States Increasingly Impose Costly Licensing Requirements on U.S. Workforce

Tuesday, June 21, 2016
(graphic: OSHA)




By Patricia Cohen, New York Times


SCOTTSDALE, Ariz. — “I usually start behind the neck,” Grace Granatelli said from her plump brown sofa. “There’s two pressure points back behind the ears that help relax them a little bit.” In her lap, she held the head of Sketch, her mixed beagle rat terrier, as her fingers traced small circles through his fur.


Ms. Granatelli, whose passion for dogs can be glimpsed in the oil portrait of her deceased pets and the bronzed casts of their paws, started an animal massage business during the recession after taking several courses and workshops. Her primary form of advertising was her car, with its “K9 RUBS” license plate and her website, Pawsitive Touch, stenciled onto her rear window.


But in 2013, Arizona’s Veterinary Medical Examining Board sent her a cease-and-desist order, demanding that she close up shop for medically treating animals without a veterinary degree. If not, the board warned, every Swedish doggy massage she completed could cost her a $1,000 fine.


To comply with the ruling and obtain a license, Ms. Granatelli would have to spend about $250,000 over four years at an accredited veterinary school. None require courses in massage technique; many don’t even offer one.


Animal masseuses are hardly alone. Over the years, states across the country have added licensing requirements for a bewildering variety of jobs, requiring months or years of expensive education, along with assessing costly fees.


Today, nearly 30 percent of the American work force needs a license to work, up from about 10 percent in the 1970s, according to Morris Kleiner, a professor of public affairs at the University of Minnesota, who has studied the issue.


The Obama administration and the conservative political network financed by the Koch brothers don’t agree on much, but the belief that the zeal among states for licensing all sorts of occupations has spiraled out of control is one of them. In recent months, they have collaborated with an array of like-minded organizations and political leaders in a bid to roll back licensing rules.


On Friday, the White House announced that it would provide $7.5 million in grants to organizations interested in working with states to reduce overly burdensome licensing and make it easier for licensed practitioners to work across state lines, an issue of particular importance to military families.


“This grant is the first time the federal government has directly gotten involved to help states that want to reform their licensing practices,” Jason Furman, chairman of the White House Council of Economic Advisers, said in an interview. “It was something a Democratic president proposed and a Republican Congress passed.”


Economists on both the left and the right argue that excessive licensing raises prices for consumers without improving services; it can also deter potential workers from moving across state lines, dragging down employment growth.


“There is no labor economist who thinks it is good for the economy,” said Lee U. McGrath, legislative counsel in Minnesota for the Institute for Justice, a libertarian organization whose lawyers are representing Ms. Granatelli in a lawsuit against the Arizona veterinary board.


In Tennessee, a license is required to shampoo hair; in Florida, to sell a yacht. In Montana, you need the state’s approval to be an egg candler; in Utah, to repair upholstery; in Louisiana, to be a florist.


No one disputes that health and safety concerns make licenses indispensable in certain demanding professions, like nursing or flying a commercial airplane, and they are sometimes helpful in improving standards and providing quality assurance to consumers.


But the current mishmash of requirements is too often “inconsistent, inefficient, and arbitrary,” a White House report concluded last year. Many of them, the report said, have little purpose other than to protect those already in the field from further competition.


Requirements for the same job often have whiplash-level variation. South Dakota requires 2,100 hours of education and a cosmetology license to braid hair — a popular entry point into the labor force for African-American women. South Carolina demands only a six-hour course.


Security guards in Michigan need to have three years of training; none is needed in New Hampshire and Ohio.


“Why in the world do we regulate barbers?” asked Mark Hutchison, a Republican and the lieutenant governor of Nevada, which shares billing with Arizona as one of the states with the most burdensome licensing requirements, according to the Institute for Justice. “A bad haircut is the last thing that a person is going to put up with and return to. It is the ultimate example of self-regulating industry.”


The problem is particularly acute for military spouses, who move frequently, as well as veterans and immigrants, who may have extensive training but lack a particular state’s seal of approval. And there are at least 27,000 different licensing restrictions across the states affecting people with arrest and conviction records. Most of them permanently disqualify applicants, meaning a minor transgression as a teenager can prevent someone from working in many fields decades later.


The most regulated states, paradoxically, are red. “Even Republican governors with Republican legislatures in pretty conservative states have still found it extremely difficult to effect change,” said Dick M. Carpenter, strategic director of the Institute for Justice. “When there is an effort to dial back legislation, then the licensed industry turns out with huge counterattack. This is the same story that plays out in every state.”


Only rarely are licensing requirements removed. Last month, though, Arizona agreed to curb them for yoga teachers, geologists, citrus fruit packers and cremationists.


But dozens more professions escaped the ax. “Arizona is perceived as a low-regulatory state, but this was the most difficult bill we worked on this session,” said Daniel Scarpinato, a spokesman for the Republican governor, Douglas Ducey.


Licensing boards are generally dominated by members of the regulated profession. And in Arizona, more than two dozen of the boards are allowed to keep 90 percent of their fees, turning over a mere 10 percent of the revenue to the state.


“They use that money to hire contract lobbyists and P.R. people,” Mr. Scarpinato said. “This is really a dark corner of state government.”


They are often joined in their campaign by lobbyists from industry trade associations and for-profit colleges, which sell the required training courses.


Economists like Mr. Kleiner say there are less burdensome ways to highlight quality. For example, certification, with an exam to ensure a certain skill level, could be required to use a particular job title — like certified tour guide or chartered financial analyst — without prohibiting others from offering the service, perhaps at a lower price.


The power of licensing boards was challenged last year when the Supreme Court ruled that the North Carolina dental board could be sued under federal antitrust laws for shutting down teeth-whiteners because they were not licensed dentists.


The court’s decision may prompt some states to monitor licensing boards more closely, said Robert C. Fellmeth, executive director of the Center for Public Interest Law at the University of San Diego.


At the state level, the Institute for Justice has filed lawsuits arguing that various licensing boards are unconstitutionally interfering with the right to earn a living. That includes the one brought by Ms. Grantelli and two experienced horse massagers, Celeste Kelly and Stacey Kollman in Arizona.


Victoria Whitmore, executive director of the vet board in Arizona, said the board’s decision had been misinterpreted. It issued a “cease-and-desist to stop practicing veterinary medicine, not to stop massaging,” she said. The problem, the institute’s lawyers say, is that there is no way for practitioners to figure out where to draw that line.


Once the lawsuit is finished, Ms. Whitmore said, it is possible the board will offer more guidelines.


Ms. Kelly, whose strong hands can zero in on a knotted muscle like a heat-seeking missile, said she was continuing to work despite the order from the licensing board. She grew up around horses at her father’s riding stable in Long Island and has taken several courses and workshops in equine massage


Local veterinarians have frequently referred horse owners to her. “They don’t want to do it,” said Ms. Kelly, who charges $55 for an approximately 90-minute massage. “It takes too long.”


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