By John Hood as appearing in the Richmond Observer

Our state continues to outpace our peers in economic growth. Over the past five years, North Carolina’s gross domestic product expanded by an inflation-adjusted annual average of 3.1%, vs. 2.3% for the nation as a whole. Our total employment rose 9.2% over the same period, again beating the national average of 4.7%.

But now is no time to rest on our laurels. Other states are redoubling their recruitment efforts, retooling their education and transportation systems, and reforming their tax and regulatory codes. Moreover, our economy faces new headwinds. Domestic and international reaction to the Trump administration’s new trade war will temper expectations and raise costs for both households and businesses.

During its 2025 session, the General Assembly should continue to make North Carolina a better place to live, work, invest, and create new businesses. Given tight budgets and modest revenue projections, lawmakers will have more room to maneuver on regulatory reform than on tax reform.

To be more specific, we should further deregulate labor markets in North Carolina. Our state already forbids compulsory unionization and wisely abstains from fiddling with market prices for labor. But policymakers ought to make it even easier to create new jobs, enter new occupations, and deliver goods and services more efficiently.

Here are three good ways to open up our labor markets:

First, the General Assembly should enact House Bill 763, the “Neighbor State License Recognition Act.” Sponsored by Reps. Jeff Zenger (R-Forsyth), Steve Tyson (R-Craven), Ben Moss (R-Richmond), and Mark Pless (R-Haywood), this legislation would establish occupational-license reciprocity with our nearby states of Georgia, South Carolina, Tennessee, Virginia, and West Virginia.

The bill would allow North Carolina residents previously licensed in one of those other states to obtain a professional license in North Carolina without undergoing another round of costly training and testing requirements. Only medical professions such as physicians and veterinarians would be exempt.

In a just-released paper for the John Locke Foundation, economists Edward Timmons and Conor Norris observed that North Carolina currently licenses more occupations than do all but 10 other states in the country. While such regulations are often sold as consumer protection, the preponderance of research shows they confer few safety benefits or quality improvements. Their primary effect (and true purpose) is to make labor markets less competitive, raising consumer prices by up to 16% and reducing employment in North Carolina by a net of about 42,500 jobs.

When states recognize licenses issued by other states, wrote Timmons and Norris, the resulting elimination of “redundant training, testing, or education requirements” tends to boost in-migration by highly productive professionals — helping not only those newcomers but also businesses seeking employees and consumers seeking services.

Second, the General Assembly should reexamine North Carolina’s current array of certification rules and licensing boards. Senate Bill 451, for example, would reduce the minimum requirements for continuing education and professional development for contractors, inspectors, auctioneers, real estate brokers, electrologists, cosmetologists, foresters, and other licensed professionals. Its sponsors include Sens. Tim Moffitt (R-Henderson), Steve Jarvis (R-Davidson), and Tom McInnis (R-Moore).

Finally, lawmakers should follow up these initial steps by adopting a more-sweeping measure known as the “Right to Earn a Living Act.” This would change the regulatory paradigm altogether, requiring licensing boards to prove that any rules they apply are “narrowly tailored to accomplish a compelling government interest.”

Arizona, Tennessee, and Louisiana have already adopted this legislation in some form. It “places the burden on the state to demonstrate the necessity of licensing,” Timmons and Norris wrote, “and it assumes that individuals have a right to work without the impediment of regulation. Under the Right to Earn a Living Act, occupational licensing is the regulation of last resort.”

I think state lawmakers should pursue a broad range of deregulatory initiatives this session, from certificate-of-need and scope-of-practice reforms to the NC REINS Act, which would require legislative authorization for a regulation exceeding $1 million in economic impact.

Still, licensing reform would be a good place to start.

The preceding article originally appeared on April 7, 2025 at The Richmond Observer’s website and is made available here for educational purposes only. This constitutes a ‘fair use’ of any such copyrighted material as provided for in Title 17 U.S.C. section 106A-117 of the U.S. Copyright Law. Any views or opinions expressed here are those of the authors and do not necessarily reflect the official policy or position of the Carolina Leadership Coalition. Video above courtesy of Americans for Prosperity.