A state government agency tasked with ensuring “competent, professional and regulated commercial services are available to Alaska consumers” is increasing the cost of obtaining government permission to work in the state.
In 2015, Alaska’s Division of Corporations, Business, and Professional Licensing approved regulations taking effect in January 2017, increasing the cost of government-mandated occupational licenses for professional service providers, such as midwives and morticians. Alaska state law allows the government agency to set occupational licensing rates without oversight from lawmakers.
Once the regulations took effect, the cost of government permission for Alaskans practicing midwifery will by $2,100 per biennial renewal, the cost of practicing homeopathic therapy will rise by $730 per biennial renewal, and the cost of working as morticians will increase by $50 per biennial renewal.
Jeremy Price, state director of the Alaska chapter of Americans for Prosperity, says occupational licensing boards work to protect incumbent providers from competition brought by new entrants to a market, instead of guarding consumers’ health and safety.
“The common, false argument these boards and commissions use to increase fees, fines, and education requirements is [they work] to protect the public, but what they’re really protecting are their own self-interests,” Price said.
Calls for More Vigilance
Price says Alaska lawmakers have ceded too much power to unelected commissions such as the Division of Corporations, Business, and Professional Licensing, which is organized under the state’s Department of Commerce, Community, and Economic Development.
“Most legislators trust these boards and commissions too much,” Price said. “Most legislators seem to go along with whatever is recommended, and they disregard any thought of these board members acting with conflicts of interest. Our elected officials should be more vigilant at protecting business owners from boards and commissions.”
Costing Consumers, Too
David Harrington, an economics professor at Kenyon College, says business owners aren’t the only ones who pay for these price hikes for professional licenses.
“You can make an argument that the fees are costlier than they appear on their face,” Harrington said. “Financing a system that is organizing all sorts of entry barriers, that’s raising the cost to consumers.”
Harrington says lawmakers should consider the harm government agencies and boards cause by restricting the supply of available services.
“These boards cause prices to go up by adding entry barriers,” Harrington said. “In a lot of states, the people that craft and guide legislation and policy are often practitioners within those industries. My advice to legislators is to be skeptical of regulations that appear to be emanating from the industry itself, and that they think broadly about the restrictions that occupational licensing imposes.”