Stephanie WhittExecutive Vice President
The increase of government licensing has been drastic over the past half-century. In 1950, just one in 20 American workers required a license or certificate to obtain a job. Today, it is estimated that up to 30% of Americans need government permission to earn a living. However, licensing laws are often a patchwork across the various states. In fact, in the Institute for Justice’s study License to Work, of the 102 occupations impacting low- and moderate-income Americans, only 23 require a license in 40 states or more. This shows that many occupations can be regulated to protect consumers’ health or safety without a costly and burdensome license. Surprisingly, Tennessee ranks as the 12th most onerous state for licensing. State licensing boards can use their authority to pass a rule and hinder an entire group of Tennesseans’ ability to earn an honest living. These boards often pass restrictions to enter into their profession under the guise of protecting health and safety, but more often it is about stopping competition or protecting their industry. Unfortunately, if someone wants to challenge whether a licensing board’s actions actually protect public safety or just the paychecks of a few lucky insiders, they bear an almost insurmountable barrier.
Expand the existing Right to Earn a Living Act by requiring licensing boards to state the public health and safety rationale for their actions. First, boards should have to articulate the reason for their rules and regulations upfront and in writing. And if someone challenges that action in court, the government—not the person being kept out of a job—should have to affirmatively prove to the court that its law, rule, or regulation is necessary to protect public health and safety.
What the Bill Does
The Right to Earn a Living Act 2.0 expands the existing law passed overwhelmingly by the General Assembly in 2016. It would require that licensing boards provide the reason for their rules and regulations upfront, and if such actions are challenged in court, then the burden is on the government to prove that the rule or regulation is necessary to protect public health and safety. People can already challenge licensing boards’ actions in court, but when they do, they must disprove any conceivable reason that the board provides for passing such a rule or regulation. If a licensing board is keeping someone out of a job, it should bear the burden of proving the necessity of its actions.
Who This Impacts
This issue affects real-life Tennesseans. A recent study by the Institute for Justice found that unnecessary licensing red tape keeps 46,068 Tennesseans out of work. This translates into an economic loss of more than $4.5 billion. A good example of harmful licensing laws in action is shown in the story of Memphis resident Elias Zarate.
Essentially orphaned and abandoned at age 13 when his mother died and father left the country, Elias tried to finish high school but ultimately made the decision to drop out of in the middle of his 12th grade year in order to raise his two younger siblings. Over the next several years, Elias worked in a restaurant and as a manager of a construction crew installing ceramic tile to put food on the table for his younger siblings. He also worked odd jobs as he could find them, all the while honing his skills as a barber, his one true passion.
Elias is now 25 years old, has a family of his own, and wants them to have a better life than he had—and he is ready to take the next step in his career. Elias is already great barber. Regarded in his neighborhood as one of the best barbers around, he has a bright future and dreams of one day opening his own shop. On reputation alone, Elias earned a job at a high-end barber shop in the Memphis area. After many years of hard, grueling work to provide for others, Elias thought he had finally made it. He was finally able to work in a field that he cared, and he was able to earn good money doing it. Life, it seemed, was coming together.
Elias has overcome numerous challenges, but he was not aware that there was one obstacle that he would never be able to overcome: the fact that the government legally disqualified him—and anyone without a high school degree—from receiving a barber license. Unfortunately, because of this poorly-thought out law that was aimed at protecting existing license holders and not the public, Elias watched state officials quickly tear his dream apart. Elias was shut down shortly after he got started. He was subjected to fines and other civil punishment. The high school requirement violates Elias’s right to earn a living and his right to equal treatment under the law, as protected under the state and federal constitutions. Improving the Right to Earn a Living Act will ensure that needless licensing burdens do not stand in the way of Elias’ and thousands of other Tennesseans’ ability to realize the American Dream.
“The Dirty Dozen: Eliminating Red Tape for Blue-Collar Workers.” Beacon Center of Tennessee.
“At What Cost? State and National Estimates of the Economic Costs of Occupational Licensing.” The
Institute for Justice. November 2018.