HB 1291 and Occupational Licensing Testimony Presented Before the Missouri House Professional Registration and Licensing Committee
February 8, 2012 by Dave Roland
Chairman Brandom, Vice-Chairman Burlison, and members of the committee, I thank you for the opportunity to offer this testimony. My name is Dave Roland and I am the Director of Litigation and co-founder of the Freedom Center of Missouri, a non-profit, non-partisan law firm dedicated to research, litigation, and education in defense of state and federal constitutional principles. I have spent my entire career focusing on constitutional law while working with groups such as the Freedom Forum’s First Amendment Center, the Becket Fund for Religious Liberty, the Institute for Justice, and, just prior to founding the Freedom Center, with the ShowMe Institute. This testimony is being offered for informational purposes so that legislators may have a better understanding of the constitutional right to earn a living and how that right is frequently violated by occupational licensing laws; it is not intended to either support or oppose the passage of HB 1291. Occupational Licensing In a ritual that has become as predictable as the changing of the seasons, lobbying groups affiliated with particular occupations pop up in each legislative session and plead for the General
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Assembly to impose strict limits on who can lawfully perform their occupation. Importantly, it is almost never ordinary citizens or consumers who are asking for protection from unskilled or untrustworthy workers – it is one set of workers attempting to prevent the number of others against whom they must compete for business. As former Missouri Supreme Court judge Michael Wolff recently pointed out, this kind of activity actually establishes a cartel for the economic benefit of the established professionals.1 While these special interest groups frequently claim that imposing licensing requirements will somehow improve the quality of services available to consumers, studies have repeatedly shown that the real impact of these laws is simply to increase the cost of services and the profits of the protected workers without actually improving the quality of those services.2 Around the year 1950, only about four percent of the American workforce had to get the government’s permission to engage in their occupation. Today, roughly one out of every three Americans is not permitted to earn a living in their occupation unless the government grants them permission to do so. The jobs for which some state and local governments require licensure include florists, street performers, casket salespersons, yoga instructors, tour guides, hair braiders, and interior decorators. For almost all of these licensed occupations, it is actually a criminal offense for two intelligent adults to make an agreement such that a skilled, trusted worker will accept money for doing a job at someone else’s request, unless the worker has first gotten the government’s approval. This is a far cry from the once-cherished notion that the
1
Kansas City Premier Apartments, Inc. v. Missouri Real Estate Commission, 344 S.W.3d 160 (Mo. banc 2011) (Wolff, J., dissenting). 2
In certain circumstances high-income people enjoy an improvement in services provided by licensed professionals, but this is more than offset by the fact that middle-class and low-income consumers can no longer afford access to these services. See Maurizi, Alex R. 1980. “The Impact of Regulation on Quality: the Case of California Contractors.” In Occupational Licensure and Regulation, Simon Rottenberg, ed. Washington, DC: American Enterprise Institute for Public Policy Research, pp. 399-413.
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framers of the Missouri Constitution “sought most sedulously to curb the power of those clothed with authority to legislate in behalf of favored classes, and to leave the people the largest possible control over their own affairs.”3 And, as I will show, it runs flatly contrary to the right to earn a living that is protected under both the U.S. and Missouri Constitutions. The Right To Earn A Living The Fourteenth Amendment and Article I, section 10, of the Missouri Constitution prohibit governments from depriving “any person of life, liberty, or property without due process of law.”4 The U.S. Supreme Court has repeatedly held that the liberty component of the Due Process Clause “denotes not merely freedom from bodily restraint but also the right of the individual to contract [and] to engage in any of the common occupations of life[.]”5 The right to earn a living is, of course, limited by the government’s power to protect citizens’ health and safety, but the fact is that our constitutional system has never given government free rein to impose arbitrary or unreasonable restrictions on a person’s ability to earn a living in a common profession. Where the government attempts to impose restrictions on an occupation, those restrictions must be rationally related to legitimate government interests, and several federal courts have recently struck down state economic regulations because they were not rationally related to legitimate government interests.6 3
State ex rel. Garth v. Switzer, 45 S.W. 245, 251 (Mo. banc 1898).
4
Missouri courts do not differentiate between due process claims brought under the Fourteenth Amendment and those brought under Article I, section 10, of the Missouri Constitution. 5
See, e.g., Bd. of Regents v. Roth, 408 U.S. 564, 572 (1972); Meyer v. Nebraska, 262 U.S. 390, 399-400 (1923); see also Habhab v. Hon, 536 F.3d 963, 968 (8th Cir. 2008) (Fourteenth Amendment protects the liberty to pursue a chosen calling or occupation); Heath v. Motion Picture Mach. Operators Union No. 170, 290 S.W.2d 152, 157 (Mo. 1956) (Fourteenth Amendment protects an individual’s right “to earn a livelihood at any common occupation”). 6
See Merrifield v. Lockyer, 547 F.3d 978 (9th Cir. 2007) (striking down irrational regulation of pest control workers); Craigmiles v. Giles, 312 F.3d 220 (6th Cir. 2002) (striking down irrational requirement that casket sellers must be licensed funeral directors); St. Joseph Abbey v. Castille, 2011 WL 1361425 (E.D. La. Apr. 8, 2011) (striking down irrational requirement that casket-makers must be licensed funeral directors); Cornwell v. Hamilton, 80 F.Supp.2d 1101 (S.D. Cal 1999) (striking down irrational requirement that African-style hairbraiders must be licensed cosmetologists).
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In addition to the U.S. Constitution’s protection of the right to earn a living, Article I, section 2 of the Missouri Constitution also safeguards an individual’s right to “enjoy the gains of their own industry.” This phrase was brought into the Missouri Constitution shortly after the end of the Civil War, and its wording is tied to the broader national debate about the Fourteenth Amendment. One of the primary goals of each of these constitutional provisions was to make sure that all citizens were guaranteed the right to earn an honest living and that the states could not cut that off.7 Senator John Bingham, who introduced the Fourteenth Amendment in Congress, wanted to make clear in the debates over the amendment that the right to enjoy the gains of one’s industry meant the freedom to work in an honest calling and to be secure in the fruits of your toil. That’s the same language that Missouri adopted into its constitution, establishing it as a fundamental, natural right that people should be able to earn by using their skills and their talents, and they shouldn’t have to worry about the government being able to cut them off from their sustenance. Unfortunately, in the past several decades courts have been hesitant to protect citizens’ right to earn a living, and this has emboldened occupation-based interest groups to seek legislation that insulates them from competition by making it illegal to provide services without first jumping through expensive bureaucratic hoops. Over the years, state legislatures have also embraced the idea of controlling who may practice certain occupations, leading the Tenth Circuit Court of Appeals to remark that “while baseball may be the national pastime of the citizenry, dishing out special economic benefits to certain in-state industries remains the favored pastime of state and local governments.”8 But this should not be the case. Legislators should realize that 7
In addition to the general, nationwide concerns about states denying freed slaves the ability to receive wages in return for their labor, the constitutional convention in Missouri was responding to the fact that its wartime and Reconstruction governments had stripped a great many white citizens of their right to work in a range of professions on account of their having expressed sympathy for the Southern cause. 8 Powers v. Harris, 379 F.3d 1208 (10th Cir. 2004).
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licensing laws strip citizens of rights guaranteed by both the state and federal constitutions, and that they should only be used where necessary to protect the public health and safety. Conclusion HB 1291 would establish yet another occupation in which certain established service providers can make it much more difficult for newcomers to compete against them for business. The question the legislature should be asking is whether home inspectors pose such a threat to the health and safety of Missouri citizens that it is necessary to make it a criminal offense for intelligent adults to decide for themselves who they trust to provide home inspection services. I submit that even if the legislature determines that citizens might benefit from knowing which home inspectors have demonstrated certain training or aptitude, it can do so without depriving one set of citizens of their right to earn a living in a common occupation and depriving other citizens of the ability to make their own choices as to who they trust to do this sort of work. Rather than establishing a licensing program of the sort proposed in HB 1291, the legislature could choose to formally certify those home inspectors who have met the standards the legislature deems important while still allowing consumers to choose uncertified workers, if they were comfortable doing so. It is my opinion that a certification program would accomplish any legitimate goals the legislature might have in protecting the public from the dangers of fraud or incompetence, while still preserving the citizens’ rights to earn a living and to hire trusted workers to provide useful services. Thank you very much for your time and consideration.
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