In 1950, fewer than five percent of jobs required a license. Today, that percentage is somewhere between 25 and 30 percent. BRB Publications database of occupational licensing boards lists more than 8,750 individual job titles or businesses that require licensing, registration or certification. Illinois, for example, regulates 98 occupations, including Naprapaths, Pedorthists, Perfusionists, and Pull Tab Operators.
Occupational regulation is largely a state matter. In some cases, states delegate the function to professional organizations such as medical boards or bar associations. This is typically the case with respect to what are called the “learned professions.” In many states, a single occupational board regulates multiple occupations.
There is also a federal component. Depending on the occupation, federal involvement is a matter for independent regulatory agencies such as the Securities and Exchange Commission (which regulates securities brokers and dealers through the Financial Industry Regulatory Authority), Commodity Futures Trading Commission (commodities brokers), and the Federal Trade Commission (e.g., Contact Lens Rule, Funeral Industry Practices Rule, Credit Practices Rule).
Regulation customarily includes licensing, investigations, and discipline. Given this elaborate regulatory scheme, it goes without saying that occupational regulation generates a lot of legal business. The two sides of the legal job opportunity coin are: (1) attorneys who work for the occupational regulatory agencies, and (2) attorneys who represent licensees before these agencies and the courts. A growing number of attorneys specialize in such representation.
The Newly Activist FTC
The impressive growth of this regulatory niche is coming in for more scrutiny now that the Trump administration is in power. While the FTC has examined state occupational regulation periodically in the past and advocated relaxing regulations in order to promote competition, states have largely ignored its recommendations. Now the FTC is at it again, and this time with the backing of people determined to “deconstruct the administrative state.”
Acting FTC Chair Maureen Ohlhausen recently addressed this issue, stating: “I challenge anyone to explain why the state has a legitimate interest in protecting the public from rogue interior designers carpet-bombing living rooms with ugly throw pillows.” The gist of her remarks were that occupational licensing inhibits economic liberty. She announced that the FTC is creating an Economic Liberty Task Force to focus on occupational licensing regulations. The Task Force will seek to “eliminate and narrow overbroad occupational licensing restrictions that are not narrowly tailored to satisfy legitimate health and safety goals.”
An activist FTC can make some serious noise with respect to state occupational regulation. In 2014, the FTC successfully sued the North Carolina State Board of Dental Examiners to restrain them from attempting to keep non-dentists from performing teeth-whitening services (North Carolina State Board of Dental Examiners v. Federal Trade Commission, 574 U.S. ___ (2015). The issue before the Supreme Court was whether a licensing board composed primarily of self-interested persons active in the market it regulates has immunity from antitrust law. The Supreme Court held that antitrust immunity applies only when such a body is actively supervised by the state (the dentists were not).
Look for a more activist FTC with respect to occupational licensing that it believes restrict competition. It is possible that we could see a regulatory rollback which could adversely affect some practitioners.
Nevertheless, occupational regulation is so vast a field that this practice is likely to continue to survive and thrive despite what the FTC might do.