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Issue Brief: Occupational Licensing Burdens


February 21, 2019



Issue Brief: Occupational Licensing Burdens


Understanding the Issues: Occupational Licensing Burdens

Occupational licensing has grown to be one of the most onerous barriers to entering the workforce in the United States. In the early 1950s, less than five percent of workers were licensed by a state to do his or her job. As of 2018, 19% of workers were licensed nationwide. While a license is warranted for some occupations, many states have unnecessarily placed burdensome licensing requirements on occupations that have little connection to public safety.

The Burden of Licensing in Oklahoma

U.S. map that is color coded for the ranking of states by share of workforce licensed.In Oklahoma, 19% of the workforce is licensed, ranking Oklahoma 25th in the nation for share of the workforce with a license. Within the 19% of workers licensed in Oklahoma, licensure requirements can vary greatly. And even among the same occupations, licensure requirements can vary greatly from state to state.

According to a 2017 study that examined the burdens of licensing for 102 lower-income occupations, Oklahoma has the 18th most burdensome licensing laws in the nation. Among the 102 occupations studied, Oklahoma licenses occupations that are unlicensed elsewhere, such as packers (only licensed by six states), title examiners (only licensed by seven states), and locksmiths (only licensed by 14 states). Oklahoma also places larger burdens on some occupations that do not have public safety implications and smaller burdens on occupations that may present greater health and safety risks.

According to another 2017 study that analyzed the impact of licensing requirements on 10 low and moderate income professions, Oklahoma has the 9th most burdensome licensure requirements in the nation and the 2nd most burdensome in the region. The study also estimated that employment in the 10 studied occupations could increase by more than 8% in Oklahoma if the state would change the licensing requirements to be similar to that of Hawaii, the state with the least burdensome licensing requirements.

Occupational Licensing Reform

Oklahoma is taking strides to improve the state’s licensure burden. In 2018 the Legislature passed a bill to create the Occupational Licensing Advisory Commission, which is comprised of a broad representation of needed stakeholders, including legislators, industry members, information technology, and others. The Commission is tasked with conducting a review of all occupational licenses and making recommendations to the Legislature. In 2019, multiple bills were filed to responsibly reform occupational licensing. Some of the potential reforms include reciprocal licensure agreements with other states, allowing military experience to count toward licensure requirements, examining how criminal records should or should not preclude an individual from obtaining certain licenses, and consolidating comparable licensing commissions. Many of these potential reforms are recommendations made by the Occupational Licensing Advisory Commission in their 2019 report.

 

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Issue Brief: Occupational Licensing Burdens | Issues