Free Enterprise

Bureaucracy Delays Workforce Entry

Michelle Thomas was eager to begin her career as a therapist in western Wisconsin, with a waiting list of patients seeking her services. However, the licensing process took longer than expected.

“I had heard about the delays, but I didn’t think it would take that long,” Thomas explained. Despite living in a rural area with few therapists available, bureaucracy surrounding licensure in her state still caused her to experience significant delays, which were frustrating and disheartening.

Stories like this are too frequently experienced. 

Receiving an occupational license is an arduous process. In order to become a licensed professional in many professions, individuals must overcome lengthy education requirements, experiential requirements, and pay hefty fees. These guidelines present large barriers for many eager professionals. 

When individuals do complete the licensing requirements, they are eager to begin their career and should be able to start quickly. But they are experiencing another setback. States nationwide are grappling with substantial occupational licensing application backlogs, often caused by significant events like the COVID-19 pandemic that strain bureaucratic systems.

Indiana is one such state experiencing these backlogs as a result of the pandemic. In 2021, applications for eager licensees were delayed weeks or even months. During this time, Indiana’s Professional Licensing Agency experienced an average of thirty-one days between the filing of an application and its processing.

In Wisconsin, there were also long wait times — nearly eighty days.  

Delays in the licensing process have real consequences that must be mitigated. Such consequences include:

  • Lost wages for licensing applicants,
  • Fewer workers in the labor market,
  • Less choices for consumers,
  • High costs for consumers,
  • Burnout of licensing agency workers, which leads to low retention rates and high turnover,
  • Less access to needed services (e.g., healthcare), and
  • A harder time filling labor shortage for small businesses.

States are combatting backlogs with a host of innovative solutions. However, one of the most effective solutions can be setting a maximum acceptable length of time for state agencies to process and issue decisions for individuals submitting occupational licenses. If an agency does not meet the processing deadline they set for submitting an occupational license, they are required to refund the licensing fee the applicant had to pay. 

This policy solution still allows various licensing agencies to fully review and process applications in a way that ensures those approved for licensure can perform their jobs safely and at a high level. However, this policy does keep officials accountable and aware of backlogs. 

States currently not facing large backlogs should still take note of the policies being implemented in states where these backlogs are present. It is nearly impossible to predict when an event triggering a backlog can arise. With this being the case, states, like Utah, should take pre-emptive action to ensure that backlogs in the licensing process do not become an issue and that the licensing process remains an efficient one.