Weeding Out Unneeded Occupation Licenses in Hawaii

BY RONALD FRASER – Not all occupation licensing laws on the books in Honolulu actually protect Hawaii consumers from harm.  It’s pretty clear that many of these laws misuse state sanctions to protect existing businesses from unwanted competition.  Now a new study by the Washington-based Institute for Justice can helpHawaii lawmakers decide which of these laws serve the public, and should stay, and which should go.

The report, License to Work: A National Study of Burdens from Occupational Licensing, examines licensing practices for 102 lower wage occupations in all 50 states.  If you want to work in one of the 43 occupations licensed in Hawaii you may need to meet a minimum age requirement, demonstrate a certain level of often irrelevant experience and training, pass an exam that may have little to do with your job, and pay a licensing fee.

Some licensing requirements make sense.  But of the 102 occupations reviewed, only seven — Cosmetologist, Pest Control Applicator, School Bus Driver, City Bus Driver, Emergency Medical Technician, Truck Driver and Vegetation Pesticide Handler — are regulated in Hawaii and all other states.

Beyond this handful of occupations with widely recognized public health and safety issues, the report questions the motives for licensing many others. “Occupational practitioners,” the authors write, “often through professional associations, use the power of concentrated interests to lobby state legislators for protection from competition through licensing laws. Such anti-competitive motives are typically masked by appeals to protecting public health and safety, no matter how facially absurd.”

There are three ways to sort out the occupations that need state oversight from those that serve no compelling public purpose.

First, if consumers in more than one half of the states get along just fine without regulating an occupation, there is a good chance Hawaii’s licensing requirements are not necessary.  In this category we find the following occupations licensed in Hawaii along with a small number of other states that also regulate them:  Optician, Crane Operator, Weigher, Travel Agent and Travel Guide.  Licensing such trades is both unnecessary and foolish.

Next, if the licensing requirements in Hawaii are a lot stiffer than those in use in other states, there is a good chance Hawaii’s requirements serve mainly to protect existing businesses from competition rather than protect consumers.  For example, in Hawaii teacher’s assistant must train for two years compared to a national average of 152 days.  Cosmotologists are required to train for 420 days versus a national average of 372 days.

Lastly, if licensing requirements have little to do with protecting the health and safety of  Hawaii consumers, chances are they have a lot to do with protecting existing businesses from competition.  Occupations with little or no public health and safety-based issues, but still licensed in Hawaii, include: Sheet Metal Contractor; Terrazzo Contractor; Door Repair Contractor; Drywall Installation Contractor and Glazier Contractor.

For those occupations that do not clearly present an obvious need for the state to protect the health and safety of Hawaiians, the report identifies private sector alternatives to state oversight.

One option is voluntary certification through professional associations.  This allows practitioners to distinguish themselves but also allows consumers to decide for themselves how much value to place on such credentials.  The National Institute for Automotive Service Excellence, for example, presently confers their ASE certificate on about 350,000 mechanics.

In addition, instead of state sanctions, third party consumer organizations such as the Better Business Bureau and Angie’s List hold occupational practitioners accountable for the quality of their goods and services.

The report ends with this advice for state policymakers.  “When reviewing current or proposed licensing laws, policymakers should demand proof that there is a clear, likely and well-established danger to the public from unlicensed practice… [and] … Forcing would-be workers to take unnecessary classes, engage in lengthy apprenticeships, pass irrelevant exams or clear needless hurdles does nothing to ensure public safety.”

Ronald Fraser, Ph.D., writes on public policy issues for the DKT Liberty Project, a Washington-based civil liberties organization.  Write him at:fraserr@erols.com

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