Conor Norris and Edward Timmins: Shapiro’s licensing reforms deserve attention this election season

As we approach the finish line of the 2024 election, Pennsylvania appears to be on the radar of both Vice President Kamala Harris and former President Donald Trump. Whoever wins this state will very likely also win the election and thus become the next President of the United States.

With all the attention focused on the election, some important reforms in the Keystone State are going unnoticed.

First, the Shapiro administration has focused its attention on reduction in license processing time. These delays can leave skilled workers behind, costing them time and money. This also means that consumers have less choice in the market. Secondly, the license was cancelled, which was difficult to justify. HB 1820 was signed into law by Governor Josh Shapiro, eliminating the 300-hour training requirement for beginner hair braiders.

Why are these reforms important? Should we fear that Pennsylvanians are now less safe? In most cases, it is easy to know if what we are buying is good enough. We can rely on friends, recommendations, or even our own past experiences.

But some services are different. As consumers, we cannot be sure that a service is good before we make a purchase. For the person who mows your lawn, this is no big deal. But sometimes it can cause serious harm. Licensing laws attempt to address this problem in two ways.

First, before an aspiring professional can practice, he must apply to a professional board for a license. To obtain a license, they must meet educational requirements, complete practical training and pass exams.

Second, licensing boards supervise practitioners. Those who do not meet professional standards may be subject to penalties, including loss of license and ability to practice.

It may seem that licensing is a very good thing and keeps us safe. Unfortunately, licensing laws work much better in theory than in practice. Economists can’t find evidence that licensing laws improve the quality of services that consumers receive. In fact, only four of 22 studies testing the impact of licensing on quality found that licensing led to improvement.

Even if licensing requirements alone don’t protect consumers, oversight from a board of expert professionals would certainly help, right? Unfortunately, the facts suggest otherwise. Thanks to a 2017 Idaho ordinance, we have five years of detailed descriptions of disciplinary actions by some licensing boards. Our analysis shows that these boards are equally likely to enforce procedural requirements (often unrelated to quality of care) as they are to correct actual quality violations. And any disciplinary action, quality-related or not, was rare.

Licensing may not protect consumers, but it does protect professionals from competition. Entry requirements that are supposed to improve quality for consumers also make it more difficult to enter the profession. This has a tangible impact on people’s decisions to enter a licensed profession. In general, licensing laws reduce the number of licensed professionals. by 25%.

Consumers may not be getting better service from licensed professionals, but they are paying. higher prices. This is because when we limit the number of professionals in a particular field, they can charge consumers more. Professionals who do this earn more, but not for offering better services. They benefit by completely excluding people from the profession.

What should states do based on the available evidence? First, they should limit the damage rather than create new licenses. Each year, numerous licensing bills appear in state legislatures across the country. Further, states can reduce onerous licensing requirements to reduce the negative consequences of licensing. When licensing is not necessary, states should abandon it in favor of market competition or more targeted regulation that protects consumers more effectively and less costly.

The Shapiro administration deserves credit for recognizing the costs of occupational licensing and moving forward with reforms. There is still much work to be done, but lawmakers and the executive branch of the Keystone State are taking important steps to remove unnecessary barriers for workers.

Conor Norris is assistant director and Edward Timmons is director. Knee Labor Regulation Study Center at West Virginia University. Timmons is also a senior fellow Archbridge institute.