Five Alternatives to Occupational Licensing

Libertas has long documented the detrimental effects of occupational licensing. This form of government regulation stifles economies and creates a stringent, artificial class system via economic protectionism. Unfortunately, in conversations relating to reforming occupational licensing laws, many overlook solutions outside of simply slashing various licensing requirements.

Despite often being passed over, there are a number of fully viable alternatives to occupational licensing that states can begin to implement. Let’s examine those solutions.

The Free Market

The free market may provide the best alternative to occupational licensing. In the free market, competition eventually drives individuals who are unfit to perform their occupation out of service. In this instance, the free market essentially serves the same function as occupational licensing, except it comes without expensive, time-consuming, and often arbitrary requirements that keep qualified workers from entering the labor market. Within the free market, consumers are afforded protection as bad actors, unable to sustain their practices, are forced to leave the labor market, and successful individuals that serve the community are rewarded through increased patronization. 

Easy Access to Reviews

Formally known as quality service disclosures, this alternative mandates consumer reviews of various professionals become aggregate and easily accessible. Early access to reviews allows consumers to effectively compare service providers and eventually select the one that best aligns with their quality and price desires. 

Voluntary Certification

In the face of large repeals to occupational licensing, voluntary certification allows professionals to maintain a concrete way of demonstrating their competence and skill relative to their peers to prospective consumers. With voluntary certification, professionals can obtain a certificate from a private organization, not a government agency, demonstrating their high competency and ability not to harm consumers through their work. 

Insurance 

If consumers are truly concerned about their safety and utilize this reason to support stringent occupational licensing requirements, they may be interested in this option. Insurance and bonding hold professionals liable for endangering the public by incentivizing professionals to practice their vocation dutifully. This option further reduces barriers to those entering a profession as it eliminates the often absurd requirements and lack of mobility associated with licensing. 

Bolstering the Deceptive Trade Practices Act 

The state of Utah is a participant in The Deceptive Trade Practices Acts. This act is designed to protect consumers from harmful practices carried out by those in the labor market. If this act is strengthened, it can further be used to punish low-quality providers in a way that makes occupational licensing an idea of the past. This might be the least attractive option as it encourages the growth of a governmental arm. However, this downside still may be outweighed by the benefits of eliminating occupational licensing. 

With so many acceptable alternatives to occupational licensing, it’s obvious that there are solutions states can implement to ensure consumer safety while also deregulating the market. All of the presented alternatives to licensing represent superior solutions when compared to traditional occupational licensing. Local lawmakers should first consider these choices before licensing more and more occupations.