New Ohio Law Takes Aim At Occupational Licenses, Which Cost State $6 Billion

Signed by Ohio Gov. John Kasich on Friday, SB 255 dramatically reforms the state’s occupational licensing laws, which together have become one of the biggest barriers to job creation and upward mobility in the Buckeye State.

Today, far more Ohioans are licensed (18 percent) than are unionized (11 percent), with over 935,000 Ohio workers needing a license to do their jobs. Many of Ohio’s licenses are burdensome, especially for lower-income workers. In Ohio, the average occupational license for a lower-income occupation requires $188 in fees, nearly a year of education and experience, and an exam. With that in mind, it should come as no surprise that licensing is a major drain on Ohio’s economy.

According to a recent Institute for Justice (IJ) report by Dr. Morris Kleiner, professor at the University of Minnesota’s Humphrey School of Public Affairs, and economist Dr. Evgeny Vorotnikov, Ohio’s licensing laws result in almost 68,000 fewer jobs and more than $6 billion in “misallocated resources.” In addition to lower economic output due to licensing, the latter figure accounts for time and money wasted trying to comply with licensing requirements that may be excessive or unnecessary as well as for the lost potential of people who would work in a given occupation if not for licensing.

Nationwide, licensing laws cost the economy nearly 2 million jobs and up to $184 billion. Such staggeringly high costs are also why licensing reform is one of the very few issues where both the Obama and Trump administrations have found common cause.

Read more of this Forbes article by Nick Sibilla by Clicking Here.