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Publication Date

Spring 8-1-2023

Abstract

While there can certainly be benefits to licensing requirements in helping to ensure high-quality services and safeguards against serious harms, there can also be drawbacks to such requirements. The negative impacts of licensing requirements include reducing employment opportunities, lowering wages for excluded workers and increasing costs for consumers. Furthermore, it has been shown that the cost of licensing falls disproportionately on certain populations including military spouses, immigrants and those with criminal convictions.

Clearly, occupational licensing can be a legitimate constitutional exercise of the government’s power to regulate. For example, licensing of doctors or plumbers is justified as protecting public health and safety. Such licensing laws protect the general public from unqualified practitioners. But what about an occupational licensing law whose sole purpose is not to protect the general public but to protect the current practitioners of a trade from competition by newcomers? Is that type of occupational licensing law a legitimate exercise of the government’s power to regulate? This anti-competitive approach is referred to as ‘economic protectionism’ and when it is the only purpose of legislation, it is referred to as “naked economic protectionism.” Naked economic protectionism is the consequence of “laws and regulations whose sole purpose is to shield a particular group from intrastate economic competition.”

This article addresses the constitutionality of occupational licensing laws that are justified solely by naked economic protectionism. The fundamental issue is whether such a licensing law is a valid exercise of government power or a violation of constitutionally protected principles of economic liberty.

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