Congress Tackles Occupational Licensing

Washington provides incentives for states to review and modify restrictive licensing requirements.
Sign industry workers practice a distinct trade which should be recognized as such.

During the past seven decades, states and local jurisdictions across the US have gradually and substantially increased the nature and weight of professional/vocational licensing requirements. According to the Institute of Justice (IJ; Arlington, VA), a nonprofit providing legal assistance to support economic liberty and property rights, 25% of American workers today must obtain some type of government license to practice their occupations. In 1950, only 5% were required to obtain occupational licenses.

American sign companies and their employees have experienced a steady increase in the number and extent of licensing requirements over the past two decades. Examples include federal – Occupational Safety and Health Administration (OSHA) requirements for training and certification of crane operators – and state requirements for certification of specific work operations, such as structural welding and electrical work commonly performed by sign company employees.

A number of states and local jurisdictions have imposed licensing requirements on the sign industry that were originally developed to regulate larger industries (such as general construction). For example, a sign company’s electrical work is normally limited to lighting maintenance and making final connections of new signs to existing branch circuits, but some jurisdictions expect sign company workers to carry the same type of licenses required for journeymen or master electricians. Because sign company workers typically perform a broad range of work procedures, licensing authorities in certain states may impose multiple licensing requirements.

While licensing might be necessary in cases where specific safety issues have been documented, the position of IJ and the Mercatus Center of George Mason Univ. (Arlington, VA) is that governmental authorities should base licensure requirements on evidence of significant harm stemming from the absence of such requirements. IJ also suggests licensing authorities should consider less-restrictive alternatives for mitigating any documented issues before imposing new licensing regulations. 

CONGRESS ACTS

Congress recently passed the Strengthening Career and Technical Education for the 21st Century Act (H.R. 2353), a new measure that was signed into law by President Trump on July 31. With an effective date of July 1, 2019, this law increases funding available to states by $1.3 billion and also provides state governors with authority to use career and technical education funds for – among other things – reviewing their existing licensing requirements. A version of the New Hope Act (H.R. 2155) is incorporated into this law, authorizing states to examine and identify licensure requirements which “pose an unwarranted barrier to entry into the workforce.” 

The Mercatus Center at George Mason University compares various states' occupational licensing requirements to national averages.
The Mercatus Center at George Mason University compares various states' occupational licensing requirements to national averages.

The new law also provides a sound basis for the sign industry and its advocates to challenge unnecessary or heavy-handed licensure requirements. Inconsistencies in regulations among states represent one key issue identified by IJ in their analysis of licensure requirements for 102 distinct occupations. A majority of these 102 occupations currently is practiced in at least one state that does not currently require corresponding licensing. According to IJ, scant evidence exists of any significant or substantial harm in states where licensing of similar occupations is not required. Also, massive variations exist among the licensing requirements of various states; in approximately half of the occupations studied, IJ reports that the difference between the lightest and heaviest state requirements exceeds 1,000 days of education and experience.

These licensing inconsistencies can pose substantial obstacles to worker mobility, and many state and local licensing bodies operate without effective oversight to prevent anti-competitive behavior. This can be a problem because existing licensees are heavily represented on these bodies; tightening licensure requirements may serve the private interests of licensing board members. IJ recommends that states should have independent oversight bodies to guard against anti-trust policy violations.

SIGN INDUSTRY PERSPECTIVE

Sign industry workers and those in a number of other specialty industries seldom have been duly recognized or credited by regulators for their professional qualifications developed through decades of practical experience. Licensing bodies have narrowly classified people working in the sign industry as “welders,” “crane operators,” “electricians” or “steel erectors,” rather than pursuing a more reasonable approach of recognizing signage work as a distinct trade and developing trade-specific licensure categories that acknowledge practical experience as a legitimate basis for certification. 

In lieu of such multifaceted and burdensome licensing requirements, this new law encourages state and local authorities to foster an environment that enables workers to enter their field of choice without undue barriers. Known as the land of opportunity, the US ought to be doing more to facilitate entry into the workforce; it seems Congress has finally received this important message.

Signs of the Times November 2018

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