Tennessee small businesses support expanding occupational licensing for justice-impacted individuals
Introduction
Small businesses are the foundation of Tennessee’s economy: 664,600 small businesses comprise 99.5% of all businesses in the state, and they employ 41.9% of the state’s private-sector workforce.1 Despite their outsized impact on the economy, small businesses in Tennessee continue to struggle to hire and retain a ready workforce, limiting their stability and growth. There is a parallel problem impacting the state’s labor pool: nearly 1 in 3 Tennesseans have a criminal record, which impedes their ability to earn a living wage or start a new business.2 Even a minor criminal record can create a wall of lifelong barriers that create obstacles to gainful employment.
As a result of being excluded from the labor force, individuals impacted by the justice system are 50% more likely to start their own business and create their own job, highlighting the entrepreneurial nature of those seeking to move past their criminal record.3 However, justice-impacted individuals face even more obstacles in accessing the capital, resources and professional licenses needed to get their enterprises off the ground.
Small Business Majority’s new poll of Tennessee small business owners reveals strong support for legislative solutions that would remove barriers for justice-impacted individuals by making reforms to occupational licensing and debt-based driver’s license suspensions. These politically diverse small business owners believe these measures would enable employers to tap into an underutilized workforce and open up opportunities for entrepreneurship.
Key findings
- Tennessee small businesses are hiring, but they are struggling to find workers. A majority of Tennessee small businesses (57%) say they are likely to hire in the next six months. An additional 57% say the top challenge they face when hiring new employees is finding quality candidates.
- A number of small businesses (43%) say their business requires occupational or professional licensing to own or work for the business.
- Small business owners support policy solutions to make it easier for justice-impacted individuals to access occupational or professional licensing. More than 8 in 10 (82%) small business owners in Tennessee say they would support reforms that would allow people with criminal records fairer access to occupational licenses. Eighty-four percent say state licensing boards should consider the nature of the offense when deciding whether to deny a license, rather than deny a license broadly for any felony conviction.
- Small business owners say driver’s license suspensions for unpaid fines and fees negatively impact employers’ ability to hire employees that can reliably attend work, with 79% of business owners in agreement. They strongly agree that access to transportation is vital to our nation’s workforce (93% total agree/75% strongly agree).
- Small business owners favor proposals to end debt-based driver's license suspensions for unpaid court fines and fees (77% support), among a number of additional solutions to ensure more equitable access to driver’s licenses.
1 “Tennessee Small Business Profile 2023.” U.S. Small Business Administration. https://advocacy.sba.gov/wp-content/uploads/2023/11/2023-Small-Business-Economic-Profile-TN.pdf
2 “Fair Licensing Reform: Opening Pathways for People with Records to Join Licensed Professions.” 2019. National Employment Law Project. https://www.nelp.org/wp-content/uploads/FairChanceLicensing-v4-2019.pdf
3 “Entrepreneurship as a Response to Labor Market Discrimination for Formerly Incarcerated People.” 2020. Hwang, Kylie & Phillips, Damon. https://www.researchgate.net/publication/340270406_Entrepreneurship_as_a_Response_to_Labor_Market_Discrimination_for_Formerly_Incarcerated_People
