February 16, 2016 Print

Occupational licensing laws almost universally serve to protect entrenched and politically connected interests at the expense of newcomers who may be perfectly qualified to provide a service that paying customers demand. In Ohio, Atlas Network partner The Buckeye Institute has thoroughly documented the destructive effects of occupational licensing, and its efforts are leading to policy victory. The Ohio Senate has voted unanimously to eliminate one such licensing law for cosmetologists in the state.

“The Ohio Senate voted 32-0 this afternoon to unanimously eliminate a pointless and costly occupational license that forced cosmetologists to get a special state license to get promoted to store manager,” The Buckeye Institute explained in a press release distributed on Feb. 10. “The reform had been stalled for years because of opposition from private cosmetology schools, which sell training for the licenses.”

In a November 2015 study, “Forbidden to Succeed: How Licensure Laws Hold Ohioans Back,” The Buckeye Institute’s William and Helen Diehl Fiscal Policy Fellow, Tom Lampman, took a sobering look at the effects this has on the state’s employment prospects and consumer costs.

“Not only does restricted job growth deprive workers of opportunities, it keeps entrepreneurs from starting or expanding businesses,” Lampman wrote. “Artificial barriers that keep workers out of an occupation limit the labor supply, driving up hiring costs. Investors are more likely to seek out states with more accessible and more affordable labor markets. Though Ohio does not license as many occupations as neighboring states, Ohio licenses almost always cost more time and money to get. Of Ohio’s neighboring states, only Kentucky has a more burdensome licensure system. Having the most expensive licenses in the region makes Ohio less attractive to investment and more hostile for entrepreneurs. Ohio cannot be the competitive job creator it should be when surrounded by more inviting, more accessible labor markets.”

In December, The Buckeye Institute’s statehouse liaison and policy analyst, Greg R. Lawson, provided testimony to the Ohio Senate Government Oversight & Reform Committee about S.B. 213, the bill that would eliminate the licensure requirement for cosmetologists to be promoted to store managers.

“Licensing requirements only make finding a job more difficult,” Lawson said. “Every unnecessary license is a red-taped hurdle that must [be] cleared. Every hour of unnecessary, unpaid training needed to satisfy bureaucratic requirements is an hour not spent earning tips, impressing a boss, serving a customer, or climbing a corporate ladder. Those are hours of productivity, hours of opportunity that young, low-income workers sorely need, but that the state continues to take away. Senate Bill 213 and reforming Ohio’s occupational licensing laws will help remove at least some of the obstacles faced by the state’s workforce. More reforms are needed, of course, but the fewer hurdles there are to clear, the faster Ohio—and her hair dressers— can pursue prosperity and success.”

The Institute for Justice, an Atlas Network partner based in Arlington, Va., that litigates cases designed to protect individual liberties and economic freedom, has fought occupational licensing laws throughout the United States for many years. Its 2012 video “Should You Need the Government's Permission to Work?” provides effective summary of the issue.