During the first presidential debate, Donald Trump missed out on the perfect opportunity to address a giant problem stifling American prosperity.
A rising number of Americans are unable to start working without first getting a costly government license. These licenses, commonly known as “occupational licenses,” shield license-necessary jobs from competition and reduce worker mobility. Occupational licensing has become such a problem for American workers that it has led to calls for reform from both Republicans and Democrats – including Hillary Clinton. Yet throughout his campaign, Trump has not said a word on the matter.
In a new paper on the effects of occupational licensing from the Brookings Institution, Ryan Nunn writes, “Lower wages and higher unemployment rates for unlicensed workers, as well as reduced migration rates for those with licenses, all suggest that the social costs of licensing are larger than many have previously believed.”
A contributing factor to the growing “social costs of licensing” involves the costs that aspiring professionals must bear to get a license. A study from the Institute for Justice examined 102 low- and median-income occupations requiring occupational licenses and found that on average, workers pay about $209 in fees and are required to undergo approximately nine months of training.
These onerous fees and mandatory training periods effectively raise the cost of entering a profession. For poor Americans holding multiple low-wage jobs, struggling to pay their basic expenses, these mandatory costs diminish their chances of economic mobility. And while occupational licenses for professionals such as health care providers and nuclear power plant technicians are understandable given concerns for consumer and public safety, many states require their residents to hold licenses to be pre-school teachers, cosmetologists, masseuses, and even hair-braiders.
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