The Gazette-Mail’s recent article discussing legislative efforts to ease West Virginia’s occupational-licensing laws seriously overstates the benefits of such laws and seriously understates the burdens they impose on entrepreneurs and consumers.
Occupational licensing has exploded over the past 50 years, with roughly one in four jobs now requiring some form of government license. Yet studies overwhelmingly show that occupational licensing fails to achieve its aims while imposing unjustifiable costs.
Contrary to the claim that licensing increases quality, the Obama administration report cited actually found that, in a majority of studies, “licensing did not increase the quality of goods and services, suggesting that consumers are sometimes paying higher prices without getting improved goods or services.” Add in the fact that the burdens of occupational licensing disproportionately fall on minorities, low-income workers and older workers, and it becomes clear why change is needed.
No one doubts that West Virginia lawmakers have an interest in consumer protection, but they have other effective tools besides full-blown licensing to choose from. Options like voluntary certification and insurance requirements can achieve the same results without stifling competition or raising prices — a win-win for both entrepreneurs and consumers.