Iowa has a lot to be proud of, but we’ve fallen behind our neighbors when it comes to knocking down barriers to economic opportunity.
A major culprit: overly burdensome occupational licensing laws.
When our representatives gather in Des Moines later this month, reforming these laws should be near the top of their agenda.
Let’s say you want to become a massage therapist. To be licensed in our state, you’ll need 600 hours of education and will have to pay $120 just to apply. On top of that, every time you need to renew your license, you’ll have to pay another $120. Just across our northern border in Minnesota, none of this applies because you don’t need a license at all.
In the same vein, if you want to be licensed as a dental assistant in Iowa, you’ll need six months of experience as a dental assistant trainee, to graduate from an accredited dental assisting program, and to pass an exam (that you have to pay $250 to take). In our neighboring states (Illinois, Missouri, South Dakota, Nebraska, and Wisconsin), you won’t need to do any of this because, once again, you don’t need a license.
Are Iowans more difficult to massage than Minnesotans? Are our teeth tougher to clean than Illinoisans’ or Wisconsinites’?
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Perhaps our state has it right and our neighboring states are too lax. If this were the case, however, we might expect to see a rash of massage malpractice suits in Minnesota or massive tooth decay outbreaks in Nebraska. So far, we haven’t heard of either.
The unfortunate reality is that our state has some of the most needlessly onerous occupational licensing laws in the country. A November 2017 Institute for Justice study looked at 102 lower-income occupations in all 50 states and reported that Iowa required licenses for almost 70% of them, the seventh highest percentage in the nation, far above even the regulation-heavy states of New Jersey (52.9%) and New York (40.2%).
The burden of meeting these rules falls heaviest on those least able to afford them. This hinders thousands of Iowans’ ability to find work and incentivizes them to take their talents and move away to neighboring states with less-stringent laws.
Waterloo resident William Burt overcame a difficult past to become a licensed barber (which requires three years of education totaling nearly $20,000 in tuition plus lost wages, passing an exam, $345 to apply, and $300 to renew). Mr. Burt has been cutting hair at four different locations while investing time and resources into his own mobile barbershop business to fill an unmet need and reach underserved individuals in his own community.
Despite his years of hard work and thousands of dollars invested, Mr. Burt’s business is being stifled out of the gate because of an Iowa law that bans mobile barbershops. The ostensible reason is that mobile barbers pose a sanitation problem. But other states, including California, Georgia, Ohio, and all of our neighboring states, allow mobile hair cutting and cleanliness doesn’t seem to be an issue.
All told, the Institute for Justice found that licensing laws cost our state over 48,000 jobs and up to $4.6 billion in economic value.
That‘s tens of thousands of Iowans who could provide for their families and improve their quality of life. Hundreds of thousands of others would benefit from having more choices. The increased competition would lead to higher quality services and lower prices. It would be a win-win for Iowans both as workers and as consumers.
In May, we saw a limited licensing reform bill signed into law and we applauded that bill. We are also seeing legislative efforts to allow people like William Burt the chance to practice their craft in innovative ways. We urge our lawmakers to finish the job and remove arbitrary or unnecessary licensing requirements so that all Iowans can pursue their dreams.
Drew Klein, of West Des Moines, is state director of Americans for Prosperity-Iowa.