The right to work: Too many Nevada occupational licensing laws restrict competition

Not all occupation licensing laws on the books in Carson City actually protect Nevada consumers from harm and shoddy workmanship. It's pretty clear that many of these laws misuse state sanctions to protect existing businesses from unwanted competition.

Now a new study by the Washington-based Institute for Justice can help Nevada lawmakers decide which of these laws actually serve the public and which should go.

The report, "License to Work: A National Study of Burdens from Occupational Licensing," examines licensing practices for 102 lower-wage occupations in all 50 states. If you want to work in one of the 55 occupations licensed in Nevada, you may need to meet a minimum age requirement, demonstrate a certain level of often irrelevant experience and training, pass an exam that may have little to do with your job and pay a licensing fee.

Some licensing requirements make sense. But of the 102 occupations reviewed, only seven - cosmetologist, pest control applicator, school bus driver, city bus driver, emergency medical technician, truck driver and vegetation pesticide handler - are regulated in Nevada and all other states.

Beyond this handful of occupations with widely recognized public health and safety issues, the report questions the motives for licensing many others. "Occupational practitioners," the authors write, "often through professional associations, use the power of concentrated interests to lobby state legislators for protection from competition through licensing laws. Such anti-competitive motives are typically masked by appeals to protecting public health and safety, no matter how facially absurd."

There are three ways to sort out the occupations that need state oversight from those in which regulations serve no compelling public purpose.

First, if consumers in more than one half of the states get along just fine without regulating the workers in an occupation, there is a good chance Nevada's licensing requirements are not necessary. In this category we find the following occupations licensed in Nevada and a small number of other states: interior designer, sign language interpreter, bartender, locksmith, animal trainer, landscape contractor, travel agent, gaming dealer, gaming cage worker and optician. Licensing such trades is both unnecessary and foolish.

Next, if the licensing requirements in Nevada are a lot stiffer than those in use in other states, there is a good chance Nevada's requirements serve mainly to protect existing businesses from competition rather than to protect consumers. For example, in Nevada, to become an alarm installer costs $1,036 while the national average is $230. And it takes six years of experience and training to become an interior designer in Nevada, but 47 other states don't even license the occupation.

Lastly, if licensing requirements have little to do with protecting the health and safety of Nevada consumers or workmanship quality, chances are they have a lot to do with protecting existing businesses from competition. In Nevada these occupations might include: sheet metal contractor; terrazzo contractor; floor sander contractor; drywall installation contractor and glazier contractor.

For those occupations that do not clearly present an obvious need for the state to protect the health and safety of Nevadans, the report identifies private-sector alternatives to state oversight.

One option is voluntary certification through professional associations. This allows practitioners to distinguish themselves but also allows consumers to decide for themselves how much value to place on such credentials. The National Institute for Automotive Service Excellence, for example, presently confers its ASE certificate on about 350,000 mechanics.

In addition, instead of state sanctions, third-party consumer organizations such as the Better Business Bureau and Angie's List hold occupational practitioners accountable for the quality of their goods and services.

The report ends with this advice for state policymakers. "When reviewing current or proposed licensing laws, policymakers should demand proof that there is a clear, likely and well-established danger to the public from unlicensed practice. Forcing would-be workers to take unnecessary classes, engage in lengthy apprenticeships, pass irrelevant exams or clear needless hurdles does nothing to ensure public safety."

Ronald Fraser writes on public policy issues for the DKT Liberty Project, a Washington, D.C.-based civil liberties organization. Write him at: fraserr@erols.com.