Last year, the 103rd Illinois General Assembly enacted bills to make it easier for military families and aspiring nurses, dentists, pharmacy clerks and counselors to work in professions requiring an occupational license. The modest reforms were designed to bring more fairness to Illinois’ bureaucratic licensing requirements, for example by allowing military spouses to expedite licensure in Illinois.
Yet, the impact of licensing on Illinoisans remains massive, and it helps perpetuate Illinois as last among all 50 states in racial equality as measured by employment and wealth, according to a WalletHub analysis. Blacks are 5.3 percentage points less likely to be licensed than white workers, Latinos 11.4 points less likely and Asians 6.3 points less likely, research from the Federal Reserve Bank of Minneapolis shows. Licenses can cost tens of thousands of dollars to obtain.
As lawmakers return to Springfield for a new legislative session, they must enact more sweeping reforms that cut down on licensing requirements and open up ways to earn a license, empowering those most in need of opportunity.
Here are reforms the 104th Illinois General Assembly should put on the agenda, to ultimately reduce inequality and bring more opportunity to our neighbors.
Pare down licensing restrictions
Our analysis of licensing laws shows obtaining a cosmetology license in Illinois costs someone an average of $38,658, while the median earnings for a cosmetologist was $27,040 in 2019. That’s just one of 41 low-income professions Illinois licenses.
The state could identify these inequities to ensure regulation is about public risk rather than controlling professional competition. It could do so through a robust process called “sunset reviews” that regularly examine occupational licensing restrictions to ensure they are not more burdensome than necessary to protect the public.
While Illinois has had a review process on the books since 1979, it exists in name only. For 40 years, no reviews were performed. Since attempting to revitalize it in 2019, the reviews published were substantially incomplete because they did not consider important criteria. The state needs a more robust process that includes a cost-benefit analysis of expected wages.
The review committee should begin eliminating restrictions that research has found disproportionately hurt minorities, such as excessive education and experience requirements that make the license process daunting. Eliminating unnecessary occupational licensing could reduce the income gap between the richest and poorest by up to 4%, and overall income inequality by up to 7%.
Look to other states, expand apprenticeships
If a profession is practiced safely without a license in at least 10 other states, Illinois should remove the license requirement. This would allow many more people to participate in 20 professions, such as hair braider, which is unlicensed in 33 states; and roofer, unlicensed in 28 states.
Similarly, if a profession is practiced safely in another state with fewer licensing requirements, Illinois should adopt those less-burdensome requirements. For example, Illinois could reduce its 1,500 hours of formal barber training to match New York’s requirement of only 360. While low-income people can’t afford a year of training without pay, three months is much more manageable. This change can occur by amending current law or by working with the Illinois Department of Financial and Professional Regulation to reduce burdens.
Last, Illinois needs to expand apprenticeship-to-licensure opportunities. Currently, to earn a license in many professions, including cosmetology and other aesthetic fields, individuals can only earn approved credentials through for-profit trade schools that often have shaky reputations. With an average tuition of over $17,000, this creates an unaffordable barrier for low-income people.
There’s a better way: Illinoisans should be able to earn a license by training directly with someone in that trade. Apprenticing as a barber on Saturdays would allow someone to keep a full-time job as well as complete the required training in about three years.
The General Assembly can address this in some fields by reintroducing and passing House Bill 4617 from last year, which amends the Barber, Cosmetology, Esthetics, Hair Braiding, and Nail Technology Act of 1985.
Fixing this is good for improving income and racial outcomes and social mobility, on which Illinois ranks worst among all Midwestern states and 40th nationally, according to research from the Archbridge Institute. It’s also important to getting people back to work and decreasing the state’s 5% unemployment rate and about 8% Black unemployment rate.
Lawmakers can rally behind these ideas this year to reduce inequality and expand opportunity to those who need it most.
Josh Bandoch, Ph.D., is head of policy at the Illinois Policy Institute.
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