Near the Nebraska-Iowa state line, it’s not uncommon to see advertising wooing car buyers across the river to dealerships in Iowa. If you live in downtown Omaha, it might even be a shorter trip than another dealership outside the city.
Dealerships always try to compete on price, of course, but one other surprising difference between these interstate rivals is occupational licensing. In Nebraska, the salesperson helping you pick out your ride has to apply for an annual license in order to be employed, while Iowa and most other neighboring states require no license at all.
The requirement applies to motor vehicle salespeople, including those selling trailers and motorcycles.
But with the Nebraska Legislature’s recent unanimous approval of Legislative Bill 346 by a 47-0 vote, Nebraska will join Iowa and the majority of other states that do not impose this red tape requirement.
Mickey Anderson is president of Baxter Auto Group, which operates 16 car dealerships in Nebraska. The company employs hundreds of salespeople. Each year, his salespeople have to apply for a state license, which costs $20 to obtain.
“The fee for licensing a salesperson, at this point, has become really just a tax for employing a salesperson, and importantly, it doesn’t provide any protection for the people of the state of Nebraska,” said Anderson.
In addition to the cost of the license itself, the dealerships have to keep track and make sure all of its salespeople are up to date on the paperwork, which takes time and money away from their operations. For the worker’s part, the licensing creates another headache besides cost. If a salesperson wanted to change jobs and work at a different dealership in the same year, they would need to apply for yet another license.
28 other states in addition to Iowa don’t require job licensing for car salespeople. Why not? For starters, car dealerships themselves are already licensed establishments that can face penalties if they engage in improper business practices. If a car dealership has a salesperson that could endanger that license, they won’t stay employed for long.
But placing the burden of acquiring a license onto a salesperson also fails another essential test: there is also no improved public health or safety gain for consumers. Taking a car for a test drive with your salesperson, or haggling over the price, isn’t any less safe in Iowa or the majority of surrounding states that don’t require an occupational license.
Employers also have an incentive to recruit and retain the best salespeople they can find.
“The thresholds that we employ for bringing people into our company are far higher than the threshold required by the licensing,” said Anderson.
Selling cars is a competitive but potentially rewarding career opportunity that can be accessible to workers from all economic and educational backgrounds. By doing away with Nebraska’s unnecessary paperwork and expenses in this profession, lawmakers are putting that opportunity within reach for more Nebraskans.
The Legislature is also making a strong statement in support of job licensing reform in general by passing LB346 without opposition. It’s not every day that states eliminate a license for a profession altogether, and this legislation sets an example for reviewing the nearly 200 different occupations in Nebraska that still require a government license.
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