Last fall, we told you about the work of the Oklahoma Occupational Licensing Task Force, a group of leaders from the Legislature, state agencies, and private businesses that formed in 2016 to study occupational licensing in the state. The task force’s recommendations are now popping up in legislation this session, and this is very welcome news! These legislative efforts at licensing reform have the potential to help many Oklahoma workers — especially low-income workers — move into professions and occupations that have been off-limits to them due to the cost associated with a license or a criminal history.
Licensing requirements are a growing problem
In theory, occupational license requirements are designed to protect the public from harm. Certain occupations, when practiced by someone who does not know what they are doing, can pose great risks. For example, practicing medicine without the necessary training and knowledge could cause a great deal of harm to patients.
However, an increasing number of professions now require a license to practice, and not all of this growth is due to concerns about public health or safety. In 1950, just 5 percent of the workforce needed a license to do their job – now it’s nearly 30 percent. The growth in occupational licensing is a concern for many individuals and groups on both sides of the partisan aisle. Free market and libertarian groups like the Institute for Justice and Americans for Prosperity, centrist think tanks like the Brookings Institute, and former president Barack Obama have all advocated for reforms in occupational licensing designed to remove unnecessary barriers to work.
Though Oklahoma is not among the states with the most extensive occupational licensing requirements, we do have higher than average fees for licenses. A 2012 study by the Institute for Justice found that, though we only license 29 of 102 low- to moderate-income occupations studied, we charge an average of $116 for a license and require more than a year of training on average.
Reforms on the horizon in Oklahoma
After studying occupational licensing requirements in Oklahoma, the Task Force released a blueprint for evaluating whether government licensing of a particular occupation is needed. SB 1475 by Sen. Adam Pugh would form a commission to actually do that evaluation. The commission would be tasked with evaluating all the occupational licensing requirements in Oklahoma once every four years and recommending needed changes to the legislature.
Another bill, HB 2771, would address one of the simpler problems identified by the task force — a lack of basic information about which occupations require a license and what the requirements are. The Task Force gathered this information during its work, but HB 2771 would require it to be made available and regularly updated on the Oklahoma Department of Labor website. This would allow Oklahomans to quickly search to see which occupations require a license, how much it costs, and how much training or education is required.
One of the larger concerns in occupational licensing is that many licensed professions are closed to those with a criminal history. Blanket bans that automatically disqualify anyone with a criminal history from getting the license — even if an individual’s specific criminal activity happened decades ago and has nothing to do with the duties of the occupation — are all too common. HB 2894 would prohibit these blanket bans and require licensing agencies and boards to list specific criminal activities relevant to the duties of the occupation that would prevent someone from getting a particular license. Applicants who are denied because of a criminal history would be provided with an appeal process. This would open doors for those with a conviction or other criminal history, reducing recidivism and boosting the overall economy.
Finally, SB 1174 offers some progress but also unfortunately limits local control of occupational licensing. First, the progress; this bill would waive the initial licensing fees for low-income individuals, military families and young workers. This would allow these individuals to get started in a profession for a reduced cost. However, the bill would also prohibit local governments from making their own licensing rules tailored to local concerns. Local governments would be prohibited from licensing any profession already licensed at the state level, and they would be allowed to charge only $25 for any other occupational license they require. In this way, SB 1174 is part of a troubling trend toward limiting local governments’ ability to govern.
The truth is that SB 1174 does very little to actually fix an occupational licensing system that overly burdens low- and moderate-income Oklahomans. A one-year waiver of fees is a good start, but significant reform of occupational licensing will require some broader, permanent changes to requirements.
Prospects for real reform
Overall, there’s cause for optimism on occupational licensing reform. All four bills have passed the first round of legislative consideration and are waiting to be considered in round two, and three of the four would make real contributions to licensing reform. But legislators need to hear that this issue matters to Oklahomans, or these bills could easily lose momentum.