FTC Takes on Economic Liberty with Introduction of New Task Force
On March 16, 2017, the Federal Trade Commission (FTC) concurrently rolled out a task force and accompanying resource webpage focusing on economic liberty, with a concentration on occupational licensing reform to advocate for public education and change on this contentious topic.
Occupational licensing reform is the process of lowering or eliminating arbitrary or unfair barriers to entry to certain markets via the requirement of some sort of license to practice. In some cases such as with doctors or lawyers, licensing makes sense from a consumer protection standpoint. However, the true need for reform can be seen in smaller, more niche markets, such as florists and interior designers. In the case of many of the state licensing boards for these industries, the board members have also been primary stakeholders in the industry, and therefore have been able to dictate the terms for market entry to their industries in a way that restricts incoming competition. According to the FTC webpage, in recent decades the number of such regulated industries has increased drastically from less than five percent in the 1950’s to nearly 30 percent today. In addition, the increased barriers to market access in entry and mid-level jobs more severely affect individuals and families on the lower end of the socioeconomic scale, as well as military families. These licensing requirements stifle attempts at economic empowerment and upward mobility in these demographics through unfair business practices.
Encouragingly, challenges to this system have been made easier following the 2015 Supreme Court decision in North Carolina Board of Dental Examiners v. Federal Trade Commission, which held that in order for a licensing board with practicing members to invoke state immunity, it must have direct supervision from the state. This has led to a strong push in state legislatures for bills reforming their licensing boards; there are active bills in Connecticut (SB191), Mississippi (HB1425), West Virginia (HB2984), Nebraska (LB299) and Indiana (HB1221, HB1243 and HB1394). With these bills in the states and the issue freshly relevant, it is an optimal time for the FTC to launch this initiative.
ALEC is a strong proponent of free market principles and opposes unfair barriers to business. The ALEC website has numerous articles and model policy regarding occupational licensing reform that can be found here, and represents a comprehensive look at regulatory reform topics. In addition, the “Occupational Board Reform Act” model policy is both in line with the new FTC task force’s goals and also forms the basis for reform bills in many of the state legislatures. Therefore, ALEC applauds the creation of this new task force and resource site, and looks forward to supporting their advocacy work in this field.