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Wednesday, January 25, 2017

State Licensing Bad for the Economy

This is an opinion piece from Tom Reeder. It is written with reference to HB170, which proposes significantly higher licensure fees on health care facilities in Wyoming.

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Do licensing requirements restrict job opportunities or protect the public? 


  • Americans that cannot work without obtaining a license or other governmental consent has grown in two decades from 4% to 25%.
  • Occupational licensing laws were first passed to protect the public from negligent, unqualified and substandard practitioners, but increasingly they are seen as a mechanism designed not to protect consumers but rather to insulate existing business interests from competition.
  • Licensing requirements vary widely from state to state, too. For example. Michigan mandates three years of education and training to become a licensed security guard, while most other states require only 11 days or less. South Dakota, Iowa and Nebraska require 16 months of education to become a licensed cosmetologist. While New York and Massachusetts require less than eight months.
  • Licensing restrictions cost millions of jobs nationwide and raise consumer expenses by over $100 billion.
  • Morris Kleiner, an economics professor at the University of Minnesota, "With licensing, you're creating a monopoly, and it's very difficult for people in many places to enter these occupations, Kleiner says. “It’s keeping people away from the American dream”.

“According to the bill, the sole purpose of the licensure fee is to pay for the costs of administering the licensing procedure”. 

Looks to me like they also want to deter competition which could lead to lower costs or heaven forbid maybe a better way of handling health care. When Medicaid expansion did not pass numerous times what happened? You saw hospitals put in clinics that could perform medical procedures that were being done in their emergency rooms to save money. Clinics created lower costs and more efficient. Hospitals did this because the money was not just given out. They had to solve a problem. What a great solution to a real problem.

The House Education Committee voted Monday night to sponsor the omnibus bill. In this bill is a moratorium on alternative schools until at least 2019. Oh! Another blow to school competition, free enterprise and parent’s choice. Competition creates better rational thinking, efficiency, better outcomes, maybe lower costs, etc. 

In my opinion there are certain legislators that are not addressing the real problems. Instead, let’s generate more revenue. I had a legislator once tell me, watch the body, they try to fix a problem by throwing more money at it or creating more revenue. They adhere a band aid when a full blown surgical dressing is needed.

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