News Stream

Supreme Court ruling in NC Dental Board case fuels push for deregulation in professional licensing

It's become commonplace to hear that occupational licensing has led to a quagmire of over-regulation and excessive fees, with licensing boards more interested in their profession's well-being than protecting the public. Proponents of less regulation believe pro-competitive reform would reduce red tape for prospective licensees, lower barriers to job growth, and create more opportunities for entrepreneurs' businesses to bloom. Advocates for traditional professional regulation, on the other hand, defend it as necessary for many occupations in order to protect the public and ensure licensees are appropriately qualified to practice their profession. Some point out that deregulation proponents selectively highlight occupations with licensing requirements that seem blatantly excessive given the mundane obligations of the job, but their broader anti-regulation agenda could potentially target even regulation of professions like medicine, psychology, accounting, dentistry, and architecture.

At the center of the controversy is the state of Michigan, where an anti-regulation climate has taken hold. Michigan Governor Rick Snyder (R) has suggested many regulations that are in place are unnecessary, existing “only to provide commercial advantage to their advocates.”

Snyder’s “Office of Regulatory Reinvention” has moved to have dozens of fields completely deregulated, including respiratory care, acupuncture, consumer financial services consultants, dietitians and nutritionists, polygraph examiners, insurance solicitors, landscape architects, and speech pathologists.

The same office believes that 19 of the 24 regulated health professions in Michigan pay too much for their licenses, and the fix will require altering the fee structure and installing more efficient licensing mechanisms, such as online license renewal, longer periods between renewals, and elimination of “duplicative” tests.

Organizations like the Institute for Justice echo Snyder’s sentiments, and would like to see many occupations completely deregulated. The IFJ has filed numerous lawsuits, many of them successful, to challenge state barriers to offering services in hair-braiding, tour-guiding, equine dentistry, and other fields.

Interior design is one area the IFJ considers particularly over-regulated. In some states, interior designers are required to pass an exam, pay a fee, and obtain six years of education and apprenticeship to become fully licensed. This, despite research showing little payback in public safety, says IFJ.

Supporters of deregulation, on the other hand, lack strong data to show its benefits. Bruce Bartlett, an economist who worked in the Reagan administration, has said that the idea that job growth will occur from cutting regulations in areas like licensing was “Just made up,” the Huffington Post reports. The Congressional Budget Office has asserted that deregulation has no effect on job growth.

Landscape architects have been targeted for deregulation in Michigan, after a concerted effort just five years earlier led Michigan to join the 49 other states with licensing laws for the profession.

Marie Donigan, who served six years in the Michigan State House, cited her success in winning passage of licensure for landscape architects as one of the highlights of her legislative career. She maintains that landscape architecture entails much more than meets the eye, because landscape architects design all sorts of structures that could jeopardize public safety.

More potential deregulation is being considered at the national level. President Obama has proposed that states review their licensing requirements, particularly in obvious areas where overly stringent entry requirements don’t make a lot of sense.

But some observers note that deregulation of fields like respiratory care and speech pathology, as some competition fans have proposed, will likely prove much more controversial than deregulating hair-braiding, and will force lawmakers and the public to make hard decisions about where the line between competition and safety should be drawn.