Overhaul Iowa's licensing system

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A bill to reform professional licensing was killed in dramatic fashion in the Iowa House this week.

Rep. Bobby Kaufmann, R-Wilton, literally tore his copy of the bill into pieces during a hearing on House Study Bill 138. The bill, proposed by Gov. Terry Branstad, would have decreased regulatory burdens for several professions in Iowa, including dietitians, athletic trainers, and teeth-whitening specialists.

Kaufmann’s response suggests this particular bill will not be taken up by the Republican majority this year. But Iowa still needs to have a serious conversation on the burden of professional licensure.

Iowa requires licenses for more jobs than almost any other state.

The Institute for Justice’s “License to Work” project provides a state-by-state analysis of professional licensing regulations. They compared two factors — how many occupations require licensure, and how onerous those requirements are in terms of cost and time.

Iowa got kudos for relatively low licensing costs and time requirements. However, we got dinged for the huge number of jobs that require licensing — among the low- and middle-income occupations the group studied, only six other states require licensing for more occupations.

For example, travel agents, sign language interpreters, and taxi drivers all must obtain state licenses in order to work legally in Iowa. Most other states don’t require licenses for those jobs, according to the Institute for Justice report, yet those states don’t suffer from widespread malpractice in those fields.

I believe free exchange between consenting adults is a fundamental human right. Government may have a legitimate duty to protect us from fraud and abuse, but modern licensing regulations have far outgrown that role.

A common defense of occupational licensing is that it protects public safety or promotes professional conduct. But then why aren’t waiters and cooks licensed? Why not TV anchors, radio disc jockeys, and newspaper reporters? Bicycle repair technicians? Kitchen appliance salespeople?

In reality, each and every worker we interact with in our daily lives has some impact on our general wellness, but that doesn’t mean state licensing is the most effective way to protect consumers.

What worries me is that professional licensing is a massive barrier to entrepreneurship. Only people who can afford licensing fees and government-approved training are allowed to do business. What’s more, the boards charged with overseeing licensed professions are stacked with industry insiders, casting serious doubt over their ability to investigate complaints. The Iowa Ombudsman highlighted several such concerns in a report published this week.

Predictably, the leading opponents of licensing reform are the professionals who already have state licenses. Dozens of paid lobbyists representing those industries filed their opposition to the Branstad bill that was nixed this week. Licensed professionals support higher barriers to entry in their fields because it undercuts their would-be competitors.

It’s textbook economic protectionism.

Business regulations like these hang heaviest on poor Iowans. People living in poverty are often exceedingly resourceful and industrious, but coming up with money for fees or setting aside months for training are not realistic options.

Sadly, there is a simple reason why licensing reform is politically difficult — the workers who benefit from it now are well-organized and well-funded enough to influence public policy. The would-be entrepreneurs who stand to benefit from reform are not.

• Adam Sullivan’s column appears on Fridays. Comments: Sullivan.AB@gmail.com; adam4liberty.com

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