Occupational licensing reform in Wisconsin should be bipartisan issue

Nationally and across the states, policy-makers from both parties are supporting less burdensome licensure rules

By ED TIMMONS | August 14, 2019

Although a number of issues divide the citizens of Wisconsin, occupational licensing reform should not be one of them.

Eighteen percent of workers in Wisconsin are licensed, but this statistic does not tell the whole story. All Wisconsin residents are forced to pay higher prices for professional services as a direct result of occupational licensing. Countless others are unable to pursue their dreams of entering a licensed occupation — the costs associated with licensing present too much of a burden. Recent estimates suggest that occupational licensing nationally reduces the supply of workers by 17% to 27%.

Under the Walker administration, Wisconsin enacted significant licensing reform for barbers, cosmetologists and low-income residents.

In a previous commentary, I noted how Wisconsin nevertheless continues to have significantly higher licensing fees for cosmetologists than bordering states.

This is not the only instance in which Wisconsin is potentially subjecting its citizens to overly burdensome occupational licensing restrictions.

Aspiring massage therapists in Wisconsin have to complete 600 hours of education, pass two exams and pay $150 to the state. Bordering state Minnesota does not require state licensing and instead leaves it to individual cities to determine if they should license the profession.

Wisconsin also requires licensing for vehicle salespeople. No state that borders Wisconsin requires this license.

At the national level and across the states, licensure reform is increasingly gaining bipartisan support. In fact, one of the most comprehensive reports on the effects of occupational licensing was issued by the Obama administration in the summer of 2015. The report encouraged states to adopt “institutional reforms” that take into account the “costs and benefits” associated with occupational licensing.

And several Democratic governors have heeded this call.

In Virginia, a law was passed initiating a three-year pilot program to reduce regulations (including occupational licensing restrictions) by 25%.

In Rhode Island, the state’s Office of Regulatory Reform reduced the number of pages of regulation by more than 30% — including the elimination of 22 occupational licenses. Most recently, Rhode Island eliminated hair-braider licensing.

Both Montana and Pennsylvania have passed bills creating a pathway for all out-of-state residents to obtain licensing via endorsement.

In Colorado, Gov. Jared Polis vetoed bills that would have added licensing requirements for managers of homeowner associations, genetic counselors and sports agents and expressed an interest in pursuing additional reform.

Licensing reform is an issue that everybody should be able to get behind. Even nationally, with partisan rhetoric ramping up in the 2020 Democratic presidential primary, both Joe Biden and Andrew Yang have noted the need to pursue occupational licensing reform.

There are a number of issues that continue to divide us, and there may not be an easy way to resolve these differences. When it comes to reforming occupational licensing, however, one’s political stripe should not matter. The stakes are simply too high for policy-makers to punt on this issue.

Ed Timmons is a visiting fellow at the Badger Institute. He is a professor of economics at Saint Francis University in Loretto, Pennsylvania, and director of the Knee Center for the Study of Occupational Regulation

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