The Problem:

Iowa ranks as the 12th most broadly and onerously licensed state, making it one of the worst states for occupational licensing for lower-income workers.

ITR Solution:

Reevaluate and reduce the bureaucratic red tape tax that is job licensing.

Work Left to Do:

Let your legislators know reducing these barriers can lead to job creation, more entrepreneurial opportunities, lower prices, and increased incomes.

Cut the Bureaucratic Red Tape Tax That is Occupational Licensing

 

In our state, Governor Kim Reynolds, the Iowa Legislature, and business leaders are all attempting to find, develop, or recruit qualified workers.   One step that should be taken is to ensure that Iowans who want to pursue their careers are not held back by unnecessary red tape.  Existing job licensing requirements across numerous occupations are keeping good jobs out of reach for too many Iowans.

Existing job licensing requirements across numerous occupations are keeping good jobs out of reach for too many Iowans.

But that doesn’t have to be the case.  Iowans for Tax Relief wants to make economic freedom a reality for all Iowans.  While some oversight and licensing will always be necessary, the Hawkeye state may be going too far.  Since 2010, Iowa has remained below the national average in population growth. Until Iowa addresses the bureaucratic barriers for people to use their skills, serve others, and earn a living, we will continue to see people leave the state for opportunities elsewhere or simply choose to make their livings in other states over Iowa.

The good news is that not only are there multiple ways to cut through this red tape, but other states are already showing the way.

Licensing Review

Iowans who want to pursue a profession should be allowed the opportunity without unnecessary burdens, including excessive fees and inconsistent requirements that don’t make sense. Economic research has demonstrated that many requirements do not protect the public, but are instead a barrier to entry for new professionals, primarily supported by those who want to limit competition.

Our neighbors to the west, Nebraska, passed legislation in 2018 with the intent of:

        1. Reviewing all existing licensing requirements
        2. Repealing licenses that are not necessary to protect the health and safety of the public
        3. Modifying licensing laws that are not competitive
        4. Enacting sunset provisions so that all licensing laws are reviewed periodically
        5. Allowing workers with a criminal history the chance to pursue meaningful careers without automatic disqualification as long as there isn’t a threat to public safety

Universal Recognition

Sometimes also known as reciprocity, people moving into Iowa who already hold an occupational license from another state shouldn’t be required to spend more money and undergo more training to obtain their permission slip from the Hawkeye state. If someone is trained and certified in another state and they want to move to Iowa, they should be welcomed with open arms as we try to fill the tens of thousands of open positions within our borders.

Pennsylvania’s Governor signed universal recognition into law in the Keystone state in 2019 and touted its benefits by saying:

“This new law will reduce barriers for new Pennsylvanians to work here and shows this is a land of opportunity…it’s another important step to improve the occupational licensing process while making the commonwealth a more attractive place for skilled workers and businesses.”

Fee waivers

Occupational licensing impacts low-to-middle income workers disproportionately.  In the second edition of their License to Work Study, research conducted by the Institute for Justice has concluded that, “Because Iowa licenses a relatively high number of the 102 occupations studied here- 71 - it ranks as the 12th most broadly and onerously licensed state, making it one of the worst states for occupational licensing for lower-income workers.”

Arizona addressed this issue by waiving licensing board fees for workers who are below 200% of the poverty level.  What would this mean to Iowa families?  With an average fee of $178 to obtain a license in Iowa, this means that working families have to choose between a government license or their weekly trip to the grocery store.

Reforms that ensure occupational licensing isn’t excessive or overly burdensome can lead to job creation, more entrepreneurial opportunities, increased incomes, and even reduced prices to consumers. The 2020 legislative session will provide Governor Reynolds and the legislature an opportunity to deliver these positive outcomes by cutting the bureaucratic red tape tax that is occupational licensing.

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