Occupational licensing has been receiving a lot of attention recently with Labor Secretary Alexander Acosta calling for state legislators to roll back burdensome licensing requirements. No place is this needed more than in California, the breeding ground of strong unions and stiff occupational licensing requirements.
While occupational licensing is viewed as a way to ensure quality, the ugly truth is that fencing out the competition reduces quality. Consensus is not on the side of the ‘quality’ argument for occupational licenses, only two of 12 major White House studies have found that licensing laws improved quality.
So if quality is not the reason behind occupational licensing then what is? With unionization falling and licensure rising, occupational licenses are replacing the economic hazard of unions. The percentage of unionized workers in the private sector has declined from 35% in the 1950s to 6.7%, while the percentage of workers now licensed has risen from 5% in the 1950s to nearly 30%. Occupational licenses are effectively the new unions.
Occupational licensing requirements have a widespread and deep reach in California. The Golden State ranks 7th in the nation for licensing burden, with a total of 62 low-income occupations licensed and requiring an average of 549 days of education. These licenses have cast a wide net, with one out of every five Californian’s needing to receive permission to work from the government .
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