The U.S. labor market is very resilient despite self-inflicted headwinds in the form of persistently high oil prices and silly tariffs. The latest reading from the Bureau of Labor Statistics notes that unemployment remains at 4.1 percent.
If we dive into state-specific data, we see a dichotomy emerging. States like South Dakota, Vermont, and Hawaii have unemployment rates well below three percent. On the other end of the spectrum, states like California, Oregon, and Washington have an unemployment rate well above five percent.
What can explain these differences? Tax policy and the overall climate for business are obvious contributors. The mix of a state’s industries is also a key factor.
Something that slips under the radar time and time again, however, is the burden of occupational licensing requirements.
Occupational licensing requirements are state laws that make it illegal to begin working a job before meeting state-mandated entry requirements. These requirements include minimum levels of education and training, passing exams, and paying fees to the state.
It is critically important to separate the concept of licensing from regulation itself. Licensing is not the same thing as regulation. Instead, licensing is the most costly and onerous way to regulate.
Continue reading from the Southern California News Group.
Economics of Flourishing
The U.S. labor market is very resilient despite self-inflicted headwinds in the form of persistently high oil prices and silly tariffs. The latest reading from the Bureau of Labor Statistics notes that unemployment remains at 4.1 percent.
If we dive into state-specific data, we see a dichotomy emerging. States like South Dakota, Vermont, and Hawaii have unemployment rates well below three percent. On the other end of the spectrum, states like California, Oregon, and Washington have an unemployment rate well above five percent.
What can explain these differences? Tax policy and the overall climate for business are obvious contributors. The mix of a state’s industries is also a key factor.
Something that slips under the radar time and time again, however, is the burden of occupational licensing requirements.
Occupational licensing requirements are state laws that make it illegal to begin working a job before meeting state-mandated entry requirements. These requirements include minimum levels of education and training, passing exams, and paying fees to the state.
It is critically important to separate the concept of licensing from regulation itself. Licensing is not the same thing as regulation. Instead, licensing is the most costly and onerous way to regulate.
Continue reading from the Southern California News Group.
Edward Timmons
Edward Timmons, PhD, is Vice President of Policy at the Archbridge Institute. He leads the institute's economic policy strategy, identifying focus areas and disseminating work to key stakeholders and policymakers. His own research focuses on labor economics and regulatory policy; he is regularly asked to provide expert testimony to U.S. states on occupational licensing reform and the practice authority of nurse practitioners. Dr. Timmons received his Ph.D. in economics from Lehigh University and his B.A. in economics and actuarial science from Lebanon Valley College. He publishes a weekly newsletter on Substack with the latest research and policy insights surrounding occupational licensing.
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