Missouri’s universal reciprocity regime allows most licensed professionals from other states to have licensing requirements waived when they relocate to the Show-Me State. But what happens when a professional moves to Missouri from a state that does not license their occupation at all?

Senate Bill 1233 creates a new pathway for those individuals. Specifically, it offers a temporary license to individuals with at least three years of work experience in an occupation or profession in states that do not require a license.

For example, Missouri is one of 31 states that requires a license to work as a sign-language interpreter. Without SB 1233, if a sign-language interpreter with three years or more of experience from one of the 19 states (and the District of Columbia) that don’t require licensing moved to Missouri, they would have to spend the time and money to acquire a license before they could work here.

This bill would allow experienced professionals to continue working while pursuing a permanent Missouri license.

There are still additional improvements that can be made in occupational licensing. For example, in the licensing reciprocity process, relevant oversight bodies can still wait up to six months to issue a waiver for an applicant. A six-month waiting period is far too long.

Every occupational license carries real costs, including the loss of time and income while waiting for approval. The central question in occupational licensing is whether these costs are justified by clear and demonstrable benefits to public safety or product quality.

SB 1233 lowers the costs for experienced professionals from license-free states. It also lowers barriers to entry, which can increase the supply of professionals in different sectors and place downward pressure on prices for consumers. Missouri policymakers should continue to evaluate which existing licensing requirements function as legitimate safeguards and which function primarily as barriers to entry and work.

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Needless occupational licensing requirements make it harder for people to work in our state, and wait times for licensing waivers unnecessarily burden applicants.

The Solution

Periodic review of all licensing requirements, elimination of regulations without proven benefits to public safety or product quality, and reduction of the maximum time to receive an out-of-state licensing waiver.

Licenses Should Have Proven Benefits

Occupational licensing is the government giving someone permission to work in a certain field. Obtaining a license typically involves satisfying an educational requirement and paying a fee.

Most licensing laws are justified as public safety measures or as necessary to ensure the quality of the relevant service. However, there is little evidence that occupational licensing laws provide any benefit in this regard, as demonstrated by the Mercatus Center at George Mason University in a meta-analysis of 19 different studies directly related to licensing and product quality. In only 16% of included studies did researchers observe positive relationships between licensing and product quality.

Occupational licenses raise prices, impose higher barriers to entry, cost licensees time and money, and reduce innovation. Because of these costs, an occupational license should provide a proven benefit to public safety or product quality.

Issuing Waivers Efficiently

2020 marked the establishment of Missouri’s licensing reciprocity regime. Under current law, any person who has held a valid license issued by another state for at least one year can practice in Missouri at the same occupation or level with all Missouri licensing requirements waived.

However, the relevant oversight body can wait up to six months to issue a waiver to an applicant. A worker considering relocation to Missouri might not be able to wait half a year before starting work in the profession in which they’ve been trained. This delay puts applicants in a bind: Either wait for a waiver during this extended period or meet the Missouri licensing requirements so they can work. This reality may dissuade individuals from relocating to Missouri entirely.

Missouri provides an expedited licensing timeline for qualified spouses of law enforcement officers and members of the military. This is a step in the right direction, but all professionals seeking work in Missouri should have their applications reviewed in a timelier manner.

Key Facts

• Five percent of the U.S. workforce was licensed through state laws in 1950. In 2024, 22% are licensed.

• In Missouri, it only takes an estimated 26 days of education and experience to become an EMT, but 175 days to become a makeup artist.

Sunset Reviews for Occupational Licenses

Many licenses are created and then exist for years without scrutiny. Not all licenses justify the costs they impose; in fact, Missouri has eliminated a number of unnecessary licenses, such as licenses for hair braiders. A sunset provision would bring attention to other outdated and unnecessary requirements, helping ensure that only those with proven benefits remain.

Reducing the burden of occupational licensing could create opportunities for workers and consumers, lower prices, and increase economic growth. Licensed occupations should be the exception, not the rule.

Policy Recommendations

• Establish a staggered sunset and review period for all professional licenses and licensing boards.

• Reduce the maximum waiver review time from six months to 45 days.

The post Occupational Licensing appeared first on Show-Me Institute.

The Institute for Justice’s report examines the debt and dropout rate of cosmetology students across the country, and the numbers are pretty shocking. To receive a cosmetology license in Missouri, one must complete 1,500 educational hours from an accredited cosmetology program. From the 2011–12 school year to the 2016–17 school year, the average cosmetology program cost $14,629 and students took on an average of more than $7,700 in federal student loans.

That’s not pocket change, but it’s even worse when earnings are considered. In Missouri, the median annual wage of a licensed cosmetologist in 2019 was $23,760. That’s slightly lower than the national average of around $26,000 for licensed cosmetologists and slightly higher than yearly earnings from a full-time minimum wage job. (For reference, earning Missouri’s minimum wage of $10.30 for 40 hours per week and 52 weeks per year equates to yearly earnings of $21,424.) And more than two thirds of students do not graduate on time, increasing their debt burden even more.

So much money is spent to fulfill a state educational requirement, but is that requirement even necessary? Occupational licensing is intended to protect the health and safety of consumers, but recent research indicates that only 25 percent of cosmetology training is health and safety training.

Occupational licensing increases costs to consumers, but the other side of that coin is often overlooked. Licensing requirements dramatically increase costs for the workers who must obtain that license to earn a living. This is especially true in cosmetology, where the costs are directly tied to licensing requirements, but this is also true no matter the cost or resulting wages. It’s time for legislators to reconsider these requirements, regulations, and boards that have burdened workers and consumers for too long. A sunset provision for occupational licenses would be a great step toward reducing burdens and costs for consumers and workers.

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According to a study released by the Mercatus Center, the Missouri Division of Professional Registration subjects 240 occupations to varying forms of licensure. This means that in Missouri, 21.3 percent of the workforce is licensed (with an additional 5.4 percent requiring certification).  

An earlier study conducted by the Institute for Justice examined 102 low- to moderate-income occupations and noted that Missouri requires a license for 31 of these occupations. Licensing requirements can be costly, both financially and in terms of time, and serve as a barrier to entry for job seekers.

The licensing requirements in Missouri also are not especially well matched with actual safety risks (like consumer health risks). As the Mercatus Center explains, “Occupations that are less likely to involve risk to the public are often more highly controlled than riskier occupations.” For example, Missouri requires emergency medical technicians (EMTs) to undergo 23 days of training while athletic trainers are required to undergo 1,460 days of training.

What can be done about excessive licensing? Show-Me Institute researchers have previously written about license reciprocity, but Missouri could also take a cue from its neighbor, Nebraska.

Nebraska is beginning a legislative review of all the state’s occupational licensing laws. The review will be carried out over the next five years with the ultimate goal of identifying less restrictive options for professional regulation (and identifying which professions need these regulations at all).

Reviewing each license and the options for reducing or eliminating licenses seems like a great place to start in reforming occupational licensing.

Missourians should be able to practice the profession of their choice without excessive barriers to entry. Instead of making it harder for people to work, shouldn’t we be removing unneeded roadblocks?

The post Missouri Should Follow Our Neighbor’s Lead and Review Occupational Licensing appeared first on Show-Me Institute.

Fortunately, the findings from a recent nationwide survey conducted by Gallup, the Strada Education Network, and the Lumina Foundation, suggest that a college degree isn’t necessarily the only thing that employers are interested in. Researchers looked at two types of credentials that can be earned without a college degree and measured their impact on the employability and the earning power of the people who earned them. The credentials studied were the following:

• Certificates “awarded by educational institutions for completion of professionally oriented courses that typically represent a year or less of work.”
• Certifications “awarded by independent bodies that verify specific skills and competencies through testing”

The survey looked at adults 18 to 65 years old who had no postsecondary degree and compared those who had earned a certificate/certification with those who had not. The results suggest that earning a credential offers some real benefits in terms of employment rate and income.

It’s important to note that the study involved subjects of widely varying educational levels. Some had been to college (but hadn’t earned a 4-year degree), while others hadn’t completed high school. Those who hadn’t finished high school are overrepresented in the non-credentialed group, while those who had gone to vocational/technical school are overrepresented in the credentialed group. This means that we can’t easily separate the effect of the credential from the effect of the amount of education a participant has had.

However, the study also found a benefit to having a credential among low-, middle-, and high-income earners:

There’s strong evidence that educational programs that result in students earning these certifications provide real benefits, but what does that mean for Missouri?

It could mean a lot, especially with respect to prioritizing needs when allocating the money Missouri spends on education. Credentialing programs appear to offer a positive return to students on the money invested in them. So why can’t these programs capture the imaginations of the public (and of policymakers) in the way that things like pre-K programs do—even though the case for the long-term benefits of pre-K is anything but ironclad?

Nothing against imagination, but when making spending decisions, policymakers are better off being guided by the facts. Although this survey covered adults aged 18 to 64, investing in high schoolers so they can earn industry-recognized credentials could help students leave high school qualified to enter the Missouri workforce immediately. In this case, the facts are lining up behind credentialing programs as a possible way to help Missouri’s workers and employers alike.

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In many cases, the “right” credential to have coming out of high school is an industry-recognized credential (IRC). You earn it by passing an exam that is designed not by your school, but by a professional trade organization. There’s nothing wrong with earning a CTE certificate from your school; it can reflect a broad competence in the skills required for a given profession. But an IRC indicates mastery of knowledge specifically chosen by employers who have jobs to fill. It only makes sense that schools should encourage students to earn the credential that their potential employers want them to have.

The graphic at the top of this post shows just a few of the career options that can open up for students who earn an IRC. Others include (but aren’t limited to) education, culinary arts, business, graphic design, and hospitality. Fewer than 3 percent of Missouri high school students earned an IRC in 2017. Moreover, out of 27,437 students who completed three or more CTE classes during the 2016–2017 school year, only 8,565 earned IRCs. Employers are bending over backwards to tell us what students need to learn in order to get hired; shouldn’t we listen to them?

Listen to the podcast.

IRC infographic-1.pdf

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Business Licenses

Per City Ordinance (Chapter 110), anyone doing business in the City of St. Charles must have a business license issued by the City of St. Charles. This includes:

• All businesses with a St. Charles address
• Residents working from their homes
• Out-of-city businesses such as contractors, sub-contractors, delivery businesses, etc.
• All professionals

There is just one problem with these statements; they aren’t accurate. First, there are several occupations commonly considered “professionals” that state law specifically excludes from local licensing requirements. Lawyers, CPAs, doctors, dentists, and several other professionals are exempt from local business license fee requirements.

Furthermore, there are other types of “out-of-city” businesses that are exempt from licensing fees unless they fit the first example and have a specific city address. While the examples detailed on the website (contractors, etc.) are correct, other businesses, such as insurance brokers and engineers, are exempt from local licensing unless they have an office in St. Charles.

I bet there are a lot of cities requiring the same thing, and attempt to collect business license fees from firms that don’t know they are exempt. Does the typical land surveyor know he or she is exempt from having a business license? Perhaps. I bet it is less that cities attempt to collect the license fee from exempt businesses as much as they allow people from firms that don’t know better to pay for the license without telling them otherwise.

Is it possible that city officials tell those who are exempt from local licenses that they are so exempt when they arrive to pay for the license? Sure, but that is putting a lot of faith in individual employees to correct the misstatements on the website.  

The city of Saint Louis does a good job of displaying a link to the exemptions on the website of the license collector. St. Charles, and probably many other cities, could stand to take a (web)page from that. I am a big fan of the new mayor of St. Charles. Hopefully, her new administation can correct this soon.

The post St. Charles Collecting Business License Fees It Is Not Authorized To Collect appeared first on Show-Me Institute.

All the standard justifications for licensing were used: Higher standards would be good for the industry, would lead to increased public respect, would bring more profits for current practitioners, etc. In most cases, for most industries, those reasons are totally bogus. In the case of private investigators, however, I can see some merit in licensure.

The lifeline of the private investigation industry is access to information. In the Internet age, information is all around us, but some of it is still restricted. Consider driver licensing or credit bureau information. Both of them are imperative to the investigation industry; they contain obvious key information needed for finding people, etc. If you allow some people access to that information, I can understand that you would want to know who has access to it and who is using it, in case they start to abuse it. It is really just a modern technology version of the logic Milton Friedman used to support registration of taxicabs.

I can understand the arguments some readers might make, that private investigators should not be able to access information like that in the first place, license or no license. So why not just prevent access altogether and get rid of licensing rules at the same time? I can agree with that in part, but I don’t like the implicit assumptions that only agents of the government (including lawyers, as members of the bar) get to have access to certain information. Obviously, you can’t be giving out that information to everyone, either, so I admit I don’t quite know where to draw the line.

In reading the rules of private investigator licensing in Missouri, they appear to have left out the worst excesses of licensing. They don’t appear to have placed any limit on the number of licenses, or instituted any extreme education or experience requirements. However, that same lack of explicit guidelines might allow the board too much discretion in rapidly approving ex–law enforcement officials (who, for obvious reasons, make up the bulk of the labor pool in this field), while rejecting applicants without law enforcement backgrounds. I hope that does not happen. Those are decisions that clients and markets should make.

The fees for the application process are high, which is probably intentional. Not high as in law school high, but still high. Often, licensing rules are designed to help the current practitioners by reducing part-time competition. A $500 application fee might not deter anyone who wants to do the job full-time, as a career, but it may well be high enough to prevent someone from applying who is looking to do it part-time. The fact that the fee is only $50 if you want to be an employee of an existing agency tells me the same thing, and I don’t think it is proper for government to be making those decisions.

P.S. — Thanks to Combest for the story link, and our thoughts go out to John on the recent passing of his father.

The post Private Investigators Can Go to Jail if They Don’t Get Their Licenses appeared first on Show-Me Institute.

Zip’s topic a few days ago was the issue of prisoners re-entering society after serving their sentences. (Thanks to Combest for the link.) This is a topic I’ve been interested in from a licensing perspective, because many licensed professions and trades forbid ex-convicts from entering. To give but one example, you can’t sell real estate in Missouri if you are an ex-convict.

Some people are attempting to change the common practices of preventing ex-prisoners from entering many professions, some of which are well suited for ex-cons. Zip thinks we should give ex-prisoners a little money when they leave the big house. He may be right, but it would be far better for Missouri and other states to make it easier for them to enter whatever profession they are best suited for, and eliminate licensing restrictions from many professions.

Note that I said “many” professions, not “every” profession. Limitations that directly relate certain crimes to certain jobs would still make sense in many instance; i.e., convicted child molesters should still be forbidden from working in schools.

The post One Way to Help Former Convicts in Missouri appeared first on Show-Me Institute.

The law is one field for which I support some level of licensure. In my opinion, though, that licensure should begin and end with the bar exam. If you can pass the bar exam without attending law school, I see no reason why you should not be allowed to ply your trade. I can’t imagine there would be any reputable firms, nor many clients, that would want to hire someone with that kind of limited background. Yes, I think people who want to be lawyers should go to law school, but that would be a perfectly reasonable decision for competitive legal markets, rather than a rationale for intervention by state laws.

(Also, the thought of someone just becoming a lawyer out of the blue could make for a whimsical “fish-out-of-water” story about a urban lawyer definding his cousin in a rural community. The possibilities are endless. …)

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