Trump signed a new executive order loosening occupational licensing restrictions around the country

Earlier this week, President Trump signed an executive order effectively loosening occupational licensing restrictions around the country. This marks a continuation of licensing efforts that have been enacted in some states, such as Arizona.

The Trump Administration recognizes the costs that come with restrictive licensing laws. As the Executive Order states,

Overly burdensome occupational licensing requirements can impede job creation and slow economic growth, which undermines our Nation’s prosperity and the economic well‑being of the American people. Such regulations can prevent American workers and job seekers from earning a living, maximizing their personal and economic potential, and achieving the American Dream.

To counter these negative impacts, the Executive Order aims

to reduce the burden of occupational regulations to promote the free practice of commerce, lower consumer costs, and increase economic and geographic mobility, including for military spouses.

What the Executive Order does

The order is mainly guided by six principles, all of which work to reduce licensing oversight or make the licensing process easier, especially for migrating populations. For instance, the order subjects “all recognized occupational licensure boards to the supervision of a designated government agency or office”.

Licensing boards usually hold autonomy over rulemaking and are rarely subject to any oversight in most states, allowing them to run amok. This would curb their monopoly power, especially if proposals by licensing boards become subject to review by other agencies.

The executive order also requires licensing boards and entities to ensure that they only

adopt and maintain the criteria and methods of occupational regulation that are least restrictive to competition, sufficient to protect consumers from significant and demonstrable harm to their health and safety.

All in all, while it would be preferable for such reform to be undertaken by Congress, as Executive Orders can be rescinded by future administrations, the recognition of the growth and damaging impact of occupational licensing laws at the federal level is welcome. It could potentially spur state efforts for reform.