Florida’s new law loosening licensing rules should inspire MN lawmakers
Onerous licensing requirements are a hindrance to workers in many states in the country, Minnesota included. That is about to change in Florida, however. Under a new law, called the Occupational Freedom and Opportunity Act, Florida will reduce or eliminates licensing requirements for multiple professions. This is one of the biggest licensing reforms ever undertaken by any state.
The Occupational Freedom and Opportunity Act
Through the newly instated rule, the state of Florida will no longer require licenses for jobs like
interior designers, labor representatives, boxing announcers and timekeepers, hair braiders, hair wrappers, body wrappers, nail polishers and painters and makeup applicators.
The new Act also
allows workers in some professions to easily transfer their out-of-state licenses to Florida and cuts down on the training required to receive or renew a license.
Heavy opposition from industry experts
Unsurprising, the law is facing opposition from industry experts, who claim that loosening laws will reduce quality and safety. Their fears are, however, unfounded as research evidence finds no significant link between quality and licensing.
A good example is an NBER paper that shows that occupational licensing plays no role in consumer satisfaction. Brynjolfsson, Farronato, Fradkin, and Larsen use data from an online labor market where people can hire home improvement professionals to see whether licensing status has an effect on consumer choice. They find licensing status has no effect on consumer choice, but
more stringent licensing regulations are associated with less competition and higher prices but not with any improvement in customer satisfaction as measured by review ratings or the propensity to use the platform again.
It’s, therefore, more likely that these industry experts are more interested in thwarting the competition that will come with less regulation.
Other states, like Minnesota, should take note
Applying for a license costs people time and money, and so does training. Numerous low-income individuals are kept out of lucrative professions due to onerous regulations. Florida’s move to eliminate or reduce licensing burden will save Floridians — especially low-income Floridians — time and money by making it easier and cheaper for them to get licenses.
The bill will also lower the cost of goods and services by expanding supply. Licensing regulations limit the supply of goods and services, thereby raising prices for consumers.
At a time when lockdowns have hurt the economy and workers, relaxing regulations is a good way to get workers back into the labor force.
Other states, especially Minnesota, need to take a lesson.