As part of our 2013 Policy Priorities , AFP-Indiana is committed to advocating for workplace freedom. Today, AFP-IN State Director Chase Downham testified in favor of Senate Bill 520, which creates a committee to eliminate, reduce, and streamline employee regulations, and study professional licensing in Indiana. The bill passed through committee this morning. Our testimony is posted below.
Mr. Chairman, members of the committee, good morning.
My name is Chase Downham and I am the Indiana State Director of Americans for Prosperity.
Americans for Prosperity-Indiana is a state-based, grassroots organization with nearly 40,000 activists located statewide in all 92 counties dedicated to promoting policies centered around economic freedom.
We support Senate Bill 520 because we believe it will advance workplace freedom.
The issue of occupational licensing is an important one but quite frankly it’s probably one that we may not pay that much attention to all that often. However, like other burdensome regulations and high taxes, occupational licenses can create a barrier to creating jobs and growing small businesses.
According to a study by the Goldwater Institute, just 4.5% of the workforce in the 1950s was regulated under an occupational license. Today, that number is closer to 20% nationwide. In Indiana alone, there are over 80 job categories licensed by the State. While advocates of occupational licenses will cite concerns over safety and quality of services delivered, occupational licenses in many fields are just another means for industries to limit competition and circumvent the decision of consumers in the free market.
I think most individuals here would agree that job creation is a top priority for our state, we believe Senate Bill 520 makes a major advancement in this area.
First, Senate Bill 520 is a jobs bill. For occupations commonly licensed in some states but not others such as librarians, dietitians and respiratory therapists, it has been found that employment growth was 20 percent greater from 1990 to 2000 in those occupations for states that did not regulate versus those that did. By lowering the barrier of entry of those that would enter these occupations, we can create more jobs for those seeking to start a business or simply wishing to get a job without undergoing the State’s burdensome licensing requirements.
Senate Bill 520 is also a consumer advocate bill. We believe this bill could lead to lower prices paid by the public for certain services, allowing Hoosiers to keep more of their hard earned money for other purchases and needs. A study by Dr. Morris Kleiner of the University of Minnesota found that occupational licenses have driven up costs to consumers between 2.0 and 2.4 percent. That figure represents a shift from consumers to licensed professions between $116 and $139 billion. It is simple economics that consumers will pay higher prices when occupational licenses, as a barrier to the job market, limit the supply of those in the licensed occupation.
To summarize, Senate Bill 520 would create a process by which our state can review and begin the important work of streamlining and eliminating those licenses deemed unnecessary. It will also provide a means to reaffirm those licenses which Hoosiers feel are necessary to maintain. Regardless, of Americans for Prosperity’s view on occupational licensing, today we are not debating the merits of certain licenses. Senate Bill 520 simply answers the question of whether or not these reviews should occur and defines the mechanism by which these decisions will be made in the future. A vigorous third party review of occupational licenses as described in Senate Bill 520, with ultimate action required by the Indiana General Assembly in order to maintain those licenses scheduled for sunset, will serve Hoosier taxpayers well and strengthen our economy.
I thank you for your time and again on behalf of Americans for Prosperity encourage you to support Senate Bill 520 and strengthen Hoosiers right to earn a living. Thank you.