Arkansas' high property-crime rate ranks among the worst five states, according to the Department of Justice. We can try to blame our high crime rate on poverty and education. A rich and educated Arkansas would have less crime. However, making Arkansans rich and educated are complicated, long-term goals. We can do something much easier to reduce our property-crime rates: Simply lessen occupational licensing requirements.
A recent report by an economist from Arizona State University found a relationship between licensing burdens and recidivism rates. The logic is straightforward: Licensing regulations create barriers to employment by making it illegal to work certain professions without meeting government-imposed requirements.
Lower those barriers and you will give more people a chance to earn an honest living, making them less inclined to engage in crime. If we prevent people from earning an honest living, more people will resort to criminal behavior. Our research at the Arkansas Center for Research in Economics (ACRE) linked licensing regulations with unemployment. Lessen licensing requirements and we will have more people working instead of stealing.
Arkansas has one of the most egregious set of licensing rules. The Institute for Justice has ranked us as the second most burdensome state because we require an average of 689 days of education and experience for a license in a below-median-wage job. Our neighbor Mississippi only requires 155 days. We require more than twice as many days of education and experience than New York does for its license-seekers.
The Mercatus Center just released a policy brief that highlights Arkansas' excessive licensure regime. We regulate more occupations than almost every other state. The Arkansas state government regulates over 300 occupations. You need a four-year degree to classify soil in Arkansas or to give advice as a dietitian, yet an emergency medical technician has much lower educational requirements.
Why does Arkansas have so many occupational licensing regulations? Most people believe that we need those laws to ensure safety and quality. However, studies have shown that licensing does not improve quality. A study published by the Southern Economic Journal linked licensing with worse service received by consumers. Competition enhances quality. Licensing requirements create barriers to competition. Without competition, businesses have less pressure to keep quality high. Lack of competition also raises prices. When prices are high, people resort to do-it-yourself services instead of hiring professionals. Do-it-yourself haircuts are probably not high quality, and do-it-yourself electrical work can be dangerous.
If occupational licensing causes crime and does not ensure safety and quality, why do we have them? The answer is simple. Successful practitioners lobby for licensing requirements to prevent newcomers in their business. Massage therapists want regulations that limit new massage therapists from entering their market. Consumers are typically not the ones who request the state government to increase licensing regulations.
Arkansas needs reform. Licensing regulations are often outdated, harsh, and ineffective. We can be bold and remove licensing requirements for occupations that are not licensed in all other states. If 28 states do not require a license to be a dispensing optician, do we really need to require it? Do customers in those 28 states suffer egregious harms from their unlicensed dispensing opticians? No. Their eyes see just as clearly. The same goes for fire alarm installers, veterinarian technicians, and hundreds of others.
The evidence does not show that our licensing requirements make our services better or safer. And there is a real human cost. It is too harsh to make unlicensed workers criminals, especially since evidence shows licensing to be ineffective.
Arkansas legislators know how to change licensing laws. After public pressure and the threat of a lawsuit, they passed the Natural Hair Braiding Protection Act in 2015 to exempt hair braiding from the cosmetology licensing rules. We knew that making unlicensed hair braiders criminals was wrong. Our legislators did not need to stop there, though. More work needs to be done to ensure other Arkansans can earn a living.
Reforming Arkansas' occupational licensing laws will help people across the state: job seekers, customers, and employers. It will also help taxpayers by saving money on unnecessary incarcerations and reducing the amount of resources spent on administering the regulations. The regulatory boards and commissions in Arkansas cost about $62 million to operate, according to the Arkansas Department of Finance and Administration.
The difficult part of reform is educating legislators of its benefits and getting them to stand up against the special interests.
Dr. Thomas Snyder is an associate professor of economics at the University of Central Arkansas and a scholar affiliate with the Arkansas Center for Research in Economics. Alexandria Tatem is an honors student at UCA. The views expressed are those of the authors and do not necessarily reflect those of UCA.
Editorial on 09/28/2017