Occupational licensing is intended to safeguard the public from unqualified, incompetent charlatans whose low-quality goods and services put the health and safety of Maine consumers in jeopardy. This level of regulation is necessary for occupations that pose legitimate health and safety risks to the general public. However, rarely are consumers the ones who call on government to license an occupation after receiving low-quality services. Instead, it is often the industry seeking licensure that insists an occupation be regulated by government.
Workers wish to be licensed because there is a significant wage premium to be enjoyed by practicing within a licensed occupation. Morris M. Kleiner, a labor policy professor at the University of Minnesota widely cited for his research on occupational licensing, estimates that occupational licensing allows licensed workers to charge up to 15 percent more for their goods and services. Further, a report published by the Foundation for Economic Education found that, “by excluding some providers of a service from the market, regulations reduce competition and form a kind of ‘cartel’ in which service providers can afford to charge high prices without fear of losing customers.”
In other words, occupational licensing establishes a government protected quasi monopoly where competition is rare, if non-existent, due to the requirements imposed by government to legally enter the profession. When licensing regimes are first established, those currently practicing within the occupation are typically grandfathered in — a convenient win for those special interest groups looking to “protect” Maine citizens. Because of limited competition, service providers can charge more for their goods and services, and consumers are forced to pay this price if they cannot access an alternative provider.
States also impose increasingly arbitrary licensing requirements on professionals practicing in “dangerous” industries. For example, barbers (a profession I contend should not be licensed) in New England states experience varying levels of burden determined by the state in which they practice. Mandatory education and experience requirements for New England barbers can vary between 187 and 779 days. The number of exams range from one to three, and the fees required to obtain a license deviate from $41 in Maine to $164 in Massachusetts.
If this line of work truly posed legitimate health and safety risks to consumers, you would expect uniform licensing standards to be applied across state lines. Child care providers, for example, are subject to licensing requirements in every state. While licensing requirements for child care providers do vary slightly from one state to another, the regulations imposed on these professionals are typically formed around nationally recognized standards that have been developed due to the irreparable harm a child can experience as a result of low-quality care. For professions that do not pose legitimate health and safety risks, like barbers, state regulators have aimlessly applied licensing requirements at the behest of special interests without any forethought of the economic implications.
In addition, occupational licensing creates genuine hardship for workers who seek to relocate to another state. Due to the lack of reciprocity within existing occupational licensing regimes, many licensed workers do not have the freedom to practice in other states, even if the state they move to licenses the same profession. In 2014, Annette Stanley moved from Kansas to Arizona but was unable to practice as a licensed behavioral health counselor because the board of licensure in Arizona did not recognize the experience she accumulated at the practice she owned in Kansas. Despite her obvious qualifications, Stanley was not permitted to practice in Arizona until November 2017.
This is unnecessarily challenging for many professionals, particularly those who reside close to state lines. For example, the Plumber’s Examining Board in Maine will not recognize an occupational license issued by another state unless “that state or territory has licensing standards and experience requirements at least equivalent to this State’s…” For a master plumber looking to relocate to Maine, unless the state s/he moved from requires plumbers to accumulate 1,460 days of experience within the profession, the plumber cannot legally practice in Maine. Research shows that the lack of reciprocity limits interstate mobility and primarily affects women, who are more likely to hold licensure than men.
Over the years, regulators across the country, including ones in Maine, have surrendered to the whims of entrenched industries. Today, occupational licensing has grown to encompass gobs of professions that pose no legitimate threat to Maine citizens, including barbers, boxers, dietitians, interior designers, land surveyors, sardine packers, soil scientists, taxidermists and wood scalers.
As previously highlighted by The Maine Wire, existing rules in Maine are incomprehensible given the scope and purpose of occupational licensing. Emergency Medical Technicians are required to accumulate only 26 days of training and experience while log scalers, who measure and estimate the value of logs, must obtain 730 days of relevant work experience before earning a license to practice.
An Emergency Medical Technician’s work undoubtedly affects the health and safety of Maine citizens, yet requires less training in Maine than someone who measures logs. What is the logical justification for this when less restrictive regulatory alternatives exist? For some licensed professions in Maine, market competition alone provides adequate consumer protection.
It is time for Maine to review its various licensing regimes and eliminate those that were not established for the purpose of mitigating legitimate health and safety risks.
