CSG Launches New Occupational Licensing Website

With the number of jobs requiring an occupational license at an all-time high, The Council of State Governments (CSG), the National Conference of State Legislatures (NCSL), and the National Governors Association (NGA) have come together to assist states in improving their understanding of occupational licensure issues and enhancing licensure portability.

Currently, the number of jobs requiring an occupational license is nearly one in four. While state licensing is important for developing a trained workforce and protecting public safety, disparities in requirements between states makes it harder for people to enter these fields, and at times can prevent individuals from continuing their careers after moving across state lines. These disparities often affect certain populations more than others, such as military spouses and families, unemployed and dislocated workers, immigrants with work authorization, and people with criminal records.

To address these issues, CSG, NCSL and NGA work directly with state officials to review existing licensing requirements and ensure that criteria do not create unnecessary barriers to individuals wanting to enter the labor market. Consortium states also compare their own legislation with that of other states to improve reciprocity provisions and portability for selected occupations.

During the first phase of this project, the 11 states in the consortium—Arkansas, Colorado, Connecticut, Delaware, Illinois, Indiana, Kentucky, Maryland, Nevada, Utah and Wisconsin—have been working to improve their states’ policies and have benefitted from multi-state team meetings, state-specific technical assistance, in-state learning consortium meetings, and support from all three national organizations for state action plan development and implementation.

As part of this ongoing project, the occupational licensure team at CSG launched a new website that pulls together CSG’s expertise on the issue as well as news and current events such as seminars, passed legislation, and working initiatives.

The new website will serve as a resource for policymakers who want to learn more about licensure portability and connect them with tools that they can use in their own states. State officials will be able to access the project database, developed in partnership with NCSL, which provides extensive information on licensing requirements for 34 professions across all 50 states and the District of Columbia. In addition to the database, the site will provide information on the Occupational Licensing Policy Learning Consortium and project reports on the current state of licensure, suggested best practices, and disproportionately affected populations.

The website also contains resources regarding interstate compacts. CSG’s National Center for Interstate Compacts (NCIC) is the nation’s only information clearinghouse and technical assistance expert on interstate compact development. Increasingly, states are turning toward compacts to solve licensure portability issues. A compact creates a legally binding relationship between compact participants so that licensed practitioners can practice in multiple states.

As the project continues, participating states will continue to benefit from this network of professionals, fellow policymakers, and researchers as they work to strengthen the workforce of licensed professionals in their states.

Occupational Licensing Consortium Convenes Second National Meeting

On November 28-30, the states a part of the occupational licensing policy learning consortium convened for the second annual meeting in Clearwater, Florida. The state teams had the opportunity to focus on four population groups who are disproportionately affected by licensure—individuals with criminal records, veterans and military spouses, dislocated workers and immigrants with work authorization. License portability, reciprocity, and interstate compacts were also major topics. States had the opportunity to connect with and learn from fellow consortium states, as well as hear from states outside of the consortium that have taken action on occupational licensure including Nebraska and Michigan. 

New funding allowed for four new states to participate in this year’s consortium meeting. Idaho, New Hampshire, North Dakota, and Vermont formed state teams made up of legislators, regulatory agencies, and governor’s staff and joined the original 11 states in Clearwater to begin action planning their licensure reform. These states who recently came aboard the project will be part of the consortium going forward.

CSG was also able to expand existing state teams to include more regulatory board members. Licensure reform is a challenging policy area with many competing interests. Bringing together all stakeholders is something CSG wanted to accomplish as a part of this effort. Pursuing licensure reform without input from the licensure boards is not something states have had much success with. In order to engage more regulatory agencies, CSG used additional funding to expand state teams to include these key stakeholders.

The focus on particular reforms from the consortium states as discussed at the meeting ranges widely from sunrise/sunset review, interstate compacts, communications/marketing plans, board consolidation, data collection/standardization, and laws for military families.

One additional point of discussion for the state teams was developing a transition plan for states with outgoing governors and legislators. With state teams being made up heavily of legislators and governor staff, some teams are needing to come up with a plan maintain momentum once these new state leaders take office. The partners at CSG, NCSL, and NGA have committed to developing a transitional memo that states can request which will explain the project and ask for support from the newly elected official.  

The consortium will formally meet one more time in the summer of 2019, but the project partners hope this is just the beginning of state occupational licensing reform.

Vermont Deputy Secretary of State Chris Winters said, “This was the best conference I’ve ever been a part of. I was so glad to be able to contribute, and was also really proud of my Vermont team and their focus. This conference has energized them.”

Each consortium state has accomplished things throughout this project, but the latest consortium meeting in Clearwater was a great time for states to reset focus, refine vision, and energize to pursue common sense licensure reform.

States Explore Occupational Licensure Reform

The consortium of states participating in the U.S. Department of Labor’s Occupational Licensing: Assessing State Policy and Practice project recently began their second round of project meetings to discuss occupational license reform. The 11 states–Arkansas, Colorado, Connecticut, Delaware, Illinois, Indiana, Kentucky, Maryland, Nevada, Utah and Wisconsin–are individually meeting to further review their licensure process, engage with policy experts and develop action plans. The state team meetings will culminate this year in the project’s second multistate learning consortium summit to be held Nov. 28-30 in Clearwater, Florida.

The Council of State Governments, along with its project partners the National Conference of State Legislators and the National Governors Association, continues to deliver technical assistance to the states during the project by facilitating meetings, issuing policy reports and collecting state licensing data. The partners recently published four reports that focus on the unique challenges and barriers specific to immigrants with work authorizationpeople with criminal recordslow-income, unemployed & dislocated workers; and veterans and military spouses.

The following is an update on the progress some of the states have made during the second round of meetings.

Kentucky

The Kentucky team’s meeting on Sept. 19 provided the group an opportunity to learn about the differences in state regulatory board structures as well as discuss opportunities for further research including sunrise/sunset review legislation.

“Occupational licensure is a topic that really encompasses a multitude of policy areas including workforce and economic development and veterans’ affairs,” said Brian Houillion, chief of staff and executive director of financial management and administration for the Kentucky Department for Local Government. “The goal is to take a look at what regulatory framework will best serve the needs of the state. For example, during the meeting we explored the different types of state regulatory board structures as part of our ongoing conversation on finding ways to improve our licensure board system.”

Kentucky was also recently awarded an additional $450,000 Department of Labor grant to further help improve the licensure process in the state.

“The grant allowed us to bring on a grant and project administrator to better facilitate the process of licensing reform,” said Houillion. “The additional staff will assist the state’s project team to complete the smaller steps that occur between meetings and stay on objective.”

Utah

During Utah’s Sept. 21 project meeting, the team learned from policy experts about competency-based testing, improving the processes of sunrise/sunset provisions, and licensure burdens specific to immigrants.

Utah state Sen. Todd Weiler, who is a member the state’s Occupational and Professional Licensure Review Committee, said the meeting was a continuation of the team “doing its due diligence by taking deep dives into policy areas and learning from the experts.” He added that one of the team’s primary purposes was to “do the laboring work before the Legislature considers additional reform.”

“Utah is in a transition state as it moves from an older model to a more up to date approach,” he added. “The project team is answering the questions about the health and safety objectives to be achieved through licensure and how to step away from the turf battle of professions and focus on how the customer is best served. The pendulum has swung to decrease regulation wherever it makes sense.”

Utah enacted a number of occupational licensure reform legislation last year that focused on improving licensure mobility, reducing regulation and assisting relocating military families. 

Maryland

Maryland’s Sept. 25 project team meeting centered on ways to expand licensure portability and improve stakeholder messaging. Victoria Wilkins, commissioner of the Division of Occupational and Professional Licensing at the Maryland Department of Labor, Licensing and Regulation commented on the importance of improving the state’s licensure process through the project.

“Anything that decreases regulations to get more people employed while still maintaining public health and safety is something we want to explore,” she said. “The project allows us to hold cross sectional learning meetings with a variety of stakeholders to improve the conversation about licensure.”

The state team is organized in a committee-based structure, which divides the group’s focus areas into the categories: identifying barriers, business needs, community relations, data and research, and addressing the “low hanging fruit” of licensure reform. Wilkins said the “low-hanging fruit” committee could, for example, address some licensure issues outside of the state’s legislative sessions.

“The Legislature only meets once a year, so the committee was established to identify what are some of the simpler changes that could be made in the meantime,” she said. “For instance, the passing score thresholds for plumber licensing exams were recently revised to bring them into uniformity with Maryland’s other licenses.”

The meeting’s guest speaker was Karen Goldman, attorney advisor for the Office of Policy Planning at the Federal Trade Commission, who presented her recently completed FTC policy report on licensure mobility. In the report, Goldman highlighted the important role that CSG’s National Center for Interstate Compacts serves when it comes to how states deal with structuring reciprocity. 

CSG National Conference

The Council of State Governments is providing additional opportunities for states to engage with policy experts and advance the conversation on occupational licensure reform during its annual National Conference, to be held in Greater Cincinnati-Northern Kentucky, Dec. 5-8. The conference will include multiple sessions to foster learning about licensure reciprocity through state compacts, lessons from military members and spouses state licensing policies, and specific case studies of how certain professions have handled reciprocity.

To find out more information about the conference, including how to register, please visit https://www.csg.org/2018nationalconference/Agenda18.aspx

New Occupational Licensing Analysis Opposes Traditional Theory

A commonly cited argument for occupational licensing reform states that licensing results in restricted employment growth and higher wages for licensed workers, which in turn increases consumer costs. Higher wages benefit licensed workers, but wage disparity leads to inefficiency and unfairness, including reducing employment opportunities and depressing wages for excluded workers.

However, CSG’s analysis of data from the Bureau of Labor Statistics (BLS) finds no evidence that licensing has any effect at all on wages and employment growth for electricians and massage therapists. Using original CSG time-series licensing data along with occupational employment data from BLS’ Occupational Employment Statistics (OES) program, this analysis compares wage trends before and after licensure, to a control state that does not license the occupation at all. Plotting wages for the licensed state and the control state, with hourly median wages on the vertical axis and year on the horizontal axis, while drawing a vertical line at the year of initial licensure shows any potential licensing effect. Deviations from wage trends prior to licensure can be attributed to licensing if the effect is similar across several state comparisons.

(SEE ATTACHMENT FOR PLOTTED DATA)

When comparing the time series data plotted for licensed and non-licensed states, there is no evidence that these occupations becoming licensed has an effect on wages and employment. The result is most convincing for electricians. When looking at the plotted time series data, the trend lines barely changes at all upon initial licensure. If a licensing effect did exist, we would expect the line to trend upward for wages and downward for employment after a state licenses electricians.  However, when comparing with the control states that do not license, the trend lines hardly deviates at all upon initial licensure. This result is consistent across all three sets of state comparisons.

The result seems to hold even for an occupation within an entirely different industry. The trend lines for massage therapists are more erratic, but still do not seem to support a possible licensing effect. There must be other effects at work causing the wage and employment lines to shift, but these shifts do not occur in sync with the treatment state adopting a license requirement.

If most economists agree with the assumption that occupational licensing increases wages for licensed workers and decreases what are some possible explanations for this result? It may be the case that a licensing effect takes many years to be seen. The increase in wages and decrease in employment growth could be a slow, gradual process over the course of many years that eventually restricts entrants into the profession, but does not do so initially.

Secondly perhaps the licensing requirements adopted are not severe enough to deter an aspiring practitioner from entering the occupation.

Electricians

StatesExperienceNo. Of
Exams
Length of
Renewal
Continuing
Education
Initial
Cost
Renewal
Cost
Iowa16000, h13187575
Kentucky4, y11615050
Massachusetts8000, h1345330104

Massage Therapists

StatesTraining
Hours
No. Of
Exams
Length of
Renewal
Continuing
Education
Initial
Cost
Renewal
Cost
Illinois600124837087.5
Michigan5001354290115
Nebraska10001224322127

The above tables from CSG, NCSL, and NGA’s Occupational Licensing Database outline the licensing requirements for electricians and massage therapist in each treatment state where a license was adopted. Based on previous literature, if a licensing effect did exist for these occupations, you would expect the effect to be even more noticeable in the graphs for Nebraska and Iowa. The training and experience requirements for these two states are double the requirements for the other states who also recently adopted a license, yet the trend lines do not suggest that a more severe licensing effect exists.

This result is important to policy makers who are looking for new ways to grow their state’s economy. Occupational licensing reform has been a workforce priority of the two most recent presidential administrations with President Obama’s administration releasing a 76-page policy framework for state officials, and the Trump administration awarding large grants to enhance state occupational licensing portability of which CSG was a co-recipient.

Enhancing portability of state licensing and creating more a more equitable system for vulnerable populations like veterans and military families, people with criminal records, immigrants, and long-term unemployed workers is a crucial need. However, it is not clear from this evidence that deregulation will have the economic impacts that some believe.

If the result of a state adopting a license for certain occupations is negligible for these economic indicators, perhaps policymakers should focus their efforts on things other than deregulation when figuring out how to grow their state economies. Some argue that removing these licensing barriers will result in an influx of new practitioners into the occupation which will stimulate job growth. The evidence from CSG’s analysis does not show that this would be the case. If an occupation becoming licensed does not affect wages or employment, then deregulating an occupation likely won’t affect these outcomes either.

Plotted BLS Data

CSG Launches National Occupational Licensing Database

By Kathryn Price

CSG, in partnership with the National Conference of State Legislatures and the National Governor’s Association, released the National Occupational Licensing Database to help state leaders better understand the national licensing landscape. This database contains information on the criteria required to attain a license in 34 occupations with 18 requirements being assessed. Some of the data points include initial and continuing education requirements, training, experience, exams and fees. Additionally, if a certain occupation is selected, a map of the states that require licensure will be produced (See top image below for map produced when searching the database for information on electricians). The database also allows for the user to make comparisons between states and occupations (See bottom image below for an excerpt of search results from the database when selecting to show information on cosmetologists).

The database gives the user the ability to see all the requirements across 50 states and shows the disparities between each state. These differences can create barriers for those moving across state lines as well as those attempting to gain initial licensure.

The licensing process is designed to ensure the safety of workers and the public by requiring a certain level of competency to practice a profession. However, some licenses can have excessive requirements and fees, which may be insurmountable for some. For example, home inspectors in New Jersey face an initial licensure fee of $850 along with a $500 fee every two years to renew. Whereas, those in Pennsylvania pay $225 initially and the license doesn’t expire. Four groups who are particularly vulnerable when it comes to gaining licensure are immigrants with work authorization, those with criminal records, military families, and unemployed and dislocated workers.

This database is the first step in a project aimed at understanding and reducing these barriers to licensure as well as learn best practices for licensing certain occupations. The three-year project, entitled Occupational Licensing: Assessing State Policy and Practice, is a joint effort by The Council of State Governments, the National Conference of State Legislatures, and the National Governors Association Center for Best Practices, and is funded by a grant from the U.S. Department of Labor.

The project also selected a consortium of 11 states that will meet with licensure experts to discuss each state’s current licensure practices, and develop and implement action plans that aim to remove excessive barriers created by some licenses. The states in the consortium are Arkansas, Colorado, Connecticut, Delaware, Illinois, Indiana, Kentucky, Maryland, Nevada, Utah, and Wisconsin.

The first consortium meeting was held in December of last year in Tucson, Arizona, with two more meetings slated for fall 2018 and summer 2019. In addition to these meetings, the project will produce continuing resources, namely a webinar series, blogs, newsletters and magazine article on occupational licensure policy.

The map produced when searching the database for information on electricians shows that 19 states do not require licensure.