Free Enterprise

Universal Licensure Can Boost Economic Opportunities

Imagine you’ve spent years perfecting your craft, acquiring new skills, and building a thriving business in your home state. You want to take your expertise on the road, expand your customer base, and share your talent with new communities. But there’s just one problem: you need a new license to practice in every state you visit or move to. Welcome to the world of occupational licensing, where freedom of movement and professional growth are often at odds with bureaucratic red tape.

Occupational licensing, in certain instances, can be a great way to ensure quality standards in a particular field. However, it can also become a hindrance to professionals who wish to relocate or expand their businesses across state lines. This has become a major issue for many licensed professionals, including doctors, nurses, and cosmetologists, who find it difficult to practice their trade in a new state due to different licensing requirements. Fortunately, there is a push for increased occupational licensing mobility, which includes innovative ideas like interstate compacts and universal licensure.

Interstate compacts are agreements between states that allow licensed professionals to practice in multiple states without having to go through the entire licensing process for each state. Currently, there are several interstate compacts in place, including notable ones like the Nurse Licensure Compact and the Physical Therapy Licensure Compact.

Universal licensing refers to a state honoring an occupational license obtained in another state if an individual meets commonsense standards in the new state for which they are seeking a license.

This is beneficial as it will make it more accessible for individuals to pursue jobs in states outside of their current residence. This could create an influx of workers in states with shortages — such as Utah — and by doing so, greatly reduce labor shortages.

Universal licensing recognition can also benefit consumers by reducing the cost of services. When the government demands a worker’s time and money to enter a profession, the cost of doing business rises. Occupational licenses cost both money and time to obtain. Therefore, with each new license someone must obtain, the cost of doing business grows higher. When states recognize licenses from other states, the cost of doing business decreases, thus decreasing the prices of services.

These policy ideas must be fervently supported as the consequences that arise when licensing mobility is lacking are significant. 

Licensed professionals who are unable to practice in a new state due to licensing requirements may be forced to take jobs outside of their field or go through the lengthy and expensive process of obtaining a new license. This can limit their career growth and economic opportunities, and ultimately harm the economy as a whole.  To contextualize the hurdles of re-licensure, the Institute for Justice has found that “the average license for low- and moderate-income jobs in Utah takes 130 days of education and experience” and carries an average licensing fee of $321.  

Additionally, a lack of mobility can also have serious consequences for consumers. For example, if a patient needs a specific medical procedure that is only available from a licensed professional in another state, they may be forced to either travel long distances or forgo the procedure altogether.

Luckily, Utah is at the forefront of overhauling its occupational licensing process to increase worker mobility. Currently, Utah is a member of multiple interstate compacts, and in 2020 Utah moved to recognize out-of-state workers’ licenses and not require these workers to go through the licensure process again when entering Utah. During the state’s most recent legislative session, Utah also passed legislation making it so foreign or out-of-state workers coming to Utah without a license can receive a license provided their education and experience are sufficiently similar to Utah’s licensing requirements. We encourage the continuation of these policies in order to continually promote worker mobility.