A promising bill is working its way through the Nebraska Legislature that could soon make it much easier for Nebraskans to earn an honest living. Introduced by Sen. Laura Ebke, LB 299 would require the government to ask: "Is there any good reason Nebraskans should have to get the government's permission to do this job?
Legislators will be tasked with repealing or modifying licenses that primarily serve to squeeze out competition and allow existing businesses to jack up prices on consumers. But where there is demonstrable, widespread evidence of public harm without regulation, LB 299 would require policymakers to use the least restrictive means to protect health and safety.
This shift would eliminate regulatory burdens that function more as government favors to “bottleneckers”-- the special interests that use government power to reap monopoly profits and other benefits by limiting healthy economic competition. Instead of picking winners and losers, policymakers would have access to the full hierarchy of regulatory options --which range from market competition and consumer-created ratings and reviews (like Yelp) to occupational licensing (the most onerous option) -- to protect job growth and the public.
If implemented, the reforms could ultimately roll back much of the burdensome and unnecessary red tape that the government imposes on nearly 100 occupations -- and the entrepreneurs who work in them -- all without cutting back on effective, evidence-based consumer protection.
Occupational licensing is one of the biggest economic issues facing the modern job market. According to the Brookings Institution, nearly one in every three Nebraska workers today needs some form of special permission from the government, in the form of a license or certification, to legally do their jobs. By comparison, only five percent of workers nationally were licensed in the 1950s -- a massive increase that imposes high costs especially on small businesses and lower-income entrepreneurs. The Heritage Foundation estimates these licensing costs amount to nearly $1,000 per year for the average Nebraska household.
According to Institute for Justices’s recently released report, “License to Work,” Nebraska licenses more lower-income occupations than the national average -- 63 of the 102 occupations studied. When it comes to broad and onerous licensing laws, the Cornhusker State ranks behind Colorado, Kansas and Missouri, and all of its neighbors except Iowa, and many of Nebraska’s licensing requirements are bizarrely excessive.
For one particularly jarring example, barbers and cosmetologists need 2,100 hours of education to legally cut hair, which is more than 15 times the required hours needed for an emergency medical technician to get a license to do things such as stabilizing a dying person and transporting them to a hospital.
Last year, lawmakers introduced a bill to, among other things, pare back Nebraska’s licensing requirements for barbers, cosmetologists and other occupations. It failed but is up for reconsideration this year.
Support for genuine licensing reform like LB 299 is broad, substantive, and growing, from the Platte Institute to the state chapter of the ACLU, which backs LB 299 in part for its potential to put rehabilitated Nebraskans with criminal convictions back to work instead of back in prison.
Bipartisan proponents include President Trump’s Labor Secretary Alex Acosta, former officials from the Obama administration, the 2016 national Republican Party platform and the acting chair of the Federal Trade Commission, who has served under the last two presidential administrations. The FTC made an official comment on Jan. 17, supporting the goals of LB 299.
With LB 299, the Nebraska Legislature has a critical opportunity to make Nebraska a national leader in job creation and economic growth. Enacting these reforms would help protect the right of hardworking Nebraskans to earn a living and help lower the costs of products and services, while still giving the government the tools it needs to protect consumer health and safety.