Want More Jobs? Remove Barriers to Job Creation

From today's WSJ, an excellent editorial by Chip Mellor and Dick Carpenter, both of the Institute for Justice, about excessive occupational licensing at the state level:

"With the abysmal recent jobs report, it's tempting to point to flat hiring as another example of the federal government's impotence at stimulating growth. Lost amid the hand-wringing and focus on Washington, D.C., however, is the unhelpful role of state governments in making joblessness worse.

Their harmful method is occupational licensure. By imposing onerous and usually pointless requirements on those wishing to enter a trade or line of work, state legislatures erect needless barriers around occupations perfectly suited for those entering the work force, midcareer switchers, and pink-slip recipients. Only one in 20 workers needed the government's permission to pursue their chosen occupation in the 1950s, notes University of Minnesota Prof. Morris Kleiner. Today that figure is nearly one in three (see chart above from a related February 2011 front page WSJ article "A License to Shampoo: Jobs Needing State Approval Rise").

The Institute for Justice is examining the licensing requirements of 100 occupations across all 50 states and the District of Columbia. The occupations are those that pay less than the median income and are sufficiently established to be recognized by the Bureau of Labor Statistics. What we have found paints a stupefying picture of irrational regulation with pernicious effects. 

Conclusion: Instead of looking to the federal government to create jobs, state legislatures could have a real and immediate effect on unemployment in their states by showing how less truly is more. They can remove the barriers to job creation that their predecessors erected and enjoy the job-generating drive of their states' aspiring entrepreneurs."