The bill earned wide bipartisan support and passed the House and the Senate by wide margins last month. Northam has signaled support.
If enacted, HB 883 would set up a pilot program aimed at drastically slashing red tape. Under the bill’s pilot program, the Department of Professional and Occupational Regulation (DPOR) and the Department of Criminal Justice Services (DCJS) would have the goal of reducing “regulatory requirements, compliance costs, and regulatory burden” by 25 percent over the next three years.
Those departments can achieve that target by eliminating, modifying or streamlining regulations through rulemaking or by flagging requirements so that the legislature can change the law. To stay on track, both departments would have yearly benchmarks to hit and would need to regularly report their efforts to the Department of Planning and Budget. Failing to meet their goals could trigger an audit.
The pilot program could have a major impact. DPOR now regulates more than 305,000 people in around 150 different occupations, including barbers, contractors and wrestlers. DCJS licenses more than 52,000 individuals.
Clearly, Virginia’s thicket of occupational licenses is prime for repeal. No longer limited to doctors and lawyers, the number of licensing requirements has skyrocketed. In the 1950s, 1 in 20 American workers needed a license to work. Now it’s 1 in 4.
According to a recent study by my organization, the Institute for Justice, Virginia has the seventh most burdensome licensing laws for lower-income occupations. Among those occupations, the state’s licensing requirements, on average, force Virginians to complete 631 days of coursework or experience, pay $291 in fees and pass an exam.
As a result, many of Virginia’s licensing requirements are much more stringent than what other states require. For instance, commercial contractors for painting and installing drywall need two years of experience for their licenses. But if they hop across the border to Kentucky or Maryland, they can work without a government permission slip. Likewise, a Virginian looking to become a licensed security alarm installer must pay $650 in fees and have three years of experience. In Maryland and the District, installers need only pay $133 and $266 in fees to start working — no experience necessary.
Defenders of occupational licensing often claim that it’s necessary to protect the public’s health and safety. But many of the commonwealth’s licensing schemes are wildly out of sync with their perceived harms. To cut or style hair as a licensed barber or cosmetologist takes 1,500 hours of classes. In contrast, after finishing a mere 130 hours of training, any citizen can become an armed “special conservator of the peace,” a license that allows him or her to carry a badge and a gun, call himself or herself “police” and even make arrests.
Meanwhile, liberalizing licensing laws can have a significant impact on entrepreneurship. Consider African-style natural hair braiders, who weave, twist and braid hair without any potentially harsh chemicals. Prior to deregulation, braiders had to finish 170 hours of coursework to become licensed. But, according to the Department of Professional and Occupational Regulation, there was “no evidence of public harm [that] supported the continued regulation of hair braiding.” So, in 2012, lawmakers repealed this “unnecessary” license.
Now freed from licensure, it’s easier for braiders to open their own businesses. Last year, a report by the Mercatus Center concluded that the “deregulation of hair braiding has enhanced economic opportunity for hair braiders in Virginia.” After deregulation, the number of beauty salons in Virginia grew about seven percent faster compared to bordering counties in other states. Today, braiders can work without a license in 22 other states.
Easing regulatory burdens is a common-sense solution to one of Virginia’s most pressing barriers to employment.
Nick Sibilla is a legislative analyst at the Institute for Justice.