In a joint brief with the Wisconsin Institute for Law and Liberty, we lay out the problems with occupational licensing in Wisconsin and what meaningful reforms can be enacted.
For decades, the trends in occupational licensing were upward: more professions licensed, regulatory burdens imposed, educational requirements established and costs forced on aspiring workers.
But over the past few years, there has been a subtle sea change. The administrations of Presidents Barack Obama, Donald Trump and Joe Biden raised concerns about and highlighted the negative consequences of licensing on individual opportunity and the overall economy.
Governors and legislators from both sides of the aisle are working together to adopt alternatives to licensing and to pass reforms that make it easier for workers to enter their desired fields. University researchers and think tank scholars have quantified the impact of licensing on employment, income, mobility, competition and innovation. Courts cast a jaundiced eye at licensing regimes that promote self-dealing or antitrust practices.
This stems from a growing recognition that licensing often pits those with a license — market participants — against those who need to attain them. When a profession successfully lobbies state policymakers to create a new license, it is those in the field who usually set the requirements for others to follow. Licensing boards and advisory councils are empowered to establish standards for both license holders and those who aspire to the profession.
These requirements can be used to fence out competition and artificially inflate prices for consumers. They often erect significant barriers to newcomers, especially those who are economically disadvantaged. This, in turn, suppresses competition, ultimately harming consumers and stifling innovation.
The justification for state licensing regimes is that they protect public health and safety. It’s revealing, however, that concerned or injured consumers are rarely the ones advocating for professions to be regulated. It’s almost always practitioners who lobby lawmakers for state licensure.
The good news is that efforts to roll back occupational licensing or limit its effects on workers and consumers are gaining momentum nationwide. In just the past two years, numerous states have adopted significant reforms that streamline the licensing process, establish clear and narrow requirements for the creation of new licenses and/or require licenses to be eliminated if a benefit to public well-being cannot be established.
The bad news is that Wisconsin is lagging in this effort. The state currently requires 1 million1 Wisconsinites to secure these government permission slips for 280 credential types. Licensed practitioners who move to Wisconsin from other states sometimes wait months or longer to attain a license. Entrepreneurs, especially those with limited resources, are effectively shut out of entire fields.
The requirements also can be arbitrary. Wisconsin cosmetologists, for example, are required to have 1,550 hours of training, while emergency medical technicians are only required to have 180 hours. Wisconsinites need a license if they want to be an auctioneer, manicurist or landscape architect, but not if they want to be governor, a state legislator or attorney general.
For the sake of workers, consumers, economic growth and basic fairness, it’s time for Wisconsin policymakers to adopt reforms that have been sweeping across other states.
Our organizations have researched2 and reported on occupational licensing for years. In this report, we present policy solutions that can reduce the regulatory burden on license holders and aspiring workers while maintaining health and safety for Wisconsin residents.
