FTC New Target – Occupational Licensing

New acting Federal Trade Commission Chairwoman Maureen K. Ohlhausen announced as her first major policy initiative for the agency – Occupational Licensing Reform.  This will be the focus of the FTC’s new  Economic Liberty Task Force.

As the FTC explains;

Nearly thirty percent of American jobs require a license today, up from less than five percent in the 1950s. For some professions, licensing is necessary to protect the public against legitimate health and safety concerns. But many more occupations could be practiced safely and effectively with fewer, or no, licensing requirements.

In many situations, the expansion of occupational licensing threatens economic liberty. Unnecessary licensing restrictions erect significant barriers and impose costs that cause real harm to American workers, employers, consumers, and our economy as a whole, with no measurable benefits to consumers or society. These restrictions can:

• close the door on job opportunities for people who are ready to work;
• prevent workers from marketing their skills to employers and consumers
• reduce entrepreneurship and business innovation, insulating current service providers from new forms of competition; and
• stifle price, quality, and service competition among professionals, which hurts all consumers.

This is not new terrain for the FTC, as they previously looked at some of the anti-competitive effects of state licensing requirements from requirements that only licensed morticians may sell caskets (thus preventing online competition) to exempting websites that enabled consumers to generate legal forms from the definition of the practice of law.

Chairwoman Ohlhausen explained;

The competitive process not only drives our economy, it provides greater access, choice, quality, and other benefits for consumers. . . . I am particularly concerned that occupational licensing disproportionally affects those seeking to move up the lower and middle rungs of the economic ladder, as well as military families and veterans. Occupational licensing regulations can prevent individuals from using their vocational skills and entering new professions, as well as starting small businesses or creating new business models.