Licensing report: Pennsylvania 31st for burdens on workers

By Anthony Hennen | The Center Square

HARRISBURG, PA – Though Pennsylvania’s occupational licensing restrictions aren’t egregious compared to other states, critics say its laws stifle economic opportunity – especially for the less well-off.

In a new report, the Institute for Justice compared states for the burden and scope of their licensing regimes and ranked Pennsylvania 31st.

The commonwealth did better than average on licensing fees ($116 compared to $284 nationally) and the average number of days lost to education and experience (120 days compared to 350), but it also required licenses for 50 of 102 lower-income jobs IJ analyzed.

“Pennsylvania compares favorably on some of the top-line measures … but when you drill down to specific occupations, there’s room for improvement,” said Lisa Knepper, the Institute for Justice’s senior director of strategic research. “And of course, you want to be better than average, right?”

Getting a license to work “can take months or even years of training, one or more exams, hefty fees, and more,” the report said. “Proponents claim these licenses are necessary to protect consumers from unsafe or otherwise poor service. Yet most evidence indicates licenses do no such thing and instead impose heavy costs on workers, consumers, and the economy and society at large.”

Nationally, the trend in recent years has been to reduce some burdens. “Nearly 20% of licenses became less burdensome,” to get, the report said. Yet, in Pennsylvania, licensing fees have usually increased since 2017. Only one license of the 102 reviewed in the analysis had been removed in recent years in the state, which applied to mobile home installers.

Licensing in many cases isn’t crucial to maintain public health and safety, Knepper argued; instead, it was a barrier to economic growth.

“People should care because occupational licensing is a drag on the economy for all of us, but particularly for people on the lower rungs of the economic ladder,” she said.

Licensing issues have flared up around niche beauty services, such as hair braiding and makeup artistry. Complicated or difficult-to-fulfill requirements mean that people can’t get a proper license and thus work in the underground economy. Doing so creates tax issues as well as worker exploitation problems, said Jessica Poitras, legislative counsel at the Institute for Justice.

A proposed bill would exempt those niche services from licensing and avoid creating the incentive to work underground.

“I do think that legislators and all policymakers should really take a look at licensing, especially again in the beauty space, to see – is this the best way to regulate this space? Does it need to be regulated?” Poitras said.
Abolishing some licenses or reducing their requirements could help workers and consumers alike.

“These exemptions are a win-win for everyone,” Poitras said. “There’s documented evidence and proof that when you remove licensing requirements for niche beauty services, thousands of jobs are created and new opportunities come to the state.”

The Institute for Justice’s report offered five strategies for improving licensing by repealing and reducing barriers, removing mobility barriers, and making it easier for people with criminal records to get a license for work.