LB 343 – Change credentialing and regulation of cosmetology, nail technology, audiology, massage therapy, and barbers

Good morning, Vice Chairman Erdman and members of the HHS Committee.  My name is Nicole Fox, and I am the Director of Government Relations for the Platte Institute.  Thank you, Senator Riepe, for introducing LB 343.  I am here today to testify in support of this bill. 

In his State of the State address earlier this session, Governor Ricketts urged senators to pass legislation that would grow Nebraska and make the state more economically competitive with neighboring states.  LB 343 does just that – it looks at licensing requirements for 7 personal services professions and 1 healthcare profession in which Nebraska is not competitive, and adjusts those requirements to make us more competitive. 

With the exception of audiology which gets rid of a duplicative license requirement, the main focus of the bill is to lessen the required educational hours needed for licensure.  The proposed new hours are reflective of those used in most states as Nebraska is an outlier.  These changes will lessen the time and costs associated with added educational requirements for licensing in our state and lessen the paperwork required when more than one license is required, especially for those who have been licensed in other states in good standing who are now in Nebraska and wanting to work. 

Much of the opposition to this bill comes from the industries’ educational institutions.  They will tell you that they will need to change their curriculum which is not what this bill does.  They will tell you students of their programs will not be as competent and that sanitation issues may arise – this is not true. 

According to the American Institute for Research’s 2016 Examination of Cosmetology Licensing Issues Data Report, increased curriculum hours did not improve licensing exam performance, employment rates or wages earned.  There was no evidence of a relationship between curriculum hours and the number of safety incidents or complaints.  Anecdotal evidence indicates complaints are often a result of personal disputes between practitioners or competing establishments rather than threats to consumer safety.  Increased curriculum hours DID increase tuition costs and student loan debt.  Unfortunately, entry level jobs in cosmetology may not pay adequately to keep up with loan repayments. 

I ask committee members to answer this question, “Have you ever received a haircut, a massage or any spa or nail service in another state?”  If so, what made you choose the particular establishment?  Was it word of mouth from a friend or family member, business reputation, competitive pricing, hours of operation, convenience to where you live or work?  If you returned for future services, what motivated you to do so?  Was it satisfaction with the quality of services you received, friendliness of the business owner/staff, cleanliness of the establishment, timeliness of your services, or the convenience of the location/parking availability?  Most likely, the state where these services were performed required fewer educational hours for licensing the professional who provided those services, and you were probably unaware.  Free market competition principles drive consumer choices.  Free market competition principles should be motivating potential new workers to come to Nebraska to practice their chosen field of endeavor, but unfortunately, unreasonably high hourly licensing requirements are barriers to entry into Nebraska’s workforce. 

Nearly 200 different occupations in Nebraska require a government license, affecting nearly 1 in 4 workers.  This is negatively impacting small businesses trying to hire employees, potential entrepreneurs wanting to start a business and individuals seeking a means to earn an honest living.  Reform of occupational licensing laws to lessen burdensome regulation is an economic issue that needs to be addressed. 

Occupational licensing laws were initially created as a means of protecting the public from negligent and unqualified practitioners, but more and more, instead of protecting the public from harm, we now understand that occupational licensing is making it difficult for new workers to enter the workforce.  

For some individuals and families, the fees for licensing and the cost of tuition to meet requirements associated with occupational licensing create significant financial barriers.  I’ve included information in the handout comparing the different occupational fields and the licensing requirements for Nebraska compared to others.  In Nebraska, the approximate program cost for cosmetologist and barbers is $20,000; for estheticians is $11,000; for nail technicians is $3,800 and for massage therapists is $8,000-16,000.  Some of these programs have waitlists of 6-12 months, imposing an additional time barrier. 

The cost of licensing is often passed on to consumers by raising the price of goods and services.  A study by the Heritage Foundation showed that occupational licensing reform could save Nebraska households over $900 annually. 

LB 343 will make Nebraska’s job licensing requirements more consistent and competitive with our neighboring states, so that we keep individuals from leaving our state in search of work elsewhere and provide greater reciprocity for workers wanting to move to Nebraska who already hold licenses in good standing in other states. 

The Platte Institute strongly supports occupational licensing reform as a means of lessening burdens to those trying to enter the state’s workforce.  I ask that you advance LB 343 out of committee.  Thank you for the opportunity to testify today.  I am happy to answer any questions the committee may have.