Arkansas’ Red Tape Reduction Working Group heard on Monday night that the justification for some worker licenses is faulty.

Dr. Derek Slagle, a Visiting Assistant Professor at the School of Public Affairs at the University of Arkansas at Little Rock, gave members of the Working Group a broad overview of the state of occupational licensing in Arkansas.

According to Slagle, licensed workers as a percentage of the workforce nationwide have increased dramatically from 5 percent fifty years ago to approximately 30 percent today. Arkansas now has 86 licensing and certifying boards that oversee 305 licenses, certifications and registrations. Approximately 651 careers in Arkansas are currently licensed, Slagle said on Monday.

Occupational licenses are essentially a permission slip mandated by the state government before an individual can even start a job. Slagle, who is under contract with the state to advise the working group on occupational licensing issues, said common arguments in support of such regulations center around protecting health and safety. But, Slagle said,

“If you look at a lot of the research, the increase in occupational licensing doesn’t correlate with an increase in public safety even though that’s what we predicate a lot of the licensing on.”

Negative Effects of Occupational Licensing

One effect the licenses do have is limiting the career options for many Americans. Populations that bear a disproportionate amount of the negative effects of licensing include military spouses, immigrants, those with criminal records, and low and middle-income workers.

Slagle said:

“It kind of doubles down on some of these individuals that when they get out of prison or after their conviction…you’re kind of perpetuating their unstable individual economic situation because re-entering society is even more difficult at that point due to the barriers to entry for certain jobs.”

According to ��co-authored by ACRE Scholar and BT����Associate Professor Dr. Thomas Snyder with researchers from the the Mercatus Center, 82 percent of studies agree that occupational licensing has a disparate impact on ethnic minorities, military spouses and immigrants.

The task force will present its recommendations to the governor in the fall. The members of the working group are state senators John Cooper (co-chair), Missy Irvin, Jane English, Trent Garner, and Bart Hester; state representatives LeAnne Burch, Bruce Cozart (co-chair), Milton Nicks, Jeff Williams, and Richard Womack; governor’s appointees Bill Gossage, the governor’s deputy chief of staff for external affairs; Dr. Charisse Childers, director of Arkansas Career Education; Leon Jones Jr., director of Arkansas Department of Labor; and consumer representatives Lula Dixon and Bob Kucheravy. ����

For more on occupational licensing, check out our Labor Market Regulation page. ACRE Director and BT����Associate Professor of Economics David Mitchell, Snyder and Amy Fontinelle also discuss which occupations have the most burdensome licensing laws, how these restrictions affect job seekers, entrepreneurs, and consumers; and how we can reform the worst parts of these regulations in “Unnatural Rights in the Natural State.”

You can check out Slagle’s full presentation here.

How should Arkansas decrease barriers to jobs and entrepreneurship?��

Gov. Asa Hutchinson announced the formation of the Red Tape Reduction Working Group on Feb. 16th to study state occupational requirements. Its next meeting is on Monday, April 23rd.

In an op-ed published in Arkansas Business on March 26th, ACRE Director and BT����Associate Professor of Economics Dr. David Mitchell and ACRE Scholar and BT����Associate Professor of Economics Dr. Thomas Snyder discuss why reforming occupational licensing burdens is such a worthy goal.

According to �� by the Institute for Justice published on Nov. 16th 2017, Arkansas has the third most burdensome occupational licensing structure in the nation for low and moderate income occupations.

Mitchell and Snyder note that job applicants pay these high costs in “time, money and effort” while consumers pay in the form of higher prices and fewer options.

Mitchell and Snyder write:

“Let’s keep licensing where there is strong evidence for impact on safety but only there. The working group should look at all of the cases where Arkansas’ licensing regulations exceed other states’ requirements. It can then ask, “Is there evidence that these additional regulations make us safer?” We might find that the answer is often “no.” At a minimum, we can reduce our regulations to the levels of other states.

Now’s the chance for lawmakers from both sides of the aisle to truly reform our state’s occupational licensing laws. Arkansas would be a better place to live and work without these onerous regulations.”

Snyder was a co-author of with researchers from the the Mercatus Center. The report gives an overview of occupational licensing in Arkansas and makes suggestions for reform. Dr. Snyder is also the author of the ACRE Research Paper, The Effects of Occupational Licensing in Arkansas, and a co-author with Mitchell of the ACRE Policy Review Unnatural Rights in the Natural State, which both examine this issue in more detail. Snyder is also the co-author with BT����graduate Saliou N. Ouattara of “Occupational Licensure and Property Crime” which will be published in the Journal of Regional Analysis and Policy. This paper examines the relationship between licensing requirements and high property crime rates.

You can read Mitchell’s and Snyder’s entire op-ed .