Government regulation of most industries is taken for granted. However, there are many fields where the free market could do a better job regulating quality and protecting consumers than the existing government apparatus. Government-imposed occupational licensing is often a burdensome requirement on people looking to get back to work, enter a new career field, or earn a living. In many cases, private certification could do a better job at regulating industries and protecting consumers than government occupational licensing does.
The most popular argument for occupational licensing is that it promotes public health and safety. Without government occupational licensing, the argument goes, there would be little to no consumer protection and no way to regulate the quality of service in an industry that could adversely affect public health and safety. This is a valid concern in some fields such as health care. However, studies have shown that in most cases occupational licensing requirements do NOT improve public health or safety.
Additionally, governments often impose occupational licensing unnecessarily. In many cases, health and safety aren’t at risk. And even when they are, business can be – and often is – already regulated by other government entities like health inspectors. It makes little sense to impose licensing on barbers for giving you a haircut, especially when you consider that chefs and restaurants aren’t licensed to feed the public. Food carries much higher health and safety risks, but we already have good, effective mechanisms in place that protect consumer safety in the restaurant industry – public health inspectors, the power of consumer choice and the free market, etc.
Like the restaurant industry, there are many other industries in the United States that are not currently regulated by state occupational licensing laws and are doing an excellent job of providing quality service to consumers. Instead, they are privately certified through third party organizations that ensure high quality and code of ethics standards for their respective fields. Two examples from my own life are the CAPS (Certified Aging-in-Place Specialist) certification from the National Association of Home Builders and the CAPM (Certified Associate in Project Management) certification from the Project Management Institute.
The National Association of Home Builders offers the CAPS certification to architects, occupational therapists, mobility equipment installers, and anyone interested in crafting homes and environments that allow the elderly or disabled to age in place rather than moving to an assisted living center. To earn the certification, you must pass a course that has been built and tested through years of study and hands on experience by people in the relevant fields. This certification is not required by law, but having it on your resume or business page helps to signal to consumers that you know what you’re doing and have been vetted by a reputable source within your field to provide a very valuable service to the aging. This certification must be renewed yearly to ensure you are keeping up with the current standards of practice in the field.
The Project Management Institute has been collecting industry standards and preferred practices for project managers for decades. Their Project Management Body of Knowledge is the go-to source for quality standards within the project management industry. In order to earn the CAPM certification (which is only an entry-level certification, and one of many the Institute offers) you must complete a minimum of 23 hours of training or verify that you have gained 1500 hours of experience in your current work managing projects for your organization. Then you have to pass a 3-hour, 150-question exam in order to obtain your certification. This certification must be renewed every 5 years. PMI even requires those going through its certification process to sign a professional Code of Ethics for Project Managers.
These two examples, from very different fields of work, show that private certification is a viable tool across numerous industries for ensuring quality service and consumer protection. Unlike government-imposed occupational licensing schemes, these private certifications are optional, which means they are a good means of signaling quality and commitment to industry standards without becoming a burden to people looking to earn a living.
As our latest study, Barriers to Work in the Mountain State, shows, the barriers in West Virginia are high if you want to earn a living in a wide variety of industries. If we hope to build a West Virginia miracle, allowing industries to privately certify their members rather than forcing them to obtain a government-issued occupational license will open up the doors to a better life for many in the Mountain State.
Amanda Kieffer is the Communications Associate for the Cardinal Institute for West Virginia Policy.