July | August 2017


 

 

 

 

 

 

Washington State’s Innovative Alternative to Occupational Licensing

By Elizabeth Whitehouse, director of education and workforce,
and Matt Shafer, Graduate Fellow
Imagine a scenario where two immigrants move to the United States to pursue new careers. One is a manicurist and the other is an engineer. Upon arriving to their new home in Washington, the engineer passes an exam and is immediately eligible to obtain employment. On the other hand, the manicurist begins a long and arduous process that requires 600 hours of training and thousands of dollars to receive a license allowing them work a job they already have the skills to do.   
This was the story told in the Washington State Legislature’s House Business and Financial Services Committee by a cosmetology school administrator testifying in support of legislation to remove occupational licensing requirements for several professions.
“Lobbyists from special interest groups convince individual legislators that licensing requirements are done for safety and consumer protection and it almost never is,” said state Rep. Matt Manweller in The (Washington) Lens. “It is designed to make sure outsiders cannot compete with the insiders.”
Manweller, House Bill 1361 sponsor, received research and design assistance from Todd Myers, director of the Center for the Environment at the Washington Policy Center, while drafting the bill. According to Myers, it is well known that certain occupational licenses are simply egregious and inappropriate for the jobs they deal with in Washington state. He also expressed concern that the primary purpose of many occupational licenses is to make it difficult to enter the industry rather than ensuring health and safety.
While conducting research for the bill, Myers spoke with landscape architects about complaints received over the past 10 years regarding safety or poor standards. He found 16 instances that required a worker to appear before a licensing board. Of those 16 instances, 15 were violations for operating without a license and only one was for malfeasance, which was settled without a fine. According to the interviewed landscape architects, in the past 10 years there were zero cases where the licensing board went after landscape architects for violations beyond operating without a license.
“If you are going to argue that zero landscape architects in the state made any mistakes in the last 10 years, I just don’t believe you,” Myers said. “So when these licensing advocates say they want to maintain standards, what they really want is to cut out a lot of competition and set very high barriers for becoming a landscape architect so they can keep their prices high.”
HB 1361 aims to replace the licensing structure with an online rating system similar to services like Yelp, Uber and Lyft. The occupations targeted for de-licensing are animal massage, auctioneer, boxing announcer, fishing guide, landscape architect, manicurist and horse floater. According to Myers, these professions involve little to no public health concerns and switching to a public feedback platform for information rather than a required license makes sense.
“My experience with occupational licensure in the context of license portability is that it is important to understand that there is a need for practitioners of a particular discipline to be subject to licensure if there is a realistic risk to public safety,” said  Rick Masters, special counsel to The Council of State Governments’ National Center for Interstate Compacts.
Masters gave the U.S. Supreme Court case North Carolina State Board of Dentistry v. Federal Trade Commission as an example, which recognized that it is a legitimate public policy for an occupational licensure board to call upon its licensees "to follow high ethical standards, honesty, compassion, kindness, integrity, fairness and charity.” 
In the bill introduced by Manweller, the focus was on providing an online licensing structure. Before the internet age, government oversight through licensing was one of the only ways consumers could get information about professionals providing the services they received. That is no longer the case. In fact, there are numerous avenues such as Yelp or Angie’s List, where customers can review restaurants, cosmetologists and lawn care professionals among other service providers.
“These sites are the number one place people turn to when they want information,” Myers said. “Now we are in a situation where the licenses are not only egregious but we also have an opportunity to use another system in a way in which we haven’t before. It’s time we come into the iPhone era.”
The online portal would give consumers the power to rate and comment on a professional’s performance, and serve as a guiding hand in the market to determine the most skilled, best performing workers. Proponents of the online portal contend that it would create a simple way for the public to provide feedback and create information sharing among consumers, addressing public interest concerns without imposing barriers to enter a profession.
Proponents of increased market transparency and options feel that opening markets to increased levels of competition benefits states and consumers through lower unemployment and lower prices.
Despite Myers and Manweller’s efforts, HB 1361 did not pass the House Business and Financial Services Committee in 2017, but will be reintroduced in the next legislative session. De-licensing of professions has been extremely rare in the United States over the past 40 years. According to The Bureau of Labor Statistics, there are only eight instances in which occupations were de-licensed at the state level. However, Myers said he remains optimistic about the future equity of licensing in Washington as their legislation continues to gain bipartisan support.
HB 1361 is an innovative concept for occupational licensing and oversight. Lawmakers calling for licensing reform can use this bill as one example of an approach to  reduce occupational entry barriers.
CSG members prioritized occupational licensing as a top-5 issue in workforce development for 2017. CSG, in partnership with the National Conference of State Legislators and the National Governors Association, was recently awarded a $7.5 million grant from the U.S. Department of Labor to guide 10 states in improving licensure portability across state borders. The action plan prioritizes immigrants, military families, individuals with criminal records and dislocated workers as a part of the targeted populations in need of greater licensure opportunities.
CSG’s National Center for Interstate Compacts has worked with states over the last several years to create and implement new interstate agreements facilitating occupational license reciprocity and portability, such as the Interstate Medical Licensure Compact, the Physical Therapy Licensure Compact and the Recognition of EMS Personnel Licensure Interstate Compact.