SENATE
BILL WOULD REQUIRE REGULATORS TO JUMP MORE HURDLES BEFORE IMPOSING NEW
LICENSING RESTRICTIONS
Illinois Policy Institute/
Vincent Caruso
Regulatory regimes in Illinois often
discourage workforce participation without enhancing public welfare. One
Senate bill, however, would require regulators to demonstrate the
necessity of new rules before imposing them on workers.
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One bill floating through the General Assembly would subject
regulators themselves to inspection.
Senate Bill 2776, filed Feb. 2 by state Sen. Pam Althoff, R-McHenry, establishes
a system through which new professional regulations and licensing requirements
must withstand independent scrutiny before becoming law.
The Regulatory Sunrise Review Act would require that an independent report weigh
the necessity of pending regulation. The report would explicitly identify
whether the absence of regulation over a given profession poses any “potential
harm or threat to the public” and further provide “specific examples of the harm
or threat identified.”
Critically, the report would offer lawmakers a perspective on the potential
economic trade-offs caused by new regulation under review. SB 2776 would require
these reports “address the social and economic costs and benefits of licensure,”
and provide insight into proposed regulations’ potential impact on consumer
prices and the labor market.
The right to earn a living isn’t always a given.
For many professionals seeking – or simply continuing – employment, one can
expect to navigate a complex landscape of regulatory hurdles. Regulations
involving occupational licensure, educational requirements and entrance fees
impede economic activity while often delivering no measurable improvements to
public health and safety.
This problem is exemplified by the story of Lisa Creason. Creason is a Decatur
mom who suffered the consequences of a 2011 law that barred ex-offenders like
her from acquiring a license to work as a registered nurse. Even though Creason
had worked as a nursing assistant for more than a decade and passed all of her
nursing tests, the law prevented her from acquiring the license needed to pursue
her dream and move her family into a safer neighborhood. After years of fighting
for reform, changes to the law allowing Creason and others like her to seek
health care licensure took effect in 2017.
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The city of Chicago’s
thinning food truck population also offers an instructive example of
the degree to which aggressive regulatory regimes can suppress
workforce participation and discourage entrepreneurial drive.
While some policymakers
are inclined to defend the often costly and complex nature of
various occupational regulations as necessary to uphold consumer
quality, the opposite is often true. Enforcing onerous barriers to
entry against industry newcomers means market competition is
limited, and thus quality can be compromised.
Worse, these barriers overwhelmingly limit low-income individuals
aspiring to climb up the economic ladder. But this isn’t an
unfortunate byproduct of protecting public welfare as much as it is
a function of the system working as intended. Licensing boards are
often composed of industry incumbents, who have an incentive to use
licensure as a buffer against competition.
Moreover, a host of mechanisms through which firms and individuals
can demonstrate quality assurance exist in the private sector.
Fortunately, SB 2776 takes these into account, requiring reports on
proposed regulations consider whether “market competition and
third-party or consumer-created ratings and reviews” should suffice
to remedy a supposed public disservice.
During a period in which the Land of Lincoln is experiencing labor
force drawbacks, it’s encouraging that some lawmakers in Springfield
have sought to explore ways to ease more Illinoisans’ efforts in
achieving the security of employment.
Measures similar to Althoff’s include a trio of licensing reform
proposals – House Bills 5208, 5210 and 5211 – introduced into the
House by state Rep. Tom Demmer, R-Dixon, and Senate Bill 2439, filed
by state Sen. Scott M. Bennett, D-Champaign, which would prevent the
state from revoking one’s occupational license for defaulting on
student loan debt.
By advancing the Regulatory Sunrise Review Act, lawmakers would
likewise advance the occupational prospects of Illinoisans.
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