In January, Nebraskans in nearly 200 different occupations needed a government license to do their job, with many workers facing greater barriers to entry than in most other states.Following a legislative session where senators from all parties supported occupational licensing reforms, the number of licensed professions has been reduced slightly, and some licensing requirements have been streamlined. But many of the state’s most burdensome occupational licensing laws still remain stubbornly unchanged or unexamined.
A new report by the Platte Institute provides a review of what happened — and didn’t happen — in the Legislature in 2017 when it comes to reducing licensing red tape that holds Nebraskans back, and what else workers, entrepreneurs, researchers, advocates, and regulators are saying can be done.
The 2017 Occupational Licensing Review is published in an extended version with a full appendix of resources at PlatteInstitute.org/Jobs.
Here are highlights:
• While some regulation will always be needed, Nebraska’s regulatory policies are unnecessarily limiting entry into occupations or industries in a manner that lessens competition. As a result, fewer new jobs and new businesses are being created in Nebraska than in the states that gain the most population and income from relocating Nebraskans.
• Dr. Morris Kleiner, the AFL-CIO Labor Chair at the University of Minnesota writes in one study: “Licenses are required for more and more professions, and that has two major impacts: consumers are overpaying for services, and workers are being pushed out of professions. There are tremendous societal costs with little improvement to service, quality, health, and safety.”
• Workers in Nebraska pay millions of dollars in fees each year to state agencies responsible for overseeing licensure. The Department of Health and Human Services, which administers licensure in over 50 of the nearly 200 licensed professions, collected just over $62 million in fees in fiscal year 2016, though not all the fees are related to licensing.
• The Federal Trade Commission’s Office of Policy Planning, part of the independent federal agency responsible for protecting competition, wrote state senators in March, saying “in effect, excessive licensing acts as a state-created barrier for people seeking work,” and calling for an improved framework for scrutinizing Nebraska’s licensing laws.
• Key licensing reforms that passed in 2017 include repeal of licensure for motor vehicle salespeople, making licensing optional for officers of state-chartered banks, and ending a requirement that audiologists acquire two separate licenses to practice. Also, streamlined requirements for title examiners, school bus drivers, and equine massage therapists were advanced from committee but are not yet scheduled for debate.
• Reform bills that faced the most opposition included LB 343, which would have aligned Nebraska’s training requirements for many personal care licenses with most other states, and LB 299, which would create a regular review process for all occupational licensure. Established industry groups, state licensing boards, and commercial schools and colleges led the charge against the reforms.
• Lawmakers will conduct 8 interim studies on occupational licensing reforms before the year ends, including studies on most of the professions included in LB 343, as well as body art and farm labor contractors.
• With nearly 200 professions requiring licensure in Nebraska, and constant pressure from incumbent industry groups to increase licensing barriers, the state cannot address this problem in a piecemeal fashion. A comprehensive review of all occupational licenses is needed. Legislative Bill 299, the Occupational Board Reform Act, is an example of a comprehensive evaluation to determine which current and future licenses are truly needed to protect the public, or if less restrictive regulatory alternatives may be appropriate.
The Platte Institute advances policies that remove barriers to growth and opportunity in Nebraska.