What if we didn’t need the government’s permission to work?

The case for certification instead of licensure

What if the government had told Henry Ford or Bill Gates they were prohibited from manufacturing or selling their products because cars and operating systems do not “serve a useful present or future purpose”, or are “inconsistent with the public convenience and necessity”?

In Missouri until 2012, that’s exactly what the state highways and transportation department told many applicants who wanted to start a moving business. No, their applications were not turned down because they represented a possible risk to life, limb, or furniture, or they might damage public highways. Applicants were denied the right to offer household moving services because a state agency fatuously found that their service did not serve a useful present or future purpose, or was inconsistent with the public convenience and necessity.

Most citizens of Missouri would be appalled to learn that a state agency had the legal authority, not to speak of the wisdom, to determine which household moving businesses were useful or necessary and which were not. Thankfully, the law regulating who may and who may not offer moving services was repealed on August 28, 2012 by amending legislation. Now a household mover must only be “fit, willing & able” to qualify for a certificate to move household goods.

Household movers now have a freer choice of occupations. But there are still thousands of Missourians, who are fit, willing, and able to pursue their occupations and want to risk their time and capital to pursue their dreams, but still must obtain state permission to work. Is there a way we could make it possible for these citizens to find productive work? I think so. Amend the law to allow occupational certification instead of occupational licensing. University of Minnesota Professor Morris Kleiner says that merely changing from occupational licensing to occupational certification would increase the number of jobs in Minnesota by 15,000.How could certification replace occupational licensing and produce additional jobs? What’s the difference? Occupational licensing is a nontransferable authorization to pursue an occupation, usually after satisfaction of the qualifications set by a government board or commission. Licensing makes it illegal for citizens without an occupational license to work at that occupation – think barbers and real estate agents. Certification, on the other hand, is a voluntary program in which the government provides recognition (title protection) based on reasonable qualifications set by a board or a private association. Non-certified individuals could still pursue their choice of occupation, but would be prohibited from using the word “Certified” in their business or occupational title.

We may not want to apply this amended process to doctors and lawyers, but most occupations surely would qualify. At minimum, the state should mandate that all occupational licensing boards should justify their continued existence by demonstrating:

  • by clear and compelling evidence that a need exists to protect against present and recognizable harm to the public health and safety;
  • that the licensing requirement is the least restrictive means for furthering that compelling governmental interest.

Licensing boards, which often are controlled by the very businesses they are to regulate, should also be required, by law, to demonstrate that there has been no misuse in applying occupational regulations so as to reduce competition or directly or indirectly affect prices.

Sadly, we don’t have a scholarly study by an economist estimating the number of Missouri jobs created by moving from licensing to certification. We can, however, present a vivid picture of the jobs that would be lost if an entire occupation were changed by the force of law from no regulation to occupational licensing. Think of the market disruption caused by a law requiring that bookkeepers and accounting clerks – whose work satisfied their employer – must now satisfy requirements set by the state and the American Institute of CPAs. What good is accomplished if a good bookkeeper must be replaced by an overqualified and more expensive one? The IRS has already moved to require licensing of all income tax preparers, regardless of their years in the business. How can anyone then doubt that thousands of jobs would be created if government permission were not required for barbers and beauticians, real estate sales persons, interior designers, athletic trainers, geologists, massage therapists, athlete agents, nursing home and assisted living administrators, landscape architects, embalmers & funeral directors, hearing aid fitters, and dozens of other occupations burdened by unreasonable and overly restrictive regulation? These regulations require education, training, and other qualifications that all too often have no rational justification or connection with protection of the public health or safety. The only protection afforded by most occupational licensing laws is protection of the regulated occupation or businesses from competition.

Let’s hope the 2013 legislature matches its 2012 reduction of government intervention in the marketplace by making it unnecessary for citizens to seek the state’s permission to work.

Bruce Hillis

Bruce Hillis

Bruce Hillis

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