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Caleb Trotter: Constitution protects us from 'irrational' occupational licensing

Caleb Trotter

SACRAMENTO, Calif.—Setting the record straight on occupational licensing is a worthy goal, but reading Douglas Langer's column in the Herald responding to an earlier piece by Mark Holden, I had to wonder if we read the same article ("Occupational licensing protects the public," Page A4).

The original piece by Holden discusses the dangers of occupational licensing run amok ("To ease poverty, loosen occupational licensing rules," Page A4, Dec. 28). Holden notes that, rather than protecting the public by ensuring practitioners are competent, licenses often serve only to insulate existing industry players from competition by keeping prospective workers out of the field.

Even more troublesome is the disproportionate impact licensing schemes have on people of lesser means and those with criminal records.

One argument that clearly is missing from this discussion is what the U.S. Constitution has to say on the matter. Fortunately, the Constitution protects Americans from irrational licensing schemes while ensuring that courts uphold those laws that actually protect the public—meaning that Langer's concerns about public safety are misplaced.

The U.S. Supreme Court consistently has recognized that the Constitution protects the right to earn a living free of arbitrary government regulation. In fact, one Supreme Court Justice has even referred to this right as "the most precious liberty that man possesses."

But as with all constitutional rights, the right to earn a living is not absolute. Instead, the government may reasonably restrict the right. Of course, there is significant debate over what is "reasonable."

In court, this debate takes the form of the rational basis test. Briefly, that test asks whether the government restriction is rationally related to a legitimate government interest. In practice, this test gives significant deference to the government, and laws are frequently ruled constitutional under the rational basis test.

Yet, recent examples show that the rational basis test is a meaningful limit on government power. Since 2003, three federal courts of appeals have struck down licensing laws that lack a connection to protecting public health and safety and that highlight the frequent irrationality of occupational licensing schemes.

The Fifth and Sixth Circuit courts of appeals each have struck down state laws requiring anyone selling a casket to be licensed as a funeral director, on the reasoning that such a requirement lacks a connection with protecting the public. Because neither state even required a casket for burial, and the training and education requirements scarcely mentioned caskets, the court held that the law served only to protect licensed funeral directors from having to compete with casket sellers, and such economic protectionism cannot justify restricting economic liberty.

In 2008, the Ninth Circuit Court of Appeals struck down a law that required pest removal workers to undergo training in pesticides and obtain a license—even if the workers removed pests without using pesticides.

So, rather than being designed to protect the public, the law existed to protect discrete segments of the pest control industry from competition, the court held.

What is evident from these cases is that those concerned about public safety have nothing to fear from scaling back occupational licenses. Under existing legal precedent, if the government can make a reasonable argument that a license exists to protect the public, and if in practice licensure actually advances that concern, then the license likely will be ruled constitutional.

But where licensing schemes irrationally impede the American dream, they will be—and should be—struck down.

Any worry of impending doom for North Dakotans if licensing requirements are removed is therefore misplaced. More worrisome, as pointed out by Holden, are the costs of perpetuating licensing schemes that protect existing businesses at the expense of the public at large.

In other words, respecting the right to earn a living by limiting occupational licensing is not just good policy; the Constitution requires it.

Trotter is an attorney in the College of Public Interest Law at Pacific Legal Foundation.