Licensing Reform

I would propose similar legislation in Michigan: https://www.wsj.com/articles/a-model-for-licensing-reform-1522795235

In Nebraska you need more training to massage a horse than a human. Rub a horse without a license and you risk a criminal charge and up to four years in jail and $35,000 in penalties. Such barriers to entry hurt sore steeds, workers and the economy, so it’s good news that Nebraska lawmakers are considering an occupational licensing reform that could be a national model.

Nebraska is like many states that have built up barriers to work due to lobbying by special interests. For horse massagers, veterinarians are the monopoly culprits. The Cornhusker State requires bureaucratic permission to work in nearly 200 professions, including 63 lower-income occupations that are the labor force entryway for the poor and least skilled.

Enter the proposed Occupational Board Reform Act that says the state should “use the least restrictive regulation to protect consumers.” This means, for example, that the state could use alternatives like periodic inspections to guarantee clean and safe hair salons and barber shops. That would spare cosmetologists and barbers some 16 months of training.

Nebraska lawmakers have reformed outrageous occupational licenses one at a time, but this would allow wholesale reform. Legislative committees would review 20% of existing licensing requirements annually. They’d consider whether a license is really necessary, whether the training requirements are overly burdensome, and whether the certification is abused to exclude competition. The committees would also examine whether it’s less time- and cash-intensive to get the same licenses in neighboring states.

The annual review would occur when Nebraska’s Legislature is not in session. This lessens the potential for lobbying by licensees who benefit because current rules protect their professional turf. Lawmakers would later have the option of bundling the various committee recommendations for an up-or-down vote, further insulating them from political pressure from rent-seeking guilds.

The bill would also help Nebraskans with criminal records find work. The average lower-income license in the state requires nearly four months of training. Licensing boards currently decide if past convictions are disqualifying only after applicants do the training. The new legislation would let Nebraskans with a criminal record request a binding decision before they invest time and money. Recidivism rates are lower in states where former criminals can find gainful employment.

A vote is expected in the next two weeks, and the Nebraska bill enjoys the support of some Democrats, Republicans and libertarians—even the American Civil Liberties Union. The Nebraska model was built in consultation with the Institute for Justice, and lawmakers in Louisiana and New Hampshire have introduced similar bills.

More states should take up the cause. Red tape smothers the one in four Americans who are forced to obtain a license before working. Creating opportunity should be a priority across party lines.

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