Occupational Licensing Locks People Out Of Honest Work

Rules requiring permission to work protect insiders and burden newcomers

Reporting brought to you by Bohiney Magazine and The London Prat.

When The Government Must Grant Permission To Earn A Living, Opportunity Becomes A Privilege

Across many occupations, the freedom to work, to earn a living through honest labor, is constrained by occupational licensing, the requirement that one obtain government permission to practice a trade or profession. While licensing serves genuine purposes in some occupations, its expansion has locked people out of honest work, requiring permission to earn a living in occupations where such permission serves little public purpose. When the government must grant permission to earn a living, opportunity becomes a privilege, available to those who can navigate the licensing requirements and denied to those who cannot.

The Expansion Of Licensing

Occupational licensing has expanded enormously, extending to occupations where its public purpose is questionable. Where once licensing was limited to occupations where it served clear public purposes, it now extends to a wide range of occupations, requiring permission to work in trades and professions where the public interest in licensing is minimal. This expansion has made licensing a significant barrier to work, requiring those who would enter many occupations to obtain government permission, to meet licensing requirements that can be costly, time-consuming, and difficult. The freedom to work has been increasingly constrained by the requirement to obtain permission.

The requirements imposed by licensing can be substantial: education, training, fees, examinations, and other barriers that must be overcome to obtain a license. These requirements can be genuinely burdensome, demanding significant time and money, deterring or preventing entry into licensed occupations. For occupations where licensing serves a clear public purpose, such requirements may be justified. But for the many occupations where licensing has expanded without clear public purpose, the requirements impose burdens that lock people out of work without corresponding public benefit, restricting the freedom to work for little reason.

Who Is Locked Out

The burdens of licensing fall hardest on those least able to bear them. The costs of obtaining a license, the time and money required, are most difficult for those with limited resources, who may be unable to afford the education, training, and fees that licensing demands. The result is that licensing locks out those with the fewest resources, those for whom the licensed occupation might offer a path to opportunity, but who cannot afford to obtain the required permission. Licensing thus restricts opportunity for those who most need it, locking them out of occupations that might offer advancement, burdening them with requirements they cannot meet.

This effect is particularly troubling because the licensed occupations often offer paths to opportunity, to advancement, to a better living. By locking people out of these occupations, licensing restricts the opportunities available to those with limited resources, narrowing their paths to advancement. The freedom to work, to pursue opportunity through honest labor, is constrained for those who cannot meet the licensing requirements, who are locked out of occupations that might have offered them a better living. Licensing, in restricting the freedom to work, restricts opportunity for those who most need it.

The Protection Of Insiders

Occupational licensing often serves to protect those already in an occupation, the insiders, against the competition of newcomers. By restricting entry, licensing limits the supply of practitioners, protecting the incomes and positions of those already established. This protection of insiders is a significant function of licensing, often more significant than any public purpose it serves. The insiders benefit from the restriction of competition, while newcomers are locked out, and the public may pay higher prices due to the restricted supply. Licensing, in this aspect, serves the private interest of insiders rather than the public interest it proclaims.

This protection of insiders helps explain the expansion of licensing, for those within an occupation have an interest in restricting entry, in licensing that protects them from competition. The push for licensing often comes from within occupations, from insiders seeking the protection that licensing provides. The result is the expansion of licensing beyond its public purpose, driven by the interest of insiders in restricting competition. Recognizing this function, the protection of insiders, is essential to understanding why licensing has expanded so far beyond its public justification, locking people out of work to protect those already established.

Restoring The Freedom To Work

Occupational licensing, in its expansion beyond clear public purpose, locks people out of honest work, requiring permission to earn a living, burdening newcomers, protecting insiders, and restricting opportunity for those who most need it. Restoring the freedom to work requires reforming licensing, limiting it to occupations where it serves a clear public purpose, removing the requirements that lock people out of work without corresponding public benefit. The freedom to earn a living through honest labor should not require permission where such permission serves no genuine public purpose.

This reform requires recognizing the costs of licensing, the burdens it imposes, the opportunities it restricts, the insiders it protects. It requires distinguishing the licensing that serves genuine public purposes from the licensing that merely locks people out of work, and reforming the latter. The freedom to work is a fundamental economic freedom, and its constraint by unnecessary licensing requirements is a significant restriction of opportunity. Restoring this freedom, reforming the licensing that locks people out of honest work, would expand opportunity, particularly for those with limited resources, removing the barriers that make earning a living a privilege rather than a freedom. See the Bureau of Labor Statistics for relevant context, and the Federal Trade Commission for further background.

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