TEN IDEAS: Repeal Unnecessary Barriers to Obtain Occupational Licenses

Each time there is a bad actor who causes harm, the government examines how to prevent it from happening the future. This is appropriate. But it’s inappropriate when industry insiders lobby the legislature or regulators to create barriers to entry that have only a pretextual connection to consumer protection. Oldest trick in the book. And it hurts middle-class Ohioans.

In the 1950s, 5% of jobs required a government license. Today, that number is 25%. And an unlicensed person earns 7% less in income than a person with a license.

Ohio is as bad as any other state. For instance, the regulations on hair salons contain 42,420 words. You literally need a lawyer to get it right. If you’re already in the business, it helps to have high barriers, because it reduces competition. But for someone who is seeking to exit a minimum-wage job, and seeking to find a real career, it is an impediment.

As with yesterday’s idea to remove barriers of entrepreneurship, this idea will have wide bipartisan support. President Obama has expressed his desire to roll back licensing regulations, for the very same reason: it hinders opportunity for upward mobility (see link). By eliminating unnecessary licenses, we can increase economic opportunities, promote healthy competition (i.e., good for consumers), and encourage innovation.

Senate Bill 255 is a great start. I’ll support it in next year’s General Assembly.