Idaho's Licensing Reforms Could be a Blueprint for The Nation

Governors across the nation can look to Idaho’s chief executive for a lesson in leadership. Just months after a report found that Idaho has the fourth-highest number of licensees in the nation, Governor Brad Little did the right thing: He took dramatic steps to pare these excesses back. His first executive order, signed January 31, will begin the process for eliminating unnecessary licenses — which do little to protect the public and lots to kill jobs.

Nearly one out of every four Idahoans has to get a government permission slip before they can work. The state still has licensing regulations on the book for everyone from florists to physical therapists, makeup artists to massage therapists, even with a growing national trend to eliminate licenses. But licensing is costing the state big time — by one estimate, the state lost nearly one billion dollars out of the $72 billion statewide economy.

But Idaho isn’t the only state facing such costs. In the 1950’s, just one in 20 Americans had to get a license to work. Today, that number is one in five nationwide. The costs of these licenses exceed $184 billion each year in lost economic output.

And the licensing issue doesn’t belong to one party. It hasn’t mattered whether the population of the state is liberal or conservative, growing or shrinking, rural or urban. Hawaii and Wyoming have some of the most licenses while Kansas and California have some of the least.

Idaho is a booming state, but it has become abundantly clear that occupational licenses hinder further growth. Jobs that have the heaviest licensing requirements are the jobs with the greatest worker shortages. For instance, there aren’t enough trade workers to keep up with the influx of residents and demand for new construction. And there aren’t enough medical professionals —nurses, physicians, dentists, or others—to match the population, particularly in rural areas.

But the past year has seen some rapid change. After all, Idaho’s newly-elected governor made occupational licensing reform a central piece of his candidacy. The state legislature, too, established a separate committee to review certification and licensing laws, developing strong recommendations for reform. News organizations have begun sharing stories of the day-to-day effects that occupational licensing has on the state’s industries.

This whole process was first set into motion in May of 2017, when Little signed an executive order as lieutenant governor, requiring all state agencies to review their licensing requirements and produce a report detailing the findings.

Legislators and other groups have since used the information collected in these reports to craft reform proposals. So far, there are proposals to enhance reciprocal licensure, to make it easier for veterans and military spouses to obtain licenses, and for a Right to Earn a Living Act — modeled after Arizona’s law allowing people to sue licensing boards which unduly limit entry to professions. Of the dozens of bills which have been introduced in this 2019 legislative session by licensing boards, almost all are taking steps to deregulate the profession.

Many states only have working groups and committees that signal reform but don’t take steps to bring it about. But Idaho has actually moved straight to reform. Armed with the information gathered over the last year, elected officials are ready to tackle the issue head-on, rather than treading lightly around the perimeter.

To be clear, there’s still entrenched opposition to change. Trade associations, licensing boards, and many licensees are threatened by the changes that are on the horizon. A proposal to eliminate barriers to dental care by allowing dental therapists to work in the state has been decried by some as a threat to public health and safety. Licensing boards under threat have made noise about losing the authority to oversee their industries. Yet, the momentum for reform is finally overpowering the inertia of the incumbents.

Ultimately, Idaho is making giant and quick steps toward a freer marketplace and a happier populace. Other states would do well to follow its example.

Phil Haunschild is a senior policy analyst at the Idaho Freedom Foundation and a contributor for Young Voices.