By Nicholas W. Rhoad
The regulatory environment in this country continues to creep into more and more corners of our lives. The rule of law has become so massive and cumbersome that younger generations are disenchanted with the idea of starting a business because it seems to be out of their reach.
As the Executive Director of the Indiana Professional Licensing Agency (IPLA), I know our agency is a key step in a professional’s quest to practice a trade or a business owner’s goal to offer a good or service in the marketplace. We are at the epicenter of government regulation as almost a half million Hoosiers have to be licensed and/or permitted by our agency to go to work every day. On top of this staggering number, the IPLA doesn’t even oversee every profession that requires licensing. Including other government agencies that license teachers, lawyers, insurance agents and many more, one in four Hoosiers must be licensed to work in our state.
Other states are much worse. In a national study titled License to Work, the Institute for Justice reviewed the licensing regimes in every state [and] found that about one in three Americans have to be licensed today to have their job. In 1950, this number was one in twenty.
These numbers should be seen with great concern by the public as they are the ones who are impacted by the negative economic principles in action. The schooling and fees required for individuals to be licensed increase the costs of the service for consumers by an estimated 15 percent. This is especially detrimental to people who live in less populated areas and/or are poor. Additionally, the supply of incoming practitioners is being restricted and reduced because of the barriers to entry, namely the costs of education and continuing education, which can be in the tens of thousands of dollars to complete.
Successful businesses mean more jobs; more jobs mean more workers; and more workers mean more paychecks. This is how families and communities can thrive, and our work at the IPLA is centered on making sure Hoosiers are equipped for the workforce with the license they need to practice. But regulations, while sometimes protecting the public good, can also increase costs and stifle business growth. For this reason, Governor Mike Pence instituted an agency-wide regulatory moratorium on his first day in office, which resulted in 55 percent fewer new rules in 2013 as compared to 2012 and 36 percent fewer in 2014 than in 2013.
We have cut red tape and reduced barriers for licensees over the past few years, but we can do more and are determined to make real progress in this regard. We are working to make sure there is a proper balance between public safety and a free market. Cutting red tape, allowing for free market competition, and looking at ways to deregulate the myriad of professions currently requiring licensure would better serve consumers, practitioners, and employers.
The views expressed in this column are those of the author and not necessarily those of the Public Interest Institute. They are brought to you in the interest of a better informed citizenry.
Nicholas W. Rhoad is Executive Director of the Indiana Professional Licensing Agency. Public Interest Institute published the report, “Establishing A Process For Self-Certification Registration” on IPLA’s proposed self-certification registration process in Indiana to serve as a model for the Iowa General Assembly to follow to lessen the regulatory burden of Iowa’s licensing procedures. Contact him at Public.Interest.Institute@LimitedGovernment.org.