale Kooyenga: I’m the son of a garbage man, so I had to figure out how to pay for my college after high school graduation. As a result, I attended a two-year college before enrolling in a small private college in Wisconsin. When I arrived, the guidance counselor told me that my anticipated graduation date would be May 2002. I corrected him and pointed out that I was on track to graduate in four years, or in May 2001.
But I was mistaken. Wisconsin, like most other states, passed a law that required all certified professional accounting candidates to have 150 credits (approximately five years of courses), effective January 2001. I did the quick math—$30,000 for tuition plus $45,000 in a year of lost income—and found that the new law was going to cost me $75,000. As a result, I doubled up on my class load, took summer classes, and barely graduated in the three and a half years that allowed me to be grandfathered in under the old standards.
Since I was elected as a legislator, I have had the opportunity to met many middle- to low-income citizens who face limited work opportunities because of licensing. These people are hardworking, but government-imposed burdens make it too costly or time consuming to start working. Stories like this are common as one in five Wisconsinites needs a license to work. This is why a major focus of my years in the Wisconsin Assembly has been on rolling back occupational licensing injustices.
JM: Based on your experience in Wisconsin, what advice do you have for policymakers who want to reform occupational licensing in their states?
DK: The simple question to ask when evaluating licenses is, “Is the license and related education and training the only way to provide clear consumer health and safety protection?” If not, the requirements should fall or go away completely. Because of this, it is tempting for legislators to attempt to pass a large licensing reform bill—one that immediately ends dozens of unnecessary licenses or reduces education or experience requirements across-the-board.
But this approach provides an opportunity for special-interest groups to unite with other special-interest groups against the single bill. Established businesses want higher barriers to entry so that they face lower levels of competition . They have a financial stake in maintaining the status quo.
Comprehensive licensing reform bills will rarely pass because the opposition is simply too strong. I have found it more effective to first play defense by stopping new licenses and other associated requirements. I also select very specific, particularly egregious examples to pass narrow bills that eliminate individual licenses or lower the education and experience requirements.
JM: I noticed that your bill did ban municipalities from licensing one occupation—photographers. This must be one of your particularly egregious licensing examples. People seriously needed government’s permission to take pictures for a living?
DK: Yes, believe it or not, the city of Milwaukee required a license to take photos . As a pragmatic move, our bill banned local units of government from creating new licenses. But beyond that, we thought it was important to highlight examples of what we were banning. This is why we specifically said in the bill that no city could require a license for photography. Photography clearly poses no threat to public safety.