While inflation continues to ebb, many Americans are still reeling from a once-in-a-generation shock to their pocketbooks, and polls show that the cost of living remains a concern of voters.
Many families might benefit from relocating to a different state with more affordable housing or better job prospects. Indeed, the urge to pull up stakes and move in search of better economic opportunity is quintessentially American. Yet, only some actually do.
A little-noticed fact is that internal migration in the United States has plummeted over the last 50 years. In the 1970s, about 17% of U.S. families moved in any given year; today, it’s less than 10%.
One factor stands out: A sharp increase in government regulations preventing workers from moving easily across state lines. During the mid-20th century, only 5% of workers needed an occupational license — and these regulations were concentrated in a few industries, like healthcare and law.
Today, about one in five American workers is directly affected by occupational regulation. More than 340 occupations are licensed in at least one state, ranging from wrestling promoters and auctioneers to animal breeders and funeral directors.
The need to protect the public’s health and safety is usually offered as the justification for these policies. Still, there’s little evidence that licensing consistently improves the quality of services.
To make matters worse, occupational licenses are rarely portable. Since individual states control their licensing rules, workers seeking to relocate often face inconsistent requirements, expensive fees and administrative obstacles. In New York, for example, barbers must receive 291 hours of training for licensure. In neighboring Connecticut, a barber must complete 1,000 hours of training.
Happily, policymakers have begun tackling this problem. Some states have adopted universal recognition policies that eliminate some of the barriers to acquiring a license in a different state. These laws require licensing boards to recognize out-of-state licenses as long as the worker is in good standing in their home state and subject to some requirements. Several states also recognize work experience in cases where an applicant comes from a jurisdiction that does not regulate a licensed occupation in the state.
Today, 26 states have passed some version of universal recognition, and efforts are underway in many state capitals to expand and improve these reforms.
Universal recognition works: States that have embraced the policy are issuing more licenses to newcomers and have seen higher rates of in-migration, more tax revenues and increases in labor market activity among workers in licensed occupations.
As we near another acrimonious election, we should all want to promote opportunities for American workers. Universal recognition is a great way to start.
Liam Sigaud is a research analyst at the Knee Regulatory Research Center at West Virginia University’s John Chambers College of Business and Economics./InsideSources
