WATERS: Tear down Kentucky’s occupational licensing walls

Posted by on August 9, 2015

Jim Waters head

A White House report on oppressive occupational licensing requirements reads more like it came from a Rand Paul administration than the current President’s coal-hating crew.

“There is evidence that licensing requirements raise the price of goods and services, restrict employment opportunities, and make it more difficult for workers to take their skills across state lines,” the report states. “Too often, policymakers do not carefully weigh these costs and benefits when making decisions about whether or how to regulate a profession through licensing.”

Then again, sometimes they do.

For example, Kentucky’s licensing requirements for auctioneers previously were the third-most stringent among states – requiring two full years of experience to become a principal auctioneer, compared to the national average of three months.

However, the state’s Board of Auctioneers in Elizabethtown wants to double the number of Kentuckians – currently more than 2,000 – interested in the profession.

“The more, the merrier,” Ken Hill the board’s executive director said. “We don’t have enough now; we’d like to bring in some new blood.”

Hill convinced the board to reduce some entry costs and the experience requirement to a single year.

Barriers remain, including more than a week of required intensive classroom training which cannot be accessed online and is only available at two locations at costs exceeding $1,000.

Still, Hill is moving toward a common-sense licensing approach that he believes achieves “a balancing act” by protecting consumers from fraudulent auctioneer-actors and “fly-by-nighters” without insulating current auctioneers from more competition.

But there’s much about occupational licensing policies that remains unbalanced.

For instance, burdens placed by arbitrary regulations on military families were a primary motivating factor in the White House’s unusually relevant and frank report.

First Lady Michelle Obama in all of her school-lunch-changing glory has recognized that onerous licensing schemes affect the ability of service members and their spouses to find employment.

Military spouses are 10 times more likely to have moved across state lines in the past year than their civilian counterparts and “have a difficult time obtaining a new license each time they move,” the report said.

Eliminating arduous requirements for military spouses – 35 percent of whom work in professions requiring state credentials – would have a disproportionately positive impact on Kentucky, which ranks ninth-highest among states in the number of active duty military personnel stationed within our borders.

The report also notes that states can better serve returning veterans by using their excellent military training to bypass licensing policies that place “heavy burdens” on their ability to become civilian paramedics, truck drivers, nurses or welders.

How might removing barriers that still remain to heavily licensed professions open doors for Kentucky’s 27,000 military retirees?

The legislature, which has demonstrated an openness to helping military families, could do even more by recognizing that 60 percent of veterans responding to a 2012 survey indicated they had trouble translating their military skills into what Kentucky’s licensing boards consider sufficient – and significant – job experience.

The fact that only 15 of the 102 low- and moderate-income occupations looked at in an analysis by the Washington-based Institute for Justice are credentialed in 40 states or more indicates job-licensing schemes are more about cabals of incumbents seeking to keep competitors out rather than any meaningful public protection.

“These regulations don’t exist because citizens are storming the gates of the legislature begging for fences to keep out those wanting to break into the field,” said the Institute for Justice’s Dick Carpenter, who advised the White House on its recent report.

Kentucky compared to all of its neighboring states has, by far, the largest percentage of its workforce licensed, indicating there’s plenty of work that Obama’s Democrats and Paul’s Republicans could do in Frankfort to remove yet another barrier to entering and flourishing in the commonwealth’s fields of labor.

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at jwaters@freedomkentucky.com. Read previously published columns at www.bipps.org.

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Jim Waters

Jim Waters

President at Bluegrass Institute
Jim Waters is President of the Bluegrass Institute for Public Policy Solutions, Kentucky’s first and only free market think tank. Jim uses his significant media experience as a reporter, editor and broadcaster at newspapers and radio stations in Kentucky, Indiana and Ohio to grow the institute’s influence in Frankfort and its impact statewide. Jim is often quoted in the state’s major media sources on public policy issues and writes the Bluegrass Beacon, a weekly newspaper column that appears in publications statewide.