Testimony: Unleashing Maine’s Economy Through Occupational Licensing Reform
Testimony in Support of LD 1586, “An Act to Enable Occupational License Portability and Prohibit Use of Good Character Qualifications in Occupational Licensing” & LD 1628, “An Act to Reform the Occupational Licensing Regime by Including Portability and Removing Good Character Requirements”
Senator Curry, Representative Roberts, and the distinguished members of the Committee on Innovation, Development, Economic Advancement and Business, my name is Nick Murray and I serve as director of policy for Maine Policy Institute. We are a free market think tank, a nonpartisan, non-profit organization that advocates for individual liberty and economic freedom in Maine. Thank you for the opportunity to testify on LD 1586 and LD 1628.
Maine’s occupational licensing regime is unnecessarily stifling to those who move here to practice their preferred profession. Five years ago, Jacob Posik, my colleague at Maine Policy, documented the costs of the many state occupational licensing regimes. These range from fees, to paperwork, educational requirements, to wasted time waiting for the bureaucracy to catch up with one’s application, all to simply begin working in one’s field of expertise.
In a 2015 report, the Department of the Treasury stated: “There is evidence that licensing requirements raise the price of goods and services, restrict employment opportunities, and make it more difficult for workers to take their skills across state lines. Too often, policymakers do not carefully weigh these costs and benefits when making decisions about whether or how to regulate a profession through licensing.” This statement is still true today.
Licensing requirements are not harmful to everyone. Entrenched industries benefit greatly from keeping new practitioners out of the marketplace and suppressing competition. Often, licensing has more to do with imposing costly and time-consuming obstacles that slow down competitors than with ensuring competence or safety on behalf of the public.
Don’t take my word for it. Commissioner Anne Head of the Department of Professional and Financial Regulation testified against a bill last session to establish a new license for general contractors, noting that, “Occupational licensing laws across states create barriers for individuals looking to enter the labor market and they make it harder for workers to relocate across state lines.” This issue is the exact one LD 1586 and LD 1628 aim to solve.
On the topic of ensuring consumer safety, Commissioner Head testified in regards to that same bill, that “If there is an issue of fraud, a licensing board is not going to be able to deal with that kind of issue.” Maintaining strict state licensing standards unnecessarily raises costs for both entrepreneurs and their customers.
LD 1586 and LD 1628 would provide a commensurate license for those who have held an occupational license in good standing in another state for at least a year, a relevant private certification for two years, or demonstrated three years of appropriate work experience in similarly good standing. With this bill, these hard-working Mainers will be able to begin to contribute and earn a living here, doing what they do best to provide value for their neighbors.
It is estimated that today Maine licenses more than 200 individual occupations at a cost of 29,206 jobs and $276 million in annual economic output. Researchers have also concluded that Maine’s licensing programs have resulted in a misallocation of resources of approximately $2.6 billion, or $4,719 per Maine household.
Considering how difficult politicians have made it to retain an income (with the highest tax rate in New England for single-filers earning up to $100,ooo per year) and afford the high cost of living in Maine (15% higher than the national average), this Legislature should do all it can to remove barriers to earning a living.
Please deem LD 1586 or LD 1628 “Ought To Pass” and clear the path for Mainers to work in their preferred profession without unneeded and onerous barriers. Thank you for your time and consideration.