Despite all of the good news about West Virginia’s economy over the past few years, we still have one of the lowest labor force participation rates in the country. If we want the state’s economy to continue to grow, we need to focus on increasing our labor force participation. One of the ways we can do this is by reducing both the licensing requirements and fees for some common but important professions.
In the 1950s only about 70 occupations in the country had licensing requirements. By 2008, that number had ballooned to well over 800. Here in West Virginia, nearly 50 percent of professions that are classified as “low-wage” are subject to licensing and our fees are some of the highest in the country. On average, West Virginia is 8% higher than our neighboring states, all of which have a much higher labor force participation rate.
The Knee Center for the Study of Occupational Regulation in conjunction with the Cardinal Institute for West Virginia Policy recently looked at 64 commonly licensed occupations. Almost half of the occupations examined had a significantly higher barrier to entry in West Virginia than in neighboring states. To put this in perspective, the average cost of an initial licensing fee in Pennsylvania is $68, compared to almost $175 in West Virginia. Renewal licensing fees are similar, with Pennsylvania charging an average of $125 per year compared to West Virginia’s average of $197.
Unfortunately, high licensing requirements and fees unfairly impact small businesses and sole proprietors, who form the backbone of West Virginia’s economy. In order to foster new small business growth, we need to reduce barriers to entry for small business owners. One way to do so is to shift away from state-regulated licensing and encourage voluntary certification and continuing education via existing nationwide occupation-specific trade associations. Many of these organizations offer certification programs that are much more strict than existing state licensure, which often only serves as a receipt for payment of licensing fees.
Ultimately, as part of comprehensive licensing reform, we need to look at both licensing requirements and the fee structure for all professional licenses required in West Virginia.
In some cases, licensing requirements need to be removed altogether and in almost all cases we need to reduce existing licensing fees. We also need to investigate entering into reciprocity agreements with neighboring states, to allow a professional licensed in West Virginia to operate outside of the state without additional cost. This would be of particular benefit here in the Eastern Panhandle where much of our workforce often works in Maryland and Virginia as well as in West Virginia.
If West Virginia is to succeed, our small businesses need to succeed. Removing unnecessary financial impediments such as high licensing fees and requirements is an important part of ensuring that success.
I am a strong supporter of licensing reform and will continue to advocate for West Virginia’s small businesses as a candidate and hopefully as a member of the House of Delegates starting in the 2021 legislative session.
Everhart is a resident of Shepherdstown and a Republican candidate for West Virginia House of Delegates in the 67th district