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STELLE: PA Regs Shut Doors to Economic Opportunity

Gov. Josh Shapiro recognizes how government regulations come between Pennsylvanians and job opportunities.

In his first week, Shapiro acted on his campaign promise to “open the doors to economic opportunity.” His first executive order instructed state agencies to remove degree requirements for state jobs. While the practical impact was limited (technically, only 34 of the 2,600 job titles in the executive branch required a degree), the spirit was welcome.

In August, the governor acted again to expand opportunity by waiving college credit requirements for state troopers.

Now it’s time for the governor to help workers in the private sector. In the same way he removed meaningless credentials for state workers, Shapiro can expand job opportunities across Pennsylvania by removing excessive licensing regulations. Current rules ignore work experience and prioritize hoop-jumping over competence.

Such reforms would benefit Pennsylvania workers like Maimouna Thiam.

Thiam fought in court for years for her right to braid hair without a license. She learned her skills growing up in Senegal, and her Philadelphia salon was thriving.

Thiam had a hair-braiding license from another state, but Pennsylvania regulators didn’t care. To become licensed in Pennsylvania, Thiam needed 300 hours of training, which is difficult to accomplish when working full-time. She also needed to pass an English exam—an unnecessarily high bar for the French-speaking immigrant.

Thiam isn’t alone in dealing with excessive Pennsylvania licensing requirements.

Sally Ladd helped property owners in the Poconos market their short-term rental homes online.

The Pennsylvania Department of State investigated Ladd, claiming she operated an unlicensed real estate business. The agency relied on an outdated regulation and conflated Ladd’s job with that of a traditional real estate broker. To obtain a legal license, Ladd would need to spend three years working for an existing broker, pass two exams, and operate in a brick-and-mortar office space in Pennsylvania—all time-consuming and economically unviable requirements. Moreover, Ladd lives in New Jersey and doesn’t intend to move to Pennsylvania.

Thankfully, Thiam and Ladd won their cases. The Pennsylvania Supreme Court granted Thiam and Ladd the freedom to practice their talents without a license.

But everyday citizens shouldn’t have to go to court for the freedom to work. Thiam’s and Ladd’s stories are just two examples of how Pennsylvania’s regulatory restrictions slam the door on opportunities to “earn an honest living.”

A recent Commonwealth Foundation report identified more than 166,000 regulatory restrictions in Pennsylvania—20 percent higher than the national average. This long list of restrictions includes regulations governing 29 state licensing boards, which regulate more than 1 in 5 Pennsylvania workers. In fact, Shapiro issued an executive order requiring the administration catalog every permit, license, and certification. They found Pennsylvanians are subject to 2,400 different permits, licenses, and certifications.

Shapiro’s predecessor recognized the job-killing effects of overregulation, too. In 2018, former Gov. Tom Wolf called for eliminating 13 occupational licenses, including those that restrict barbers, cemetery brokers, auctioneers, and hair braiders.

“Unnecessary and burdensome licensing requirements create barriers to employment,” said Wolf.

It’s time to cut the red tape. The cost of the status quo is simply too high.

How high? The Commonwealth Foundation report estimates reducing 36 percent of regulatory requirements could add $9.2 billion to Pennsylvania’s gross domestic product. This increase equals about $1,760 per household and 183,497 new jobs in Pennsylvania.

Pennsylvania lawmakers are also taking licensing reform seriously. For example, House Bill 591, sponsored by Rep. Dawn Keefer, would free niche beauty providers, like hair braiders and make-up artists, from cosmetology school requirements. Senate Bill 25, sponsored by Sen. Camera Bartolotta, would free nurse practitioners to serve patients without costly state-mandated physician contracts.

Shapiro should immediately work with the legislature to eliminate harmful licensing regulations that kill jobs.

When announcing his first executive order, Shapiro said, “We’re sending a clear message to our workers, whether you went to college or gained experience through work, on-the-job training or an apprenticeship, we value what you bring to the table, and we want you here.”

Freeing Pennsylvanians from nonsensical licensing regulations sends a powerful message that our commonwealth values all workers.

Elizabeth Stelle is Director of Policy Analysis of the Commonwealth Foundation, Pennsylvania’s free-market think tank. Twitter: @ElizabethBryan