The policy of requiring occupational licensing for various jobs is billed by consumer protection advocates as a matter of health and safety. This perspective ignores the economic consequence of occupational licensing. The fact that in most cases such a restriction does not improve consumer safety, but merely operates as a barrier to entry in the market. Too often disproportionately impacting employees of lower socioeconomic status. Even preventing start-up businesses from laying any roots in industries that have licensing requirements that favor established enterprises. It is estimated that approximately 25 %of all jobs require some form of licensing. Is it really necessary to require barbers to obtain licensing to competently do their jobs?
It is always important to question who stands to benefit from the consequences of a specific policy. This imperative inquiry illustrated in Bruce Yandle’s economic theory of Bootleggers and Baptists. This conceptualization demonstrates the contrarian dynamics of advocacy for regulation. Frequently unlikely alliances are forged for the sake of regulation advocacy. Generally, one interest group has a moral or ethical agenda (the baptists). The other half of this coalition tends to utilize the moral agenda as a smoke-screen to obscure how the policy benefits them (the bootleggers). Detailing the irony of how seemingly opposing forces can often come together on a single issue.
Occupational licensing much like other issues that bring together unlike factions creates a similar dynamic. The moral advocates are concerned about protecting the average consumer from dangerous products and services. As well as the self-interested bootleggers who strive to reduce competition.
The Story of Dr. Carol Gandolfo:
Psychologist Carol Gandolfo moved to Arizona from California back in 2007. Due to her lack of in-state licensing, she continued to manage her California-based practice remotely. She also served as an expert volunteer for various in-state organizations, such as the Northern Arizona Critical Incident Stress Management team. The same organization that provided therapeutic services for the surviving first-responders present at the 2013 Yarnell Hill Fire. Dr. Gandolfo was a 20-year veteran of the field of psychology and had extensive training and experience working with prisoners, homeless shelters, private practice, and even those with developmental challenges. The only obstacle preventing her from practicing in Arizona was the state’s psychology licensing board.
In 2019, there appeared to be light at the end of the tunnel. Governor Doug Ducey working with the Goldwater Institute developed a bill that would universally recognize out-of-state licensing. The bill that went into effect August of 2019 was HB2569. While the bill does not automatically recognize out-of-state licensing, it still eliminates many of the steps required to start the process from scratch. HB2569 makes Arizona the first state to recognize out of state licensing. Anyone familiar with Arizona’s demographics can see why licensing reciprocity is crucial for the state economy. The population of Arizona is primarily comprised of out-of-state transplants. Most of the domestic migrants coming from western coastal states or the economically depressed Midwestern rust-belt. It was estimated back in 2014, that only 38% of Arizona residents were born in-state. That 15 % of all Arizona residents were born in foreign countries. Considering the number of people moving to Arizona, a universal recognition bill would be sensible.
However, even after the bill passed Dr. Gandolfo still was struggling with the licensing board. In November 2019, the board rejected Gandolfo’s application for licensing. The board cited two reasons for this 5 to 1 vote to deny Gandolfo the right to practice in Arizona. The first reason was she had lived in the state for too long. Even though no such constraints were specified in HB2569. Governor Ducey even criticized the board’s decision to reject her application on these grounds.
This gamesmanship by some Board members falls far below the standard expected of Board members,” Ducey wrote.
The second issue was the institution from which Gandolfo earned her PsyD back in 1998. Ryokan College which was determined by the board to not be regionally accredited. The board even suggested that it would be reasonable to investigate whether her volunteer work and practice in California violated state law.
Bootleggers and Baptists:
The bootleggers in this scenario would be the psychologists who were certified in-state. Advocacy by these individuals for rejecting measures such as HB2569 is nothing more than domestic protectionism. Attempting to keep the flood of psychologists coming from states such as California out of the Arizona market. Any attempt to claim that Arizona has higher standards for licensing is flimsy at best. Arizona has licensing procedures that mirror the standards held in California. The only rational explanation for psychologists in Arizona to pose opposition to HB2569 would be fear of an increase in competition.
It is difficult to say who the baptists are in advocating for rejecting universal recognition of out-of-state licensing. Please keep in mind the members of the licensing board are licensed, psychologist. For the sake of argument, I will assign the role of baptists to the licensing board members. There does seem to be a prevalent argument on their end about the quality of mental health services. To quote one of the board members:
“Arizona has now said that the standards to become a psychologist in this state are now equivalent to the lowest common denominator in the jurisdictions across the country,”
This premise is only valid if the practitioner is indeed coming from a state with lower standards. Also, this statement alone provides a moral justification for keeping out-of-state psychologists out of the Arizona market. The residents of Arizona need to be protected from subpar mental health services. At least in the view of the quoted board member. This moral repudiation of HB2569 does not convey any facts or figures. Nor any search suggesting that the standards of states outside of Arizona lead to inferior results. Making these claims suspect.