by Tom Joyce
Arizona took a nation-leading step into universal occupational licensing. A new study says it’s resulted in significant job growth.
In 2019, Arizona became the first state in the country with universal license recognition; if someone has a work license in another state, they can use that license in Arizona. Since then, 4,723 new work licenses have been issued under the law, according to a study conducted by the Common Sense Institute and the Goldwater Institute.
The study projects that the law will continue to help Arizona’s economy in the coming years. It says that over the next 10 years that the law will increase Arizona’s employment by at least 15,991 workers. It also says that this will increase the state’s population by at least 44,376 people and increase the state’s Gross Domestic Product by at least $1.5 billion.
CSI notes that healthcare and construction are the two fields that benefit most from universal licensing recognition; real estate is also in the top five.
Additionally, CSI says that occupational licensing artificially restricts the labor pool, reduces real income, as well as the state’s Gross Domestic Product; it says that occupational licensing reduces the state’s employment by 188,295 jobs, reduces the GDP by $16.2 billion, and cuts earnings per person by $1,711.
“The law is a resounding success. Economic mobility can require geographic mobility, and this law opens up that potential,” said Shoshana Weissmann, fellow at the R Street Institute. “Rigid laws based on location of where qualifications were obtained rather than on the qualifications themselves stop people from accessing supply of professionals, raise prices on consumers, and prevent mobility. According to this report, Senator Warren(Petersen) and Governor Ducey made Arizona a leader and it’s going to pay off very well for their state.”
R Street studies occupational licensing reform and advises officials when they’re crafting policies.
Occupational licensing reform often has bipartisan support; CSI notes that it’s an issue where politicians in both major parties can come together and get something done.
“The burdens presented by occupational licenses have been an issue of national discussion in recent years, and one that has bridged the partisan divide,” CSI wrote. “Both President Barack Obama and President Donald Trump advocated for reforms to allow more Americans to get to work more quickly considering the sharp increase in these licensing requirements over the last several decades.”
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Tom Joyce is a contributor to The Center Square.
