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United States: THE LATEST: Occupational Licensing—Do We Need To Protect "The Public From Rogue Interior Designers Carpet-Bombing Living Rooms With Ugly Throw Pillows?"
The Federal Trade Commission (FTC) has looked at licensing
boards many times in the past and advocated for regulations with
less restriction that promote competition. There are numerous
examples of antitrust regulators' interest in occupational
licensing and competition concerns, including
Advanced Practice Registered Nurses in the VA,
non-lawyers in the provision of legal services, and
dental regulatory boards. Acting Chairman Maureen
Ohlhausen recently gave a speech at the Antonin Scalia
Law School addressing economic liberty, including a critique of
occupational licensing where she stated, "I challenge anyone
to explain why the state has a legitimate interest in protecting
the public from rogue interior designers carpet-bombing living
rooms with ugly throw pillows."
WHAT HAPPENED:
Acting Chairman Ohlhausen reiterated her view that occupational
licensing inhibits economic liberty. "Market dynamics will
naturally weed out those who provide a poor service, without danger
to the public. For many other occupations, the costs of added
regulation limit the number of providers and drive up prices.
These costs often dwarf any public health or safety need and may
actually harm consumers by limiting their access to beneficial
services."
In the 1950s, less than five percent of jobs required a
license. Today, approximately 25 to 30 percent of jobs require a
license.
Different states regulate different occupations, and licensing
requirements for the same occupations often vary significantly
among states.
In her speech, Acting Chairman Ohlhausen said she is creating
an Economic Liberty Task Force within the FTC. This task force will
focus on occupational licensing regulations.
WHAT THIS MEANS:
We will likely see an increase in FTC actions involving
licensing boards, such as in North Carolina Dental, where
it is not the state itself acting but self-interested active market
incumbents who impose occupational licensing requirements that
limit competition.
The FTC Task Force will seek to "eliminate and narrow
overbroad occupational licensing restrictions that are not narrowly
tailored to satisfy legitimate health and safety goals."
The FTC will help states identify problematic occupational
licensing and reforms that promote reciprocity among states. We
could see a roll back of occupational regulations.
Licensing boards and those who are involved in licensing
regulations should examine the ways in which the regulation affects
or could affect competition, whether there is evidence that a
regulation is necessary to achieve the targeted policy goal,
whether the regulation is narrowly tailored to meet the policy
goal, and whether a less restrictive alternative is available to
achieve the policy goal and benefit competition.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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