by Daniel J. Smith

New barbers in Alabama must first acquire a license from the state in order to provide haircuts. For a profession that yields a salary of $24,400 a year and poses only the risk of a bad haircut to consumers, entry costs to enter this type of work should be fairly low.

And yet, licensing requirements include 1,000 hours of barbering school or 2,000 hours of an apprenticeship, passing an entrance exam, an initial licensing fee of $40, bi-annual license renewal fees of $80, and an $150 initial barber shop fee.

At a time when unemployment has been stuck above 6 percent for over 6 years, any obstacle—whether time or money—imposed on Alabamians who just want to get to work is baffling.

And yet, Alabama currently licenses over 140 different occupations including auctioneers, hair shampoo assistants, massage therapists, and tree surgeons. In fact, more than a quarter of Alabama’s workers require permission from an industry board in order to do their jobs.

My new research paper, Reforming Occupational Licensing in Alabama, explores the impact of occupational licensing in Alabama and finds that the practice does enormous damage to economic growth and opportunity in our state. In practice, occupational licensing prevents many Alabamians from working and earning a living, disproportionately harms low-income groups, fails to improve public safety, and reduces choice for consumers.

Occupational licensing is a set of requirements necessary to work in a profession. Requirements can include registration, courses, training, examinations, renewals, and background investigations—often at a significant cost, which can total thousands of dollars.

While the intended purpose of occupational licensing is to protect the public, it’s hard to see the danger auctioneers and hair shampooers pose to society. Certainly the risks do not outweigh the freedom Alabamians should have to enter the workforce and make purchases that fit their needs.

Fees and hours of classroom time just to start working raise the cost to enter the workforce. These upfront costs are a hardship for many hard-working Alabamians, but they disproportionately harm low-income Alabamians. And, these restrictions erode freedom to change careers, limiting occupational choice and decreasing economic mobility.

Occupational licensing’s defenders claim it keeps the public safe, but the available evidence finds that many occupational licensing requirements fail to increase overall quality for consumers, or to improve safety. In fact, in his book, Licensing Occupations: Ensuring Quality or Restricting Competition?, Morris M. Kleiner finds that, on average, occupational licensing has no effect, or even a negative effect, on overall consumer well-being.

Furthermore, occupational licensing can have the opposite effect of placing consumers at greater risk by placing standards on products and services that push prices out of the range of consumers with modest means. Thus, many are forced to go without or do dangerous work themselves, compromising their safety. We’ve seen this with electrical work.

In their study, Occupational Licensing and the Quality of Service, economists Sidney Carroll and Robert Gaston found that states that imposed occupational licensing requirements on electricians reduced the average number of electricians by 1/3rd. The shortage drove up the cost of hiring an electrician to such an extent that consumers in licensed states started installing the wiring themselves, putting themselves at risk. Subsequently, the states with occupational licensing requirements for electricians experienced four more electrocutions per every 100 kilowatt hours of electricity used in the state. The same study found similar effects with veterinary, plumbing, and even dental occupational licensing laws.

Policymakers can better protect consumers, support economic growth and increase individual freedom in Alabama by scaling back or eliminating licensing requirements for certain professions that pose little risk to consumers.

Reforming Occupational Licensing in Alabama is the first in a 13 chapter study looking at how current policies like occupational licensing impact Alabama’s economy and the well-being of Alabamians. The study compilation entitled, Improving Lives in Alabama: A Vision for Economic Freedom and Prosperity, includes the research findings and important policy lessons drawn from in-depth studies on topics including tax and healthcare policy, labor and legal regulations, as well as pension, education and economic development policies. The chapters will be released over the next few months by the Johnson Center at Troy University.

The goal of Improving Lives in Alabama: A Vision for Economic Freedom and Prosperity is to put Alabama on a path for growth, and greater prosperity and opportunity.

Daniel J. Smith is an assistant professor of economics at the Johnson Center at Troy University. Follow the Johnson Center on Facebook and Twitter (@Johnson_Center)