1.6 million Illinoisans need a government license to work

Needless licensing requirements are killing job opportunities, especially for lower-income Illinoisans.

Occupational licensing is a job requirement imposed by state governments. Without a license, it is illegal to perform many jobs in Illinois.

While Illinoisans might prefer that their doctors and lawyers be licensed, it is much harder to justify licensing requirements for occupations that have little effect on public health and welfare. And many Illinoisans would be surprised to find out that more than 1.6 million workers in the Land of Lincoln need a government license just to be allowed to perform their jobs. Such licensing requirements translate directly into fewer jobs and higher unemployment.

According to research from Morris Kleiner, a scholar with the Brookings Institution, 24.7 percent of Illinois’ workforce is licensed. With a workforce of 6.6 million people, that means 1.6 million Illinoisans need a license just to do their jobs.

The extent of licensing varies by state. In the early 1950s, less than 5 percent of workers needed a state license in order to legally perform their jobs. State licensing has expanded greatly since then. Iowa has the largest portion of its workforce subject to licensure, with 33.3 percent needing a license to do their jobs. On the other end of the spectrum is Rhode Island, where only 14.5 percent of the workforce is licensed. Illinois has 24.7 percent of its workforce licensed, making the Land of Lincoln the 12th-most licensed state as a percentage of workforce. There are only 11 states where a larger portion of the workforce is subject to occupational licensing. That means a lot of Illinoisans are being tripped up by red tape as they try to find a way to provide for their families.

Licensing affects a wide range of occupations that have very different impacts on public health and safety. For example, medical doctors need to be licensed to practice medicine in Illinois, just as in other states. On the other hand, African-style hair braiders need to have a license to work in Illinois, an absurd requirement that blocks people from performing a traditional art. Illinoisans might want their doctors and lawyers licensed, but it’s much harder to justify the same red tape for hair braiders, locksmiths (licensed in only 12 other states), farm labor contractors (licensed in only eight other states), animal control officers (licensed in only 16 other states) and pharmacy technicians (licensed in only 11 other states).

Illinois policy leaders should rethink licensing because these barriers translate directly into fewer jobs and increased unemployment, without improving public health and safety. Research from the Obama White House points out that licensing requirements increase structural unemployment and reduce worker mobility from state to state. The White House research further notes:

[L]icensing may be contributing to a range of challenges facing labor markets, including reduced labor force participation, higher long-term unemployment, and higher part-time employment.

These challenges are all especially difficult in Illinois, where workforce dropout, high unemployment and part-time work are ongoing problems.

Kleiner’s reseach shows that licensing “reduces employment and limits job opportunities, especially for low-income workers.” He puts numbers to the job loss, with his research estimating that licensing reduces total employment by about 7.5 percent of the amount of jobs that are licensed. For Illinois, that would mean licensing is costing the state 120,000 jobs, and that the lost jobs and unrealized income are concentrated in low-income communities.

Illinois should move away from licensing and toward adopting the least restrictive regulations needed to protect public health and safety. Licensing is far more restrictive than alternatives such as government certification, private certification or requiring professional insurance. In some cases, licenses should be repealed altogether.

Illinois faces steep challenges in promoting a healthy, growing labor market. Reducing government meddling would free up thousands of Illinoisans to pursue their chosen occupations. Illinoisans want more plentiful job opportunities, and that can be done by adopting less restrictive regulations. Regulations should protect public safety, but Illinoisans don’t need their hair tangled up in layers of red tape.