In the United States, one in every four workers is required to obtain a permission slip from the government before they are allowed to work.
Anyone who has applied for an occupational license can tell you how frustrating it is: You’re forced to jump through hoops for a piece of government-issued paper that determines your well-being. What makes this process doubly frustrating and unfair is discovering who is approving and rejecting occupational licensing applications—information revealed in a new Pacific Legal Foundation report.
Behind every faceless, inanimate license stands a group of gatekeepers—licensing boards that stand between you and your work.
These public boards are not comprised of neutral parties looking out for the best interest of their communities. Instead, boards across the United States are controlled by private associations in the very industries the boards are tasked with regulating. In dozens of states, associations are handpicking board candidates—and some states legally require governors to choose board members from lists compiled by incumbent special interests.
This is protectionism at its finest. Those who sit on the boards represent private companies that have a vested interest in blocking new competition from entering the market and encroaching on their turf.
But it’s not just the protectionism aspect of these licensing boards that is concerning. The Constitution’s promise of separation of powers delegates lawmaking authority to the legislative branch. Rulemaking does not constitutionally belong in the hands of these licensing boards.
Free from having to be elected by the public, there is often no accountability for any of their actions, since they cannot be fired or voted out. Worse still, these bodies violate a Supreme Court ruling.
In a 2015 decision, North Carolina State Board of Dental Examiners v. Federal Trade Commission, the Supreme Court of the United States found that requiring a majority of the board members to be “active market participants” creates a conflict of interest that equates to anticompetitive behavior by the state government and that is actionable in a court of law.
Individuals should not be prevented from earning a living so these gatekeepers can shield themselves from new competition.
Our new report on licensing boards illustrates the scope of the problem across 50 states for 17 occupations that are governed by a licensing board. People affected include cosmetologists—who are required to be licensed in all 50 states—as well as dentists, barbers, funeral directors, and accountants. Twenty-three states effectively hand over the power of nominating licensing board members to a trade association for at least one board.
There are 96 specific instances across all 50 states in which the license would be issued and regulated by a board at least partly hand-picked by special interests.
How bad is the problem in your state? Take a look at the graphic below and read the full report here.