BRAC: State occupational licensing hurts entrepreneurs, small biz owners

    The Baton Rouge Area Chamber this morning released a new public policy commentary that examines occupational licensing, noting practices that may negatively affect the Capital Region economy.

    The commentary analyzes the licensing requirements of a number of occupations and questions the efficacy of state-mandated training and testing for entry into fields that often serve as starting points for the state’s most at-risk populations.

    Jeff Koonce, managing director with Bernhard Capital Partners and chair of BRAC’s Legislative Committee says the hurdles created by these licenses stymie the economy, keep people out of the workforce, limit competition and disproportionately affect residents seeking careers after incarceration or those who wish to be entrepreneurs.

    Specific recommendations from the analysis include narrowly tailoring licensing laws to protect health and safety, eliminating barriers to workforce entry for the rehabilitated, and actively pursuing licensing accessibility for those at risk of recidivism.

    Key takeaways from BRAC’s report are: 

    Over 100 low-income occupations, such as barbers, cosmetologists, and florists, require state licensure to lawfully gain employment in the state.

    Studies have shown that states with heavy licensing requirements experience notably lower levels of entrepreneurship.

    • In 2017, over 80 licensed professionals had their occupational licenses suspended because they were behind on student loan payments. Louisiana is one of only 15 states that can suspend an occupational license for delinquent student loan payments. With more than 40,000 post-secondary students, the Capital Region is especially vulnerable to this punitive policy.

    • Also in 2017, the barber licensing board collected approximately $400,000 in fees for licenses and tests.

    Approximately 3,000 rehabilitated individuals take up private residence in the Capital Region annually. Felony and “good character” provisions in licensure rules may deny these individuals access to employment opportunities. Approximately 20 percent of the state’s African American population could be barred from occupations due to felony bans put in place by licensing boards.

    Read the full report.  

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