Relaxing Occupational Licensing Laws: A Less Controversial Solution to Labor Shortages

Labor shortages resulting from COVID-19 have been a heavily discussed topic and are having noticeable impacts in the labor forces of many states.

In light of the persistent labor shortages in Iowa and Minnesota, some lawmakers are proposing exceptions to child labor regulations to allow younger workers to fill open roles. Generally, new legislation pushing for the deregulation of labor markets to make finding work more accessible should be applauded  and the legislation in Iowa and Minnesota does make needed changes.

However, these bills have raised concerns regarding the potential risks to child laborers and whether the experience gained from these jobs would be beneficial or harmful. Critics argue that the “experience” gained from these jobs is negligible because a lot of child labor jobs are menial jobs, and those skills aren’t transferable. Furthermore, it’s mostly children from low-income families who are hired when labor regulations are loosened, raising concerns about the exploitation of vulnerable children.

With these concerns, lawmakers could look to a less controversial form of deregulation, the relaxing of occupational licensing laws in occupations with shortages.

Occupational licensing laws are often put in place to protect consumers and ensure that professionals in certain fields are qualified and competent. However, certain requirements can also be a significant barrier to entry for individuals seeking employment. This is especially true for low-income individuals and communities, who are more likely to be impacted by these laws.

Occupational licensing laws require individuals to meet certain educational or training requirements before they can work in a particular field. While these laws are intended to ensure that professionals are competent and qualified, they can also create barriers to entry for low-income individuals and those without access to formal education and training programs. This is particularly true in fields such as construction and meatpacking, where workers are often hired based on their skills and experience rather than their formal education.

By relaxing occupational licensing laws, more individuals would be able to enter these fields and fill open positions. This would not only help to address the labor shortages in Iowa and Minnesota, but it would also provide more opportunities for low-income individuals and communities. This would lead to greater economic mobility and could help to reduce income inequality.

Relaxing occupational licensing laws does not mean eliminating all regulations or standards for professionals in these fields. Instead, it means reevaluating these regulations and ensuring that they are not creating unnecessary barriers to entry for workers. This could involve streamlining the licensing process, creating alternative pathways to licensure, or reducing the educational or training requirements for certain positions.

It is clear that the deregulation of laws dictating who can gain employment in various jobs is needed to combat labor shortages. The best place to start this deregulation should come from a reexamination of licensing laws.