Jobs for Californians: Strategies to Ease Occupational Licensing Barriers

Report #234, October 2016
Jobs for Californians: Strategies to Ease Occupational Licensing Barriers

Full Report

Executive Summary

Press Release

FOR IMMEDIATE RELEASE
October 4, 2016

For Additional Information Contact:
Carole D’Elia, Executive Director
(916) 445-2125

Commission Calls for Removing Unnecessary Licensing Barriers to Good Jobs

The Little Hoover Commission in its report, Jobs for Californians: Strategies to Ease Occupational Licensing Barriers, sent Tuesday to Governor Brown and the Legislature, called for a comprehensive review of a state occupational licensing system that increasingly stands in the way of upward mobility. In its study, the Commission found that more than one in five Californians must meet government-set requirements to practice their occupations. Thousands of Californians, meanwhile, especially former offenders, veterans, military spouses and those educated and trained outside of the state, cannot find work and are unable to move up the economic ladder.

Though billed as consumer protection, occupational licensing requirements often advance other goals, such as professionalizing occupations, standardizing services and limiting competition, the Commission learned during a yearlong review. The burden to Californians is significant: Applicants to lower-income licensed occupations – those who earn less than the national average income – on average pay $300 in fees, spend 549 days in education or training and take an exam in order to work. Consumers also bear a burden when the government limits who can practice a profession. Nationally, consumers pay an estimated $200 billion more annually for services due to licensing restrictions. Lowerincome people are more likely to be affected by reduced access to services.

“Getting government out of the way of people finding good jobs is a bipartisan issue,” said Little Hoover Commission Chair Pedro Nava. “California must review all of its licensing regulations and assess whether the level of consumer protection provided justifies barring entry to occupations and limiting access to services.”

In addition to a comprehensive evaluation of California’s occupational regulations, the Commission recommended:

  • Expanded demographic data collection to understand how licensing regulations affect different demographic groups.
     
  • Additional resources to verify data submitted during legislative reviews of proposed licensing and current licensing regulations.
     
  • Increased access to the criteria used to evaluate applicants for licensure.
     
  • Creation of bridge education programs to help people who are missing only a few educational requirements begin working more quickly.
     
  • Investment in apprenticeship programs to help individuals meet training requirements and earn a wage for their labor as they build skills for upward mobility.
     

The Little Hoover Commission is a bipartisan and independent state agency charged with recommending ways to improve the efficiency and effectiveness of state programs. The Commission’s recommendations are submitted to the Governor and the Legislature for their consideration and action. For a copy of the report, visit the Commission’s website: www.lhc.ca.gov.

Fact Sheet

Study Description

For this study, the Commission reviewed occupational licensing in California. 

The number of individuals who must meet government-established criteria to practice a given occupation has grown rapidly in the last half century. In the 1950s, fewer than five percent of workers nationwide were required to hold licenses to practice their professions; by 2008, that number had increased to 29 percent of workers nationwide, according to economists Morris Kleiner and Alan Kreuger. Approximately 21 percent of California’s 19 million member workforce is licensed. Proponents of occupational licensing advocate that these regulations are necessary to protect the health and safety of consumers. Critics contend that these regulations at times go beyond consumer protection and unjustifiably restrict competition. 

The focus of the Commission’s review was on the impact of occupational licensing on upward mobility and opportunities for entrepreneurship and innovation for Californians, particularly those of modest means. The Commission also examined the result of occupational licensing on the cost and availability of services provided by licensed practitioners to consumers. The Commission also assessed the connection between occupational licensing regulations and the underground economy. The Commission explored the balance between protecting consumers and enabling Californians to enter the occupation of their choice. 


Previous Studies

Agenda

Overview

In this report, the Commission calls for a comprehensive review of occupational licensing regulations to increase upward mobility of workers in California. 

During its review, the Commission found the state’s licensing process often bars entry to occupations and is not a thoughtful examination of how best to protect consumers. The Commission also found some groups – such as former offenders, military spouses, veterans and foreign trained workers – are more vulnerable to licensing barriers. 

The Commission recommends experts consider whether the current level of regulation strikes the appropriate balance between protecting consumers and limiting access to occupations and services.

Print 
			Agenda
  • June 23
    2016
    Occupational Licensing
    1:00 p.m.–3:00 p.m., BMG Conference Room, Lower Level, 925 L Street
    Roundtable Discussion
    Agenda

    AGENDA

    Roundtable Discussion on Occupational Licensing
    Thursday, June 23, 2016, 1:00 p.m. – 3:00 p.m.
    BMG Conference Room
    Lower Level, 925 L Street
    Sacramento, CA 


    Meeting Goals: To understand the feasibility of implementing potential recommendations being considered for the Little Hoover Commission’s occupational licensing study.

    1:00 – 1:15 p.m.

    Welcome
    Pedro Nava, Chair, Little Hoover Commission

    Opening Remarks
    Assemblymember Rudy Salas, Chair, Assembly Committee on Business and Professions

    Introduction to Study
    David Beier, Subcommittee Chair, Little Hoover Commission

    Study Process and Purpose of the Roundtable
    Carole D’Elia, Executive Director, Little Hoover Commission

    1:15 – 3:00 p.m.

    Discussion: Policymakers will discuss potential recommendations developed by the Little Hoover Commission over the course of its occupational licensing study process. These will include ideas about occupational regulation review, data collection, rulemaking and policy adjustments to make it easier for separating service members, military spouses, foreign-trained workers and former offenders to obtain license while still protecting public health and safety.

    There will be an opportunity for public comment at the end of the roundtable. Please notify Commission staff if you would like to make a comment.

    Public Notice

    PUBLIC NOTICE

    FOR IMMEDIATE RELEASE
    June 13, 2016

    For Additional Information Contact:
    Carole D’Elia, Executive Director
    (916) 445-2125

    Notice of Meeting

    On Thursday, June 23, 2016, the Little Hoover Commission will convene a roundtable meeting to discuss occupational licensing. The meeting will begin at 1:00 p.m. in the BMG Conference Room in the lower level at 925 L Street, Sacramento, CA 95814. The discussion will explore the feasibility and ramifications of potential Commission recommendations on occupational licensing, including review, data collection, rulemaking and policy adjustments.

    All public notices for meetings are on the Commission’s website, www.lhc.ca.gov. If you need reasonable accommodation due to a disability, please contact Carole D’Elia at (916) 445-2125 or littlehoover@lhc.ca.gov by Thursday, June 16, 2016.

  • March 30
    2016
    Occupational Licensing
    9:30 a.m., Mike Balkman City Council Chambers, City Hall, 9770 Culv
    Public Hearing
    Agenda

    AGENDA

    Public Hearing on Occupational Licensing
    Wednesday, March 30, 2016, at 9:30 a.m.

    Mike Balkman Council Chambers, City Hall, 9770 Culver Blvd. 
    Culver City, CA 


    Opening Remarks

    The Licensees’ Perspective 

    1. Jane Schroeder, Regulatory Policy Specialist, California Nurses Association (Written Testimony)
       
    2. Myra Irizarry Reddy, Government Affairs Director, Professional Beauty Association (Written Testimony)
       

    Why an Industry Wants To Be Licensed

    1. Deborah Davis, President & CEO, Deborah Davis Design (Written Testimony)
       

    Licensing Former Offenders

    1. Michelle Natividad Rodriguez, Senior Staff Attorney, National Employment Law Project (Written Testimony)

    2. CT Turney, Senior Staff Attorney, A New Way of Life Reentry Project (Written Testimony)


    Break for Business Meeting and Lunch: 11:30 a.m. – 12:30 p.m.

    Licensing Immigrants

    1. José Ramón Fernández-Peña, MD, MPA, Associate Professor, Health Education, San Francisco State University; Policy Chair, IMPRINT; Director, Welcome Back Initiative​​​​​​ (Written Testimony)


    Licensing Veterans and Military Spouses

    1. Laurie Crehan, Ed.D., Regional State Liaison, Southwest, Office of the Deputy Assistant Secretary of Defense, Military Community and Family Policy (Written Testimony)
       

    The Role of the Department of Consumer Affairs in Occupational Licensing

    1. Tracy Rhine, Chief Deputy Director, Department of Consumer Affairs (Written Testimony)


    Public Comments

    Public Notice

    PUBLIC NOTICE

    FOR IMMEDIATE RELEASE
    March 16, 2016

    For Additional Information Contact:
    Carole D’Elia, Executive Director
    (916) 445-2125

    Notice of Meeting

    On Wednesday, March 30, 2016, the Little Hoover Commission will conduct a public hearing on occupational licensing in California. The hearing will begin at 9:30 a.m. in the Mike Balkman Council Chambers of the City Hall located at 9770 Culver Blvd. in Culver City.

    This is the Commission’s second hearing on occupational licensing. At this hearing, the Commission will examine occupational licensing from the perspective of the people affected by it. The Commission will hear from licensees and a representative of an industry trying to become licensed about the health, safety and accountability provided by licensing. The Commission will then hear about the impact of occupational licensing on job seekers, including former offenders, immigrants and veterans. Finally, the Commission will consider the role of the Department of Consumer Affairs in occupational licensing. At the hearing, the Commission will first hear from representatives of the California Nurses Association and the Professional Beauty Association, who will discuss the need for occupational licensing. An industry leader then will discuss the importance of licensing to the interior design industry. The next panel features senior staff attorneys for the National Employment Law Project and A New Way of Life Reentry Project, who will discuss the challenges former offenders face while attempting to become licensed. The Commission then will break for a business meeting and lunch. After the break, the policy chair for IMPRINT and director of the Welcome Back Initiative will discuss the impact occupational licensing has upon immigrants. The regional state liaison from the Office of the Deputy Assistant Secretary of Defense, Military Community and Family Policy will discuss the implications licensing has for veterans and their spouses. The final witness will be the director of the Department of Consumer Affairs, who will discuss the department’s role in occupational licensing.

    There will be an opportunity for public comment at the end of the hearing. The Commission also encourages written comments. The Commission will hold its business meeting at approximately 11:30 a.m. in the Cathedral Room, on the 3rd Floor of City Hall in Culver City. Members of the public can also access the business meeting in Suite 805 of 925 L Street in Sacramento, or at Suite 899 of 1415 L Street in Sacramento.

    All public notices for meetings are on the Commission’s website, www.lhc.ca.gov. If you need reasonable accommodation due to a disability, please contact Commission Executive Director Carole D’Elia at (916) 445-2125 or littlehoover@lhc.ca.gov by Wednesday, March 23, 2016.

    Video
  • February 4
    2016
    Occupational Licensing
    9:30 a.m., State Capitol, Room 437, Sacramento, CA
    Public Hearing
    Agenda

    AGENDA

    Public Hearing on Occupational Licensing
    Thursday, February 4, 2016, at 9:30 a.m.
    State Capitol, Room 437
    Sacramento, CA 


    Opening Remarks

    The Economic Links Between Occupational Licensing, Employment, Wages, Prices, and the Quality and Availability of Services

    1. Morris Kleiner, Ph.D., Professor, Humphrey School of Public Affairs, University of Minnesota (Written Testimony)
       

    The Impact of Occupational Licensing on Innovation, Entrepreneurship and Upward Mobility

    1. Dick Carpenter II, Ph.D., Director of Strategic Research, Institute for Justice (Written Testimony)
       
    2. Jason Wiens*, Policy Director in Research and Policy, Ewing Marion Kauffman Foundation (Written Testimony)

    *Mr. Wiens was unable to attend the hearing in person.


    Protecting the Public Interest

    1. Robert Fellmeth, Executive Director, Center for Public Interest Law, University of San Diego (Written Testimony)


    Legislative Sunrise and Sunset Review

    1. Le Ondra Clark Harvey, Ph.D., Chief Consultant, Assembly Committee on Business and Professions (Written Testimony)
       
    2. Sarah Mason, Consultant, Senate Committee on Business, Professions and Economic Development (Written Testimony)
       

    Public Comments

    Public Notice

    PUBLIC NOTICE

    FOR IMMEDIATE RELEASE
    February 3, 2016

    For Additional Information Contact:
    Carole D’Elia, Executive Director
    (916) 445-2125

    Notice of Meeting
    (Revised Witness List) 

    On Thursday, February 4, 2016, the Little Hoover Commission will conduct a public hearing on occupational licensing in California. The hearing will begin at 9:30 a.m. in Room 437 of the State Capitol in Sacramento.

    At this introductory hearing, the Commission will examine the economic linkages between occupational licensing and consumer prices, wages and employment and service quality and availability. Commissioners also will learn about the effects of occupational licensing on upward mobility, entrepreneurship and innovation. Finally, the Commission will consider the nexus between public interest and occupational licensing, and the legislative sunrise and sunset review processes that govern occupational licensing in California. At the hearing, the Commission will first hear from Dr. Morris Kleiner, from the University of Minnesota, who will discuss the economic impacts of occupational licensing. The director of strategic research for the Institute for Justice then will discuss how occupational licensing affects upward mobility. Following them, to speak to protecting the public interest, will be the executive director of the Center for Public Interest Law at the University of San Diego. The final panel will feature consultants from the state’s Assembly Business and Professions Committee and the Senate Business, Professions and Economic Development Committee. They will discuss the mechanics of the sunrise and sunset review processes.

    There will be an opportunity for public comment at the end of the hearing. The Commission also encourages written comments. Immediately following the hearing, the Commission will hold a business meeting in in Room 175 at 925 L Street in Sacramento.

    All public notices for meetings are on the Commission’s website, www.lhc.ca.gov. If you need reasonable accommodation due to a disability, please contact Commission Executive Director Carole D’Elia at (916) 445-2125 or littlehoover@lhc.ca.gov by Thursday, January 28, 2016.

    Video
Print 
		Agenda
  • June 23
    2016
    Occupational Licensing
    1:00 p.m.–3:00 p.m., BMG Conference Room, Lower Level, 925 L Street
    Roundtable Discussion
    Agenda

    AGENDA

    Roundtable Discussion on Occupational Licensing
    Thursday, June 23, 2016, 1:00 p.m. – 3:00 p.m.
    BMG Conference Room
    Lower Level, 925 L Street
    Sacramento, CA 


    Meeting Goals: To understand the feasibility of implementing potential recommendations being considered for the Little Hoover Commission’s occupational licensing study.

    1:00 – 1:15 p.m.

    Welcome
    Pedro Nava, Chair, Little Hoover Commission

    Opening Remarks
    Assemblymember Rudy Salas, Chair, Assembly Committee on Business and Professions

    Introduction to Study
    David Beier, Subcommittee Chair, Little Hoover Commission

    Study Process and Purpose of the Roundtable
    Carole D’Elia, Executive Director, Little Hoover Commission

    1:15 – 3:00 p.m.

    Discussion: Policymakers will discuss potential recommendations developed by the Little Hoover Commission over the course of its occupational licensing study process. These will include ideas about occupational regulation review, data collection, rulemaking and policy adjustments to make it easier for separating service members, military spouses, foreign-trained workers and former offenders to obtain license while still protecting public health and safety.

    There will be an opportunity for public comment at the end of the roundtable. Please notify Commission staff if you would like to make a comment.

    Public Notice

    PUBLIC NOTICE

    FOR IMMEDIATE RELEASE
    June 13, 2016

    For Additional Information Contact:
    Carole D’Elia, Executive Director
    (916) 445-2125

    Notice of Meeting

    On Thursday, June 23, 2016, the Little Hoover Commission will convene a roundtable meeting to discuss occupational licensing. The meeting will begin at 1:00 p.m. in the BMG Conference Room in the lower level at 925 L Street, Sacramento, CA 95814. The discussion will explore the feasibility and ramifications of potential Commission recommendations on occupational licensing, including review, data collection, rulemaking and policy adjustments.

    All public notices for meetings are on the Commission’s website, www.lhc.ca.gov. If you need reasonable accommodation due to a disability, please contact Carole D’Elia at (916) 445-2125 or littlehoover@lhc.ca.gov by Thursday, June 16, 2016.

  • March 30
    2016
    Occupational Licensing
    9:30 a.m., Mike Balkman City Council Chambers, City Hall, 9770 Culv
    Public Hearing
    Agenda

    AGENDA

    Public Hearing on Occupational Licensing
    Wednesday, March 30, 2016, at 9:30 a.m.

    Mike Balkman Council Chambers, City Hall, 9770 Culver Blvd. 
    Culver City, CA 


    Opening Remarks

    The Licensees’ Perspective 

    1. Jane Schroeder, Regulatory Policy Specialist, California Nurses Association (Written Testimony)
       
    2. Myra Irizarry Reddy, Government Affairs Director, Professional Beauty Association (Written Testimony)
       

    Why an Industry Wants To Be Licensed

    1. Deborah Davis, President & CEO, Deborah Davis Design (Written Testimony)
       

    Licensing Former Offenders

    1. Michelle Natividad Rodriguez, Senior Staff Attorney, National Employment Law Project (Written Testimony)

    2. CT Turney, Senior Staff Attorney, A New Way of Life Reentry Project (Written Testimony)


    Break for Business Meeting and Lunch: 11:30 a.m. – 12:30 p.m.

    Licensing Immigrants

    1. José Ramón Fernández-Peña, MD, MPA, Associate Professor, Health Education, San Francisco State University; Policy Chair, IMPRINT; Director, Welcome Back Initiative​​​​​​ (Written Testimony)


    Licensing Veterans and Military Spouses

    1. Laurie Crehan, Ed.D., Regional State Liaison, Southwest, Office of the Deputy Assistant Secretary of Defense, Military Community and Family Policy (Written Testimony)
       

    The Role of the Department of Consumer Affairs in Occupational Licensing

    1. Tracy Rhine, Chief Deputy Director, Department of Consumer Affairs (Written Testimony)


    Public Comments

    Public Notice

    PUBLIC NOTICE

    FOR IMMEDIATE RELEASE
    March 16, 2016

    For Additional Information Contact:
    Carole D’Elia, Executive Director
    (916) 445-2125

    Notice of Meeting

    On Wednesday, March 30, 2016, the Little Hoover Commission will conduct a public hearing on occupational licensing in California. The hearing will begin at 9:30 a.m. in the Mike Balkman Council Chambers of the City Hall located at 9770 Culver Blvd. in Culver City.

    This is the Commission’s second hearing on occupational licensing. At this hearing, the Commission will examine occupational licensing from the perspective of the people affected by it. The Commission will hear from licensees and a representative of an industry trying to become licensed about the health, safety and accountability provided by licensing. The Commission will then hear about the impact of occupational licensing on job seekers, including former offenders, immigrants and veterans. Finally, the Commission will consider the role of the Department of Consumer Affairs in occupational licensing. At the hearing, the Commission will first hear from representatives of the California Nurses Association and the Professional Beauty Association, who will discuss the need for occupational licensing. An industry leader then will discuss the importance of licensing to the interior design industry. The next panel features senior staff attorneys for the National Employment Law Project and A New Way of Life Reentry Project, who will discuss the challenges former offenders face while attempting to become licensed. The Commission then will break for a business meeting and lunch. After the break, the policy chair for IMPRINT and director of the Welcome Back Initiative will discuss the impact occupational licensing has upon immigrants. The regional state liaison from the Office of the Deputy Assistant Secretary of Defense, Military Community and Family Policy will discuss the implications licensing has for veterans and their spouses. The final witness will be the director of the Department of Consumer Affairs, who will discuss the department’s role in occupational licensing.

    There will be an opportunity for public comment at the end of the hearing. The Commission also encourages written comments. The Commission will hold its business meeting at approximately 11:30 a.m. in the Cathedral Room, on the 3rd Floor of City Hall in Culver City. Members of the public can also access the business meeting in Suite 805 of 925 L Street in Sacramento, or at Suite 899 of 1415 L Street in Sacramento.

    All public notices for meetings are on the Commission’s website, www.lhc.ca.gov. If you need reasonable accommodation due to a disability, please contact Commission Executive Director Carole D’Elia at (916) 445-2125 or littlehoover@lhc.ca.gov by Wednesday, March 23, 2016.

    Video
  • February 4
    2016
    Occupational Licensing
    9:30 a.m., State Capitol, Room 437, Sacramento, CA
    Public Hearing
    Agenda

    AGENDA

    Public Hearing on Occupational Licensing
    Thursday, February 4, 2016, at 9:30 a.m.
    State Capitol, Room 437
    Sacramento, CA 


    Opening Remarks

    The Economic Links Between Occupational Licensing, Employment, Wages, Prices, and the Quality and Availability of Services

    1. Morris Kleiner, Ph.D., Professor, Humphrey School of Public Affairs, University of Minnesota (Written Testimony)
       

    The Impact of Occupational Licensing on Innovation, Entrepreneurship and Upward Mobility

    1. Dick Carpenter II, Ph.D., Director of Strategic Research, Institute for Justice (Written Testimony)
       
    2. Jason Wiens*, Policy Director in Research and Policy, Ewing Marion Kauffman Foundation (Written Testimony)

    *Mr. Wiens was unable to attend the hearing in person.


    Protecting the Public Interest

    1. Robert Fellmeth, Executive Director, Center for Public Interest Law, University of San Diego (Written Testimony)


    Legislative Sunrise and Sunset Review

    1. Le Ondra Clark Harvey, Ph.D., Chief Consultant, Assembly Committee on Business and Professions (Written Testimony)
       
    2. Sarah Mason, Consultant, Senate Committee on Business, Professions and Economic Development (Written Testimony)
       

    Public Comments

    Public Notice

    PUBLIC NOTICE

    FOR IMMEDIATE RELEASE
    February 3, 2016

    For Additional Information Contact:
    Carole D’Elia, Executive Director
    (916) 445-2125

    Notice of Meeting
    (Revised Witness List) 

    On Thursday, February 4, 2016, the Little Hoover Commission will conduct a public hearing on occupational licensing in California. The hearing will begin at 9:30 a.m. in Room 437 of the State Capitol in Sacramento.

    At this introductory hearing, the Commission will examine the economic linkages between occupational licensing and consumer prices, wages and employment and service quality and availability. Commissioners also will learn about the effects of occupational licensing on upward mobility, entrepreneurship and innovation. Finally, the Commission will consider the nexus between public interest and occupational licensing, and the legislative sunrise and sunset review processes that govern occupational licensing in California. At the hearing, the Commission will first hear from Dr. Morris Kleiner, from the University of Minnesota, who will discuss the economic impacts of occupational licensing. The director of strategic research for the Institute for Justice then will discuss how occupational licensing affects upward mobility. Following them, to speak to protecting the public interest, will be the executive director of the Center for Public Interest Law at the University of San Diego. The final panel will feature consultants from the state’s Assembly Business and Professions Committee and the Senate Business, Professions and Economic Development Committee. They will discuss the mechanics of the sunrise and sunset review processes.

    There will be an opportunity for public comment at the end of the hearing. The Commission also encourages written comments. Immediately following the hearing, the Commission will hold a business meeting in in Room 175 at 925 L Street in Sacramento.

    All public notices for meetings are on the Commission’s website, www.lhc.ca.gov. If you need reasonable accommodation due to a disability, please contact Commission Executive Director Carole D’Elia at (916) 445-2125 or littlehoover@lhc.ca.gov by Thursday, January 28, 2016.

    Video