Hard look at job rules can pull more Illinoisans from poverty
If Illinois used data-driven reviews before imposing job rules, more people could find work and escape poverty.
Poverty’s clearest solution is a full-time job: Nearly 1 in 3 Chicagoans who didn’t work this past year lived in poverty, but only 2.3% of those working full-time were impoverished.
But Illinois gets in the way of people seeking jobs through occupational licensing. There is a way to fix that using data-driven reviews to create the least restrictive rules – or stop unneeded rules – so more people can work.
An occupational license is essentially a government issued-permission slip to work. Even working as a florist or barber is illegal without a license. In 2022, Illinois licensed 41 out of 102 lower-income occupations surveyed by the Institute for Justice.
A different study from the Institute for Justice found 83% of proposed regulations are initiated by occupational lobbies for their own or related occupations, and 76% of the time they ask for the most restrictive form of regulation: the creation of a new or distinct license. The motivation is not to protect public health and safety. Occupational lobbies want to restrict entry into their professions, artificially shoring up job security and boosting wages via scarcity. That’s unfair to the 313,000 Illinoisans who are unemployed.
One way Illinois can prevent these unnecessary occupational licensing laws from being enacted is to adopt sunrise reviews. The Council of State Governments defines a sunrise review as a “specific, data-informed analysis completed before proposed regulations are considered by a state legislature.” The purpose of the review is to recommend the least restrictive regulation necessary. Illinois does not currently have a sunrise review process.
Without a formal mechanism in place to thoroughly evaluate proposed occupational licensing regulations, it is much easier for new and unnecessary regulations to be enacted.
Piling on regulations creates harms felt by all Illinois residents. According to Matthew D. Mitchell at the Mercatus Center, “Because many licensed professionals offer products or services that are bought by low-income individuals, licensing laws hit the poor twice – once in the form of limiting job opportunities and then again in the form of higher prices.” Excessively licensing these occupations makes it more difficult for Illinoisans to move from poverty to prosperity.
Data also shows sunrise reviews to be incredibly effective at weeding out unnecessary regulations. Across 15 states that had sunrise reviews in 2017, 80% of the sunrise reviews conducted declined to recommend new or distinct licensure, while 54% recommended no new regulation.
Continuing to pile on regulations hurts job prospects and the top solution to poverty in Illinois. When people in poverty try to lift themselves out, government restrictions stop them. Sunrise reviews assess these regulations to ensure they are minimally restrictive. Illinois should use sunrise reviews to help its people help themselves out of poverty.