Universal Recognition and Labor Competition

I noted last week that recent research by the Goldwater Institute suggests that universal recognition enacted in Arizona was showing significant benefits for both the state's labor market and for workers seeking to continue to practice their occupation in a new location.

A new policy report from Arizona State's Center for the Study of Economic Liberty further makes the case that maximum portability of occupational licensing via a universal recognition bill (such as LB1187 introduced by Senator Andrew La Grone in Nebraska this year) is a great way to improve the labor market inside of a state. 

According to the study:

This lack of license portability has real-world impacts. It keeps workers from moving to a state when they might otherwise. Lack of portability is also especially onerous for “trailing spouses” of military members who are often kept out of the workforce when their family is transferred to a new state.

The lack of portability for "trailing spouses" should be of special concern for us here in Nebraska, for a couple of reasons. First, we have a major military base in Sarpy County and spouses find themselves "trailing" their servicemember–sometimes for relatively short assignments of 1-3 years. Universal licensing which would recognize licensure in another state and experience–could provide a new pool of labor in the Omaha area in many occupational areas. 

Second, even apart from the military, Nebraska needs workers of all types. In an era when many (if not most) families see both members of a couple working outside of the home, a decision whether or not to come to Nebraska for one person may be dependent on the ease with which a spouse could find a job. 

Some in currently licensed occupations in our state (and others) will argue that we shouldn't grant automatic licensure–that it's not "fair" to those who have earned their license in Nebraska to be able to come here with a license from another state and be granted permission to work under a different set of rules. That's an interesting idea, but I think it points out just how random licensing frameworks are. If two people are doing the same work in two different states, is one automatically better because they've had to spend twice as much time in school? Is a haircut in Nebraska inherently better because our licensing requires one to pay for more hours of school? 

As believers in the free market, Nebraskans should move to universal licensing in any area of the labor market that we can. It will bring us some new workers (as the Goldwater Institute study suggested has happened in Arizona); it will facilitate some ease of hardship for some military families, and; it will put us in a better position to compete with other states for workers who could make Nebraska their home and contribute to the growth of our state economically.

The good news? LB1187, which will probably not move during this legislature–but which we'll work to have re-introduced next year–already has elements of all of the "best practices" that the Arizona State study suggests should be in a recognition bill.