DOL announces $7.5M in grants for occupational licensing reform

Dive Brief:

The U.S. Department of Labor (DOL) has announced the availability of $7.5 million in grants to eliminate or streamline occupational licensing requirements and increase portability.
The money, available to states, post-secondary institutions and others, will be used to address what DOL calls unnecessary licensing for some occupations. Some say these licenses serve as barriers to entry for low-income workers, veterans and others.
Excessive licensing raises the cost of entry, often prohibitively, for many careers, said U.S. Secretary of Labor Alexander Acosta in a statement, and the number of jobs that require a license has increased drastically in recent years. “If licenses are unnecessary, eliminate them," he added; "If they are necessary for health and safety, then streamline them and work with other states for reciprocity.”

Dive Insight:

Licensing reform is part of the Trump administration's broader mission, which also includes plans to roll back regulations and encourage apprenticeships — but it has been on the White House's agenda long before President Trump took office.

In a 2015 report, the Obama administration also cited a sharp increase in licensing requirements. The report says that licenses are often cost-prohibitive, are out of sync with the skills necessary for jobs and sometimes raise prices for consumers. In many fields, occupational licensing plays an important role, the report says, but in others, it poses unnecessary barriers. The report makes some recommendations for reform but also calls on researchers to assess other possibilities.

Stories of these barriers continue to play out in the media, as well. A new report from self-described non-partisan think tank Archbridge Institute was released earlier this month and discusses the "growing bipartisan consensus that the United States should pursue occupational licensing reform." In covering the report, local media outlets profiled those subject to licensing requirements in their states — from barbers to florists — and editorial boards offered their support for reform.

Some argue that for employers and others, licensing sometimes offers assurances that an employee has completed specific training or hours requirements. But as those in talent acquisition face a tight labor market, many have turned to skills-based hiring, letting go of some education requirements in an effort to bridge the talent gap. A roll-back of state licensing requirements could potentially widen talent pools even further.