Markets Wired

In testimony presented to a U.S. House Judiciary Subcommittee, Acting Federal Trade Commission Chairman Maureen K. Ohlhausen described the FTC’s extensive work on the potential competitive effects of excessive occupational licensing through research, education, advocacy, and enforcement.

Testifying on behalf of the Commission before the Subcommittee on Regulatory Reform, Commercial and Antitrust Law, Acting Chairman Ohlhausen noted that licensing has become an increasingly dominant form of occupational regulation, with studies suggesting that 25 to 30 percent of the U.S. workforce is employed in occupations that require a license.

The testimony recognized that occupational licensing can offer important benefits, including protecting consumers from actual health and safety risks. It cautioned, however, that that does not mean that all licensing is warranted. “Licensing restrictions may impede competition and hamper entry into professional and services markets, yet offer few, if any significant consumer benefits,” the testimony stated. “Such regulations may lead to higher prices, lower quality, and reduced consumer access to services and goods.  . .  In the end, excessive occupational licensing means consumers lose the benefits of competition, workers are denied full economic opportunity, and our whole economy suffers.”

The Commission vote approving the testimony and its inclusion in the formal record was 2-0.

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