The NCSL Blog

By Zach Herman

Even with unemployment at its lowest rate since the 1960s, the boom in jobs and the large pool of workers is not felt equally in every state.

A tourist from New York City visits the Alchemist brewery in Stowe, Vermont. Vermont is trying to tempt tourists into becoming residents, part of an economic development strategy focused on luring new workers, rather than businesses. Wilson Ring/The Associated PressMany states, especially those with higher rural populations, are seeing their workforces shrink. Vermont, for example, saw 16,000 fewer workers in March of 2018 than it did in 2009.

Historically, policymakers sought to address this problem by encouraging businesses to move to their state, with the hope that new businesses would attract new workers. However, many states are shifting the focus toward attracting workers instead of attracting businesses. The common strategy of attracting businesses increasingly doesn’t work for rural states with smaller populations.

The efforts to attract more workers employ a variety of strategies, including grants for remote workers, aid in paying student loans, housing or discounted rent, money to relocate, “stay-to-stay” weekends that are a mix of vacation and seminar for potential new residents, and even giving away free land homestead-style. 

States could be losing many potential new residents because of the difficulty of obtaining a license in the state to work. All these policy ideas are fairly new, but any state considering implementing them should also consider potential reforms to occupational licensing as part of their plan to attract workers.

Occupational licensing is the requirement by the state that a person wishing to perform a certain job meet certain requirements and be licensed by the state to perform the duties of the job. Occupational licensing affects one-third of all jobs in the nation and requirements for a license can vary dramatically between states. For example, new residents who have a license that didn’t require the same number of hours of training or supervised experience, would have to gain significantly more experience to practice in the new state.

The cost and time of obtaining a new license creates barriers to having licensed professionals move to a new state. Wait times for new licenses can mean lost revenue for the state and the worker.

We know this difficulty exists through research done with licensing and employment for veterans and military spouses. The licensed professionals who move, often due to frequent base assignments, frequently have to maintain multiple licenses in multiple states in order to practice their profession.

While addressing occupational licensing as part of a larger plan to attract workers to a state may seem daunting, some simple but effective best practices can help. Interstate compacts centered around specific occupations allows for targeted reform.

These compacts don’t affect scope of practice and can offer a variety of governing, reciprocity, and licensing systems for member states. Compacts can be as simple as a temporary license to target professionals practicing in the state, to multi-state licenses. Every compact is different.

The adoption of specific interstate compacts and other occupational licensing reforms can be an important part of a larger plan to remove barriers to workers moving to your state.

The Council of State Governments (CSG) is partnering with NCSL on a three-year project to examine occupational licensing policies and practices in the states. CSG houses the National Center on Interstate Compacts and provides technical assistance on compacts for states, helping states plan, adopt and implement interstate compacts.

Information about compacts can be found on CSG’s website. Information on NCSL’s occupational licensing project can be found on the NCSL website.

Zach Herman is a research analyst in the Employment, Labor and Retirement Program at NCSL.

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About the NCSL Blog

This blog offers updates on the National Conference of State Legislatures' research and training, the latest on federalism and the state legislative institution, and posts about state legislators and legislative staff. The blog is edited by NCSL staff and written primarily by NCSL's experts on public policy and the state legislative institution.