Occupational license reform will help the trades in Idaho

The trades, electrical, plumbing, and HVAC (Heating, Ventilation, and Air Conditioning), face a growing concern surrounding what could most accurately be labeled a retirement crisis. Some estimates say that for every five journeyman who retire from the trades, only two apprentices from a younger generation will replace them. 

Licensure raises the price of entry into the trades’ labor market, artificially limiting the number of people who can enter it. Given the ever-important need for skilled laborers in the trades, this is a big concern. The research shows that Idaho has the ability to lower its licensure requirements without significant harm, and therefore should do so.

Idaho’s licensure requirements are essentially the same across electrician, plumber, and HVAC. To gain a journeyman license, which allows someone to work alone at the commercial level, one must work as an apprentice for 8,000 hours under the supervision of a journeyman, and complete four years of course instruction.

Alternatively, one could also work as an apprentice for 16,000 hours under the supervision of a journeyman. For electrical licensure in particular, a journeyman electrician is allowed to supervise up to six apprentices at a time in residential settings, and two apprentices at a time in non-residential settings (commercial or industrial). No such stated ratios exist in Idaho law for plumbing or HVAC.

Idaho also has a universal licensure law, which allows it to streamline the process of getting a license for those who have already been licensed in another state. For electricians, there is reciprocity with Colorado, Maine, Montana, Nebraska, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Texas, and Wyoming. For plumbing, Idaho only has reciprocity with Montana, Oregon, and Washington.

For HVAC, Idaho does not have reciprocity with any state, but does allow applicants to submit documentation of 8,000 hours of work and four years (576 hours) of schooling, even if it was completed in another state, to then qualify for the entrance exam.

Finally, focusing on the journeyman license for electricity, Montana, New Mexico, North Dakota, South Dakota, and Texas all have lighter licensing requirements, only requiring 8,000 hours of work experience and a successful examination. This begs the question of why Idaho has decided that 8,000 hours of work experience is sufficient if you are in Texas but not if you are in Idaho. Surely, electrical work is not so different as to make 8,000 hours in Texas equal to 8,000 hours and 576 hours of schooling in Idaho.

So what should Idaho do? Should Idaho drop its licensure requirements to match the states it already reciprocates? Should it increase its requirements? Should it do nothing at all? There needs to be a more principled account of the usefulness of licensure. How does licensure actually affect the quality of the trades?

The main argument for licensure is that it protects consumers from poor-quality workers. It is argued that there is a large risk factor if a low-quality electrician enters the field. But does licensure actually ensure that there will be higher-quality electricians, or does it just artificially restrict the number of people in the trades? Are there other associated benefits that may outweigh the costs?

Often, the main benefit cited in favor of occupational licensing is that licensing increases quality. This argument says that in high-risk occupations, such as medicine, where consumers lack the appropriate knowledge to compare between different doctors, or where there is low market competition that lowers the incentive for raising quality between competing firms, the government can protect consumers by instituting licensing that ensures only high-quality workers enter the respective field.

Of the twelve studies reviewed by a 2015 White House study, however, only two of them found positive increases in quality. The document says outright that “[m]ost empirical evidence does not find that stricter licensing requirements improve quality, public safety or health.”

In spite of evidence that there is growing market demand for the trades, and in spite of evidence that those same trades are suffering from shortages, Idaho continues to impose heavy licensure requirements on electricians, plumbers, and HVAC workers.

Idaho’s own regulations are even more stringent than the requirements for states whose licenses they recognize. This imposes significant costs on consumers and does not seem to have a positive effect on worker quality based on the available evidence. It would be best practice for Idaho to seek to lower barriers to entry into the trades to meet the needs of the present.