Both policy makers and economists have detailed the problems with occupational licensing in the American labor market. Right now, there are hundreds of industries that require anyone in that industry to have a certain kind of license. For example, if you go get a haircut or even just a manicure, the person who is giving you that haircut or manicure have to take courses and get a license. The reasoning behind these licenses is clear: they are intended to prevent unskilled people from setting up a business and charging people money for services they are not really qualified to perform.
It has become, however, a labyrinthine system, with licenses required for occupations that likely should not require them and difficult and/or expensive systems in place for obtaining those licenses. Most people agree that cutting down on the number of licenses requires or the process for getting those licenses would likely help the economy and that right now, this entire system has become a burden on the US job market. Most of the discussion around occupational licenses has been about how they harm the economy, and not about whether or not they are beneficial to the people who hold those licenses. So, are they beneficial? The short answer: yes.
Almost across the board, the earnings of people who have one of these licenses is much higher than people of the same education level who do not have an occupational license. Only those with an advanced degree make more without an occupational license than those with both an advanced degree and license. The average worker with one of these licenses makes a little more than $1000 per week, while the individual without that license makes just under $800 during that same week. While these numbers are reflective of the fact that there are some medical and professional occupations that require a license in addition to a degree, it is hard to ignore the overarching statistic: those with these licenses make more money than those who do not have them.
Even someone who only has a high school degree, but also has an occupational license can earn more than someone who has an associate’s degree, but does not have one of these licenses. For those with bachelor’s degrees, there is very little difference in the weekly wages of someone who doesn’t have one of these licenses and someone who does, further reinforcing the idea that having a bachelor’s degree is very important when it comes to finding a high-paying job.
An individual who has not completed high school but does have some kind of occupational license can make about as much as someone who has graduated from high school and is working in a field where a license is not required. This data, on a whole, shows that occupational licenses provide increased earning opportunities for individuals who have not had the opportunity to attend a university and get a degree.
There is another significant set of statistics that prove that while the process of giving out these licenses might be a burden on the economy, the licenses themselves improve the lives of those who have them. Across the board, the rates of unemployment for individuals who have an occupational license is much lower than for those who do not. For an individual who has a certificate and a high school education, the unemployment rate is only 5.1%. Those with the same education level and no license have an unemployment rate of more than 8%.
Nearly a quarter of all jobs today require one of these licenses. This means that there is a lot more regulation required and that there are jobs you could get fifty years ago that did not require any additional training or schooling, which you now would have to get special training in order to be qualified for. And while you definitely want your surgeon to have the proper license, you might not really care if your interior designer has a license (though they are required to have one). This isn’t all bad, however, especially considering the fact that many of these licenses can be obtained and maintained online.
It’s difficult to argue that there are not very real benefits to this kind of training and education. Any kind of advanced education makes it easier to make more money and even just to find a job. The ability to take online classes and receive a certificate for those studies makes it simple for someone to get the qualifications they need to find a better job and make more money.