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Obama’s war on excessive occupational licensing highlights his increasingly unfashionable brand of liberalism

You can’t just lease a storefront, hang a “neurosurgery practiced here” sign, and start slicing open people’s heads. To be a surgeon — or, indeed, a doctor of any kind — you need a license. The basic public health and public safety rationale for that is very clear.

But occupational licensing also applies these days to a variety of professions where the need for a special regulatory body is a less clear. A bad barber will, at worst, give bad haircuts and probably end up needing to find another line of work. And while licensing regimes can offer useful benefits in theory, they can also do some real harms in practice, since it’s tempting for insiders to use them to simply block competition. In many states, for example, dentists and doctors restrict what dental hygienists and licensed nurse practitioners are allowed to do to care for patients well beyond what studies show to be necessary.

What’s more, because licensing is generally done at the state level, it tends to create a fractured labor market. You might be allowed to do your job in New Jersey but not in Iowa, which makes it harder for you to move even if overall economic conditions suggest you’d have a better shot at earning a decent living in Des Moines.

As he looks toward the end of his term, Barack Obama is rolling out a series of initiatives to relax licensing rules. He knows he’s not going to pass transformative liberal ideas like comprehensive immigration reform or a carbon tax. So instead, he’s focusing on common sense, incremental reforms that make peoples’ lives better without raising any ideological red flags.

The Obama administration is trying to make licensing better

Libertarian groups have been raising a stink about these problems for a decade or more, and the Obama administration took up the torch a couple of years ago. Working with Congress, they got some money appropriated to help states work together to improve the situation. And late last week they announced the first grants to result from that appropriation.

The total amount of money involved is very modest, just $7.5 million, but it should be enough to ensure that state governments that want to take action to make it easier for people to move or switch jobs don’t face technical barriers.

Specifically, nonprofit groups working with consortia of three or more states will be able to get grants to:

  • Identify unnecessary licensing criteria to ensure that existing and new licensing requirements are not overly broad or burdensome and that they do not create unnecessary barriers to labor market entry; and
  • Improve portability and reciprocity provisions for selected occupational licenses across state lines. These provisions mean that states harmonize what is required to get a license and accept licenses from other states, rather than making workers meet additional requirements such as new training, assessments, or fees.

They are also claiming partial credit for a slew of state-level deregulatory initiatives and pointing to an April executive order that aims at ensuring that ex-convicts who’ve returned to civilian life aren’t unduly burdened in their ability to get jobs in licensed professions.

Obama’s unfashionable liberalism

These are not earth-shattering initiatives. They’re the kind of thing you get done in the eighth year of a presidential administration that’s dealing with a hostile Congress. But they are a nice little signpost of where Obama’s style of liberalism stands relative to the currents of populism and democratic socialism that are riding high on the left, as well as the free-market dogmatism that prevails in conservative circles in Congress.

Obama thinks the government regulates too little in some spheres (air pollution, for example) but too much in others.

And Obama thinks there are some significant social problems that can’t be laid at the feet of millionaires and billionaires. It’s generally pretty ordinary middle-class Americans who benefit from licensing cartels by using prior felony convictions to exclude ex-convicts from substantial portions of the labor market. Multimillionaire CEOs would probably be very glad to increase workers’ abilities to move from state to state and create a more efficient allocation of labor across the country.

But society as a whole suffers when people with criminal records can’t find gainful employment and reintegrate into society. And many individual workers would benefit enormously if their job skills were more geographically portable.

These are kind of banal points. But in an increasingly polarized and increasingly populist political climate, they aren’t points that many prominent people stand up for.

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