GovernmentLegislation & RegulationOccupational Licensing

Time for Arkansas to Embrace Occupational Licensing Reform

More than almost every other state, Arkansas requires workers to obtain government permission before starting work. That needs to change.

Arkansas has the third-highest occupational licensing burden of any state. Few other states impose such strict barriers to individuals just looking to find work so they can support their families.

The need to reform this system was recently highlighted in an Arkansas Business Journal op-ed written by David Mitchell and Thomas Snyder of University of Central Arkansas in Conway (I should disclose that David Mitchell is the director of the Arkansas Center for Research in Economics, for which I am working on an occupational licensing report). In this op-ed, they write:

Arkansas will always license some professions. However, we take licensing to a level that most states don’t. Why does Arkansas need more licensing rules than 47 other states?…

These harsh regulations are only worth implementing if they yield high benefits with no cheaper alternative. The costs of overregulation are high. Job seekers pay a high price in time, money and effort. Subjecting physicians to licensure can make some sense. Subjecting a shampooer to licensing is overkill. Many of these licensed professions are entry-level jobs with little if any potential for real harm. For example, 47 other states regulate dispensing opticians less strictly than we do. Whatever harm a dispensing optician does can easily be remedied by a simple complaint and by customers taking their business elsewhere. No need for the government to regulate the entire profession.

What do they recommend? “Let’s keep licensing where there is strong evidence for impact on safety but only there.”
That is a very good idea. As mentioned in the Mitchell and Snyder op-ed, and detailed in a paper I wrote with then-AAI President Dan Greenberg, licensing imposes a host of problems on workers and consumers. Because of the harm that licensing causes, licensing requirements should only be put in place when there are no alternative ways to protect the safety of the public. Unfortunately, the licensing regime in Arkansas goes well beyond what is necessary for public safety.

Governor Asa Hutchinson has appointed a task force to examine this issue and make recommendations for reform. This is a good first step towards making much-needed changes to Arkansas’s licensing system. Other states have had modest success in rolling back their overly-restrictive requirements for occupational licensing. It’s time for Arkansas to do so, too.

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