By Marc Kilmer
Do we need regulations that accomplish nothing — except to keep people from working? That was the question at the heart of the hearing I watched last week — namely, last Thursday’s hearing of the House Public Health, Welfare, and Labor Committee.
The committee was discussing HB 1158, introduced by Rep. Richard Womack. As the bill’s language says, its purpose is to ensure that a person may pursue a lawful occupation free from unnecessary regulation and protect the public from the use of occupational licensing as a way to reduce competition in the workforce.
The bill didn’t pass out of committee — but that’s probably because the committee hearing was sparsely attended. According to the sponsor, the bill will come up for another vote this Thursday, February 10.
Why do we need deregulation of occupational licensing? Well, here are a few examples:
- Most states don’t require a license to be a plant nursery worker. Arkansas is one of only two states that require licenses to work in a plant nursery.
- Most states don’t require a license to be a funeral attendant. Arkansas is one of the 9 states that does.
- In my opinion, you don’t need to have five years worth of education and experience to be a drywall contractor. With respect to regulating drywall contractors, Arkansas charges three times as much as any other state ($833) for licensure and require more contractor time and education than any other state – we are tied for worst place with Maryland.
- Thirty-four states require licensure to work as a door repair contractor. But two-thirds of those states that require licensure require no education or training. Arkansas has the most burdensome regulations in the nation. Here in Arkansas, we demand five years of education and training to repair automatic doors.
- We require much more education and experience in order to be a manicurist – 140 days lost – which places us at the second most burdensome requirement in the nation. We require less than a quarter of this to serve as an emergency medical technician. Think about the demands that we make of EMTs. Does it really take 140 days — four times as much education and experience — to learn how to give a manicure?
Such regulations raise prices and kill jobs, but seem to serve no legitimate public purpose. All too often, established businesses in an industry use occupational licensing to prevent new people from entering their profession. Incumbent businesses do this by convincing legislators or regulators to place high barriers onto new business owners wishing to obtain a license. Legislators and regulators argue that these barriers will protect the public. In reality, they often merely protect established businesses from competition.
Unfortunately, courts today give an extreme amount of deference to regulators’ and legislators’ claims of protecting the public interest in legislation. Unless someone challenging the strict licensing scheme can prove that there is no conceivable legitimate interest that could possibly be served by this law or regulation, then the law or regulation stands. That’s a very low bar, since legislators and regulators are not forced to prove that a legitimate interest is actually being served. HB 1158 would remove this presumption.
Under HB 1158, an Arkansan who thinks he or she is being denied the opportunity to work by an agency or licensing board could raise the right to occupational freedom as a defense. If the defendant could prove that some particular regulation was hindering his or her ability to work, the state of Arkansas would then have to demonstrate that the regulation is the least restrictive means possible to achieve the goal of protecting the public in order for the regulation to remain in effect. The deference would be given to those seeking to work, not to established business interests looking to keep competition to a minimum. Importantly, regulations that genuinely protected health and safety would stay intact, but regulations that served no public interest could be struck down.
At the hearing last Thursday, some legislators worried about a flood of lawsuits triggered by the law. Rep. Dan Sullivan, in the course of a few well-phrased sentences, supplied the perfect questions to quiet those fears:
Is it true that one lawsuit would have the impact of changing the threshold? Then that commission would then understand legally that they have set the bar at too high a level? So one lawsuit could change the threshold that would then reduce the amount of regulations that would over time reduce the cost to consumers considerably?
Rep. Sullivan understood the law perfectly. As he went on to say, “One lawsuit that the Attorney General’s office defends will cause these boards most likely to back off enforcing these regulations.”
Regrettably, the remarks that committee vice-chairman Deborah Ferguson made were less praiseworthy. Rep. Ferguson, a dentist, took exception to what AAI President Dan Greenberg had said about the need for regulatory reform and occupational freedom. Greenberg had given several examples of regulatory overreach, including the case of Fort Smith dentist Ben Burris, which we’ve previously written about. Greenberg had previously explained that the state board that regulated dental practices (the State Board of Dental Examiners) had threatened Dr. Burris with the loss of his license to practice orthodontia, because that board did not want him to offer dental services. Burris had previously received complaints that his prices were too low from other dentists; his prices for dental services were less than half of what other dentists were charging. When the board told Burris that he was no longer allowed to provide dental services, it appeared weird to me and may appear weird to you, because in order to become an orthodontist, you must first become a dentist: it’s hard to see how the public benefits when government prevents a trained and qualified dentist from offering dental services to the public at a competitive price.
“I don’t want people to leave here thinking that what he said about the dental board is accurate. Dr. Burris was not denied cleaning teeth because he was cheaper. He was denied because he was in violation of the board rules that when he became a specialist orthodontist that he would no longer practice general dentistry, that he would practice orthodontics and work on referrals from general dentists, that he would take care of the comprehensive dental needs at a general practice level.”
I suppose it is possible that Rep. Ferguson simply misheard Greenberg, because she appeared to believe that Greenberg said something that he actually never did. (I think this might have been made clearer if Ferguson had simply followed committee rules and questioned Greenberg, rather than breaking those rules and giving an impromptu lecture which mischaracterized what Greenberg said without giving him an opportunity to respond.) Greenberg’s point about the dental board, as you could see if you watched the hearing, was not that Burris was prevented from offering dental services for a cheaper price: rather, Burris was prevented from offering any dental services for any price. But I also think there is little reason to doubt what Burris has said previously about the dental board’s motivations: namely, the board tried to shut Burris’s business model down after other dentists complained about Burris’s competitive prices. If the board was trying to demonstrate how regulation can benefit special interests but harm the public, it did an excellent job. Bear in mind that Rep. Ferguson appeared to be defending the regulatory scheme that blocked Burris from offering dental services at lower prices, despite the fact that there was no dispute that Burris was qualified to offer them. It is hard for me to imagine a crueler and more indefensible posture: what possible public interest is served by preventing qualified dental personnel to offer their services at competitive prices?
You can see many more examples of the abusive way Arkansas over-regulates occupations in the Institute for Justice’s report at this link. But here’s something to look at that might be even more important: if you want to see lower prices, consumer freedom, and a healthier economy, you’ll want to monitor the Thursday, February 10 meeting of the House Public Health Committee later this week, in which Womack will get a second chance to pass his bill out of committee. That committee has more Republicans than Democrats; those who watch that hearing will have the opportunity to see whether Republican rhetoric about smaller government and personal freedom represents honest convictions — or just hot air.