RYAN NORRIS: Onerous rules

Toss license laws that kill jobs

Is there something about fire alarms that make them twice as complicated to install in Arkansas? Are Arkansan fire alarms infinitely more complicated than those in, say, Missouri?

Well, if Arkansas' laws on licensing fire-alarm installers are anything to go by, the answer to both questions would appear to be "Yes."

Let's say you want to install fire alarms for a living. In Arkansas, you'd need 1,825 days (five years) of training and experience, pay $1,443 in fees, and pass four exams. But across all states that require such a license, the average is only about half that--915 days of experience, $557 in fees, and two exams.

Our neighbors to the north in Missouri? They don't license fire-alarm installers, yet have managed to avoid a fire-alarm installation crisis.

Fact is, Arkansas has some of the worst occupational licensing requirements in the country, requirements that in many cases prevent people from improving their lives and getting ahead. According to the Institute for Justice, Arkansas has the sixth most burdensome licensing laws among the 50 states.

Arkansas imposes requirements for several jobs that few other states even bother with, such as nursery workers (who face similar rules in only one other state) and title examiners (who are required to have three times the amount of experience required in other states).

Neighboring states have far less onerous mandates. Mississippi has the 46th most burdensome licensing policies, Missouri 22nd, Oklahoma 18th, Tennessee 39th, and Texas 21st. Our restrictive standards make life harder for workers here than in those states.

Our elected officials in Little Rock will soon have a chance to break down these barriers. This fall, the Arkansas Legislative Council will begin the first phase of a six-year comprehensive review of every one of our state's 307 occupational licenses. The first phase, through August 2020, will focus on 51 of those licenses.

We can expect a lobbying frenzy. Self-interested defenders of restrictive occupational licensing argue that the laws are needed to protect consumers and ensure high quality of service. But according to a 2016 study by the Arkansas Center for Research in Economics, "Very little evidence exists that suggests that licensure has improved the average quality or safety of goods or services received by consumers."

Years of studies show that restrictive licensing mostly serves to drive up costs for customers while insulating license-holders from competition. That makes it tough for newcomers to get a foothold and hits lower-income Arkansans hardest. In Arkansas, 72 of 102 lower-income occupations require a license. Among neighboring states, only Louisiana has a higher share.

Licensing laws have burdened Arkansas families in profound ways. The Arkansas Center for Research in Economics looked at 2014 data and found that, had Arkansas lowered its requirements for low-wage jobs to Missouri's level, it could have opened up 9,974 new jobs. Instead, we lost all those jobs, in the name of policies that do more harm than good.

Licensing laws also prevent formerly incarcerated individuals from having a second chance and reintegrating into society. In several states, "good character" laws are used to deny people with records the opportunity to obtain a license, even when the past crime has nothing to do with the profession. With fewer opportunities, they too often end up back where they started.

Data from the Institute for Justice, the Pew Center on the States, and the National Employment Law Project show that states with the heaviest licensing laws saw an average 9 percent increase in recidivism from 1997 to 2007. Formerly incarcerated people who are employed soon after release from prison are substantially less likely to be re-arrested than those who are unemployed.

Our state's licensing laws hurt the people they purport to help. The Arkansas Legislative Council should be comprehensive in its review, and the Legislature should be equally comprehensive in overhauling an occupational licensing regime that penalizes people just for living in our state.


Ryan Norris is Arkansas state director of Americans for Prosperity.

Editorial on 09/16/2019