Occupational licensing reform will benefit millions of Americans

Chances are good that most of us know or know of someone who has a criminal record. According to the Bureau of Justice Statistics, as many as 100 million U.S. citizens have a criminal record. Those who are friends, family, or neighbors of these individuals are well aware of the unique set of challenges that previously convicted persons face when seeking employment.

In his book The New Scarlet Letter, Steven Raphael, an economist at the University of California in Berkeley, suggests that carrying a criminal record in the U.S. labor market is like being dubbed with a badge of infamy that forever brands these individuals with their past transgressions.

Research suggests that incarceration for a crime is associated with a 40 percent reduction in annual earnings. In addition to as many as 75 percent of the formerly incarcerated that are still unemployed one year after their release.

What can explain the association of criminal records with these unfavorable economic outcomes? The little-known labor market institution of occupational licensing is surely a contributing factor.

In 2015, the Bureau of Labor Statistics identified that more than 22 percent of U.S. workers are licensed. Occupational licensing laws require that individuals obtain a “permission slip” from the government to work. As part of this process, these individuals are forced to complete minimum levels of education and training, pay fees, and meet subjective “good moral character” requirements.

{mosads}Testimony prepared for the U.S. Senate in February 2016 on occupational licensing unveiled that 19 states do not currently have established standards for judging the relevance of a criminal conviction to a person’s ability to competently perform a licensed job. This means that in these states, it does not matter whether the crime committed relates to the position or not. Licensing boards have the authority to disqualify any individual with a criminal background from obtaining a license to work.

A report from the National Employment Law Project goes a step further and grades states based on the extent to which occupational licensing laws are restricting the employment of individuals with criminal records. Minnesota gets an exceptional grade. Nine other states that do not fare as well and effectively receive failing grades include Arizona, Delaware, Florida, Kentucky, Louisiana, Rhode Island, South Carolina, Utah, and Vermont.

As a result, individuals from these nine states that are striving to improve their lives and take part in the economy, quickly find themselves instead in a nightmare scenario — effectively barred from employment opportunities and facing limited hope of further opportunities.

Facing dimmed hope, in their vulnerable state the formerly incarcerated may regress and commit further crimes as acts of desperation. In fact, an analysis performed by Stephen Slivinsky suggests that states with the most burdensome licensing laws experienced a nine percent increase in recidivism from 1997 to 2007—more than six percentage points higher than states with the lowest licensing burdens.

Fortunately, some states have reconsidered their stance on these seemingly arbitrary restrictions on employment. In 2016, Illinois and Georgia both added standards that prevented licensing boards from broadly restricting entry based on criminal records last year. Kentucky may soon move closer to the head of the class with a proposal that would give individuals with criminal records the opportunity to obtain licenses to work in several professions.

As evidenced by the studies cited above, occupational licensing reform should not be a partisan issue. America is a country that believes in second chances. Let’s not allow occupational licensing laws to deny individuals that made a mistake earlier in their life an opportunity to achieve the American dream.

The Center for the Study of Occupational Regulation at Saint Francis University in Pennsylvania, is launching a comprehensive national database of occupational licensing laws that will provide policymakers with the tools to make well-informed decisions related to occupational licensing reform.

Edward J. Timmons is an associate professor of economics and director of the Center for the Study of Occupational Regulation at Saint Francis University in Loretto, Pennsylvania.

The views expressed by contributors are their own and are not the views of The Hill.