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Utah is making the right moves on licensing rules

Occupational licensing reform will lift Utah’s COVID-19 economic recovery

In this Sunday, Feb. 19, 2017 photo Jocelyn DoCouto, top, adds braid extensions for seven-year-old Zanyrah Parrott, of Pawtucket, R.I., in DoCouto’s home, in Pawtucket. Utah is working to reform the cumbersome and expensive occupational licensing requirements for hairdressers, barbers and cosmetologists.
Steven Senne, Associated Press

An exciting effort is underway to reconsider rules that make it difficult for Utahns to get a job in certain occupations. For example, current rules require 1,600 hours of training to get a license to work as a cosmetologist in Utah. In addition, cosmetology schools charge as much as $19,000 — much more than the $15,000 national average. Do these rules really protect consumers? Or are they barriers between would-be workers and economic opportunity?

Luckily, Gov. Spencer Cox’s first action after his inauguration was to order a review to remove excessive regulation that “creates barriers to working.” Regular review is essential for ensuring that the rules don’t get out of hand. The research is clear: occupational licensing often holds us back without promoting consumer safety.

Unfortunately, these financial barriers and restrictions are too often overbearing. As many may remember in 2012, Jestina Clayton, a refugee from Sierra Leone, won a lawsuit against the state’s licensing board because its rules prevented her from braiding hair for others in the traditional style that she learned in her youth. At the time, Jestina would have had to do approximately 2,000 hours of training — none of which would have been related to her traditional hair braiding methods.

Cases like Jestina’s illustrate why Gov. Cox’s order to review Utah’s existing licensing rules is desperately needed. Licensing has seen a massive surge despite little evidence that licenses effectively protect consumers. In 1950, only about 1 out of 20 workers required a license to work. Today, more than 1 in 5 workers has to have a license to practice their vocation.

Many workers, like Jestina, are caught up in a web of regulations that don’t serve the needs of consumers. Instead, they protect those working in the industry from having to compete with budding entrepreneurs. So these efforts to reconsider licensing are an important step toward leveling the playing field for all Utahns.

For example, rather than requiring thousands of hours of training, the risks in many licensed occupations could be controlled by using alternative types of regulations. Consumers could receive information about the reputation of service providers through online rating services, like Yelp.

One option that fits cosmetology well is requiring applicants to complete an examination on health and safety. Compare cosmetology and food service. Utah currently regulates workers in the food preparation industry by requiring applicants to obtain food handler’s permits. You can get a permit online for about $25 after you pass the online examinations. In the case of cosmetology, a similar exam paired with onsite inspections as is done with food service can ensure consumers are safe. And approaches like this promote safety without placing thousands of hours worth of barriers between opportunity and aspiring entrepreneurs like Jestina. A proposal like this is under consideration in the Utah Legislature right now.

Even in a world without any occupational licensing requirements, many workers would still pursue extra training in order to better themselves. For example, both mechanics and yoga instructors are certified rather than licensed. Workers in unlicensed trades pursue these as a way to differentiate themselves from the crowd. Cosmetologists and other currently licensed workers can pursue similar certifications to attract customers.

Fundamentally, policymakers should match the regulations to the risks involved. And consumer safety can be maintained without licenses that make it difficult to work.

Utah is awash in promising reform efforts. In addition to Cox’s executive order and the changes to cosmetology licenses, House Bill 139 would place greater emphasis on real-world experience in obtaining licenses by removing educational requirements from many job openings.

These are all promising efforts that will improve opportunities for workers across the state when we need them most. Utah’s government should be applauded for reading the evidence and updating licensing rules to provide economic dynamism without compromising consumer safety. Common sense reform should keep the Utah economy well-positioned to bounce back from the COVID-19 downturn.

Josh T. Smith is a research director at the Center for Growth and Opportunity at Utah State University. Edward Timmons is professor of economics and director of the Knee Center for the Study of Occupational Regulation at Saint Francis University in Loretto, Pennsylvania.