Mississippi takes on red tape

The extent of occupational licensing in Mississippi makes it difficult for everyday Mississippians to enter professions and improve their lives. But a new law which provides more oversight for the Occupational Licensing Review Board gives Mississippi a chance to remove needless and burdensome barriers while still protecting consumers when it is needed.

When we think of occupational licensing, we typically think of dentists, lawyers, and physicians. We don’t often think of barbers, sign language interpreters, massage therapists, and taxidermists. But too often licensing impacts those professions.

This was not always the case. In the 1950s, just 5 percent of workers required a license to be legally allowed to practice in their chosen profession. Today, about one in four workers face that requirement.

The goal of occupational licensing is to protect consumers by establishing a minimum level of quality. In order to practice, aspiring professionals must demonstrate skill and competency. They do so by meeting a required level of education, hands-on training, and passing exams. Who could hate that?

In theory licensing is great; however, we can’t ignore the costs associated with licensing.

Licensing laws erect a barrier to entry, making it difficult for people to enter a profession. All of the time it takes to meet the education and training requirements and study for and pass exams is costly for people looking to enter a field. Sometimes this is going to be necessary, like healthcare providers.

But for professions that do not require a college degree, the cost of these entry requirements is going to help exclude people who otherwise would be able to practice. This limits the opportunity for aspiring professionals, especially people from low-income backgrounds. For them, the cost in time and money to meet the requirements effectively bars them from practicing, locking them out of meaningful work.

This is made even worse for those with criminal records. Licensing laws are typically accompanied with good moral character provisions. There are broad requirements that bar applicants that have been convicted of crimes. While we would obviously not want someone convicted of child abuse to work in childcare, these are often overly broad. People are locked out of work for completely unrelated offenses. Not only is this bad for people looking for a second chance to rejoin society, it actually increases recidivism, bringing more crime to the community.

Licensing also harms consumers. Because licensing laws reduce the supply of workers, it increases the costs of services from licensed professionals. So consumers end up paying more.

They’re paying more, but they’re getting higher quality services, right? Maybe not. According to a report by the Obama Administration in 2015, research finds no discernable effect of licensing on the quality of services being offered. So consumers pay more for the same quality. Only now because there are fewer professionals, they get to enjoy longer wait times and less convenient services.

Licensing laws are passed by states, so we can see considerable differences from one state to another. According to the Institute for Justice, the licensing laws in Mississippi are the 19th most burdensome in the country. While not terrible, it leaves room for improvement. Of the 102 professions that do not require a college degree studied in the report, Mississippi required a license for 66 of them. Much of this growth has been recent. From 1993 to 2012, the number of professions that now require a license to work in Mississippi increased by 49.

But recently, the Mississippi legislature has taken steps to reverse this costly trend. Starting this year, the Occupational Licensing Review Board will have the ability to review licensing laws at their discretion.

Why is this a win for Mississippi? They will be able to target areas of over regulation, where the costs of licensing will outweigh the benefits. In some cases, this will mean delicensing professions not licensed by neighboring states. In other cases, they may choose to reduce the licensing requirements, lowering the burden to the same level of neighboring states.

The goal of the review board is not to simply delicense every profession. The goal is to find the least restrictive form of regulation possible to achieve our goals. We should be able to protect the consumer from harm without creating unnecessary barriers to enter a profession for people trying to earn a living.

Currently, the extent of licensing in Mississippi makes it difficult for people to enter the professions of their choice. But thanks to the Occupational Licensing Review Board, Mississippi residents will soon have better regulation, more tailored to meet their needs while allowing competition to flourish.

This column appeared in the Daily Journal on January 28, 2020.