Iowa: Look to Nebraska for Occupational Licensing Reform

Iowa’s policymakers and business leaders agree: the state’s economy needs more skilled workers. One area of regulatory reform state leaders should look at to address this problem is changing our occupational licensing requirements. Reducing onerous occupational licensing regulations in Iowa would expand economic liberty for those here, attract new workers into our state, and provide opportunities to enter the workforce for those who might currently be ineligible because of past criminal convictions. 

Reducing barriers for workers will help Iowa create a more competitive business environment. Combined with lower taxes, this would help level the playing field as we compete with surrounding states.

During the 1950s in America, about 1 of every 20 workers needed a state license in order to work. Today, that number is closer to 6 out of every 20. The Institute for Justice identifies Iowa as one of the states that both license a large number of occupations and impose more burdensome requirements than most other states. Many of our licensing requirements are imposed on workers who would not have to be licensed in other states.

In an editorial, The Des Moines Register made note of one industry that may be over-regulated in Iowa: barbers and hair stylists. The editorial called attention to the “ridiculously high 2,100-hour training requirement” for hair stylists, and reported that the cost of attending cosmetology school ranges “from $20,000 to more than $30,000”, which is more than attending a community college for two years. “No state mandates more hours, and most require significantly less. New York requires 1,000, and it’s doubtful the people in the Big Apple are suffering any more bad haircuts than people here,” the Register noted. The editorial went on to suggest that a better alternative would be for lawmakers to “abolish cosmetology licensing, and the industry can offer certification and training.” 

To put the cosmetology licensing hours into context, consider this, suggests The Register: to become a barber or stylist, one must “demonstrate 2,100 hours (roughly 490 days) of experience, while EMT’s need only demonstrate 110 hours (roughly 26 days) to become licensed.” In other words, those who are on the front lines of saving our lives are required to have only about 5% of the training that those who want to cut our hair have.

One argument made by those industries covered by licensure regulations is that licensing is needed to ensure the safety or well-being of the public. Although protecting the safety and health of citizens is a legitimate function of government, occupational licensing is not necessarily the only way to do that, and a balance must be struck between regulation and the liberty that comes with being able to pursue your occupational dreams without unneeded regulation.

Iowa should consider the occupational licensure reforms that their Nebraska neighbors recently implemented. Nebraska’s reform doesn’t suggest that all licenses should be repealed, nor does it mean recommending a “free-for-all” economy. The Nebraska model requires five-year sunset reviews of all occupational licenses (20 percent each year, rotating), by the appropriate legislative committees. 

The legislative committees are tasked with reviewing occupational regulations, and issuing a report that either “recommends ending, modifying, or maintain(ing) these regulations.” The review “must include information on the number of licenses issued or denied by the board being reviewed, an examination of the basic assumptions underlying the board’s powers, and a comparison of what other states do in similar occupations.”

The Nebraska legislation declares that an individual’s right to pursue work is a “fundamental right” and that the “state should use the least restrictive means to protect the public when regulating an occupation.”  The law also has a criminal justice provision, which allows those who have a criminal conviction to seek a pre-determination of whether their conviction would lead the board to reject the individual’s future application, thus reducing the risk that those who might spend the time and money on training—either while incarcerated, or post-incarceration—would find it to have been for nothing if they can’t get licensed.

Iowa should consider reforms similar to the reforms made by our Nebraska neighbors, and affirm that we seek to reduce barriers for those who seek to pursue an honest occupation, while providing adequate oversight of those licensing boards that are needed.