AlamogordoTownNews.com Special Report -HISTORY OF OCCUPATIONAL LICENSING & THE IMPACT ON ENTREPRENEURSHIP & THE FORMERLY INCARCERATED

From the point of view of criminal justice reform this series covers the impact on post incarcerated individuals from the existing framework of Occupational Licensing and how reform will assist in job creation. Government leaders provide a lot of lip service about the unemployed, blight on our cities, ex-felons getting back to work yet the states have significant barriers blocking successful re-entry that ultimately perpetuate repeat offenders and additional crimes.

This series is a detailed multiple week series covering the criminal justice system, educating the reader on potential reforms and how job creation opportunities and barriers removed create gainful employment and lower crime rates.

However, as a reader, review the proposed reforms from a standpoint of job creation and improving entrepreneurial opportunities within New Mexico and beyond.

For those outside of the state of New Mexico, this is a model position paper proposed in California and elsewhere and applicable to what every state and the Federal Government should do, to reform Occupational Licensing and to enhance job creation opportunities across the nation.

From a criminal justice standpoint: most individuals that were formerly incarcerated want to work.

Many have acquired professional skills while incarcerated especially those in the Federal Prison Programs, which would add significant value to most professional organizations; if allowed to pursue the profession of choice, without governmental sanctioned barriers to entry.

Many individuals, while incarcerated receive college degrees through community college partnership programs. Others have in depth skills training on legal system filings through experience, others have gained skills in cosmetology, literacy teaching and other trades, of which they were proficient in learning while incarcerated. However, these skilled individuals are blocked from gaining fair pay employment due to governmental sanctions barriers in licensing them preventing them from entering those fields.

Historical perspective as related to jobs creation and protectionism within industries...

Interestingly state licensing for all but the most technical professions of medicine and law has expanded significantly in recent decades. Per the Goldwater Institute in a study by Morris Kleiner and Alan Kreuger, two of the foremost scholars on state licensing, have noted, “in the early 1950s only about 5 percent of workers were covered by state licensing laws. Today, that number exceeds 20 percent of workers.”

State policymakers play a critical and longstanding role in occupational licensing policies, dating back to the late 19th century when the Supreme Court decision in Dent v. West Virginia established states’ rights to regulate certain professions. Shortly after, states began developing their own systems of occupational regulation and licensing.

State policymakers play a central role in developing and shaping these systems by:

• Establishing licensing requirements for specific occupations authorizing regulatory boards to license applicants and oversee compliance • Reviewing the merits of existing and proposed licensure requirements

• Proposing strategies or guiding principles to improve the state’s overall approach to regulating professions

“Of the 1,100 occupations that were licensed in at least one state in 2016, a small number (less than 60), were licensed in every state, illustrating the considerable differences in licensure requirements from state to state”, according to the same source.

Every state license emergency medical technician, bus and truck drivers, and cosmetologists, while three or fewer states license professions such as home entertainment installers, nursery workers, conveyor operators and florists.

Morris Kleiner, economics professor at University of Minnesota’s Center for Human Resources and Labor Studies, asserted that, “With growth of licensing laws has come a national patchwork of stealth regulation that has, among other things, restricted labor markets, innovation, and worker mobility.” Kleiner further asserted that, “licensing resulted in 2.85 million fewer jobs nationally, with an annual cost to consumers of $203 billion.”

The Institute of Justice’s 2012 License to Work Report ranked states based on the burdens imposed across 102 low- and moderate-income licensed occupations. The state comparisons revealed “several inconsistencies across states: Many occupations are licensed in a small number of states, the same occupations have significantly different training requirements across states, and licensure requirements do not always align with public health or safety concerns.”

The inconsistency in licensing and the misnomer that the structure is in place to protect the public is what has created this anti-competitive layer of bureaucracy.

Researchers point out that “cosmetologists require an average of 372 training days, significantly higher than emergency medical technicians, who need an average of 33 training days.”

Researchers find little evidence that licensure improves the quality of services or protects consumers from harm.

In fact, evidence suggests that the most onerous licensure laws may lead to lower-quality services and increased public safety risks.

Licensing reduces the supply of service providers while simultaneously increasing the average operating costs for professionals.

The result of limited consumer choice and increased prices can be a provision of licensed services at a rate below true market equilibrium; in other words, consumers forego necessary services because prices are too high, or no one is available for hire.

This situation can pose a threat to public safety in certain occupations. For example, the inability to legally hire an electrician for repairs may lead to electrocution or fire. Similarly, licensing that limits the supply and increases the cost of veterinarians may prevent animal owners from vaccinating against contagious diseases like rabies.

According to a 2015 paper published by the Brookings Institution, “economic studies have found little impact of occupational licensing on service quality in occupations that are not widely licensed; even in occupations that are widely licensed, studies have found few impacts of tougher requirements for licensing on health measures or quality outcomes.”

Further, a 2014 report from the U.S. Bureau of Labor Statistics on the safety of professionals in licensed industries concluded that “the impact of occupational regulation on deaths and injuries is statistically insignificant.”

Economic research on professions that directly provide health and safety services has shown that licensing requirements may not achieve their intended goals.

A study on dental licensing found that dental office visits were reduced, and dental health outcomes were hindered because of “licensure restrictions reducing employment.”

Similarly, a study of private security guard licensing found that lowering licensing burdens increased the supply of private security guards and was related to a significant drop in violent crime.

According to a 2015 brief published by the Council on Licensure, Enforcement and Regulation, “civic leaders, elected officials, and courts have struggled to balance legitimate interests in protecting public health and safety with the preservation of free practice.”

Striking the right balance represents an opportunity for executive and legislative policymakers in New Mexico and beyond to achieve important public policy goals, including consumer protection, job creation, criminal justice reform, workforce mobility and economic growth.

Removing employment barriers for unique populations, such as immigrants with work authorization, military families, and people with criminal records, offers a powerful lever to achieve multiple policy goals. These include employment growth, reduced recidivism for employed ex-offenders, enhanced geographic mobility, and economic stability and opportunity for individuals and their families.

The Goldwater Institute findings go further; “Policymakers over the past few decades have rationalized that the growth of government licensing is necessary to protect the health and safety of the public at large. But the most robust explanation—which also explains the persistence of state licensing regimes—is that occupational licensing serves the purposes of keeping out new competitors.”

As such, it is favored mainly by incumbent businesses for that sole purpose. Note that any change as proposed will be a battle and the lobby dollars will come from business interests that are attempting to limit competition not for what is best for the state economy or job creation.

The Goldwater Institute findings continue; “in truth, the health and safety justification rarely hold up under scrutiny. In cases where the policies have been studied, there is scant if any evidence that they enhanced the public’s safety.”

From a criminal Justice Perspective: Structural barriers to securing employment, particularly within the period immediately following release are rampant for good paying jobs, when indeed they are most eager in their search, and the need for gainful employment is at its greatest.

For individuals, especially BIPOC individuals, women and members of the LBGTQ communities with a status of “formerly incarcerated,” their chance for fair paying employment is further hampered.

This perpetual labor market punishment creates a counterproductive system of release and homelessness in urban cores or significant poverty, hurting everyone involved: employers, the taxpayers, and certainly formerly incarcerated people looking to break the cycle of crime and become productive engaged citizens again. This additional burden hits rural communities disproportionately as well due to fewer job opportunities. Thus, the rural states of the mid-west and the south and poorer inland communities of New Mexico carry these jobless opportunities burden in a more visible manner, then wealthier communities. However, the homeless number in urban cores is increasing drastically of late as these individuals flee the rural areas in hopes of urban opportunities

Criminal justice research suggests that finding and maintaining a legitimate fair paying job can reduce a former prisoners’ chances of reoffending. The higher the wage, the less likely it is that individuals will return to crime. The three years following release from prison is the window in which ex-prisoners are mostly likely to re-offend. Successful entry into the labor force has been shown to greatly increase the chances that a prisoner will not recidivate. Yet government-imposed barriers to reintegration into the labor force, particularly occupational licensing requirements, can be among the most harmful barriers faced by ex-prisoners seeking to enter the workforce.

According to one estimate, there are currently over 12 million ex-felons in the United States, representing roughly 8% of the working-age population. (Uggen, Thompson, and Manza 2000).

It is estimated that roughly 5 million ex-felons live within the states of California, Arizona, New Mexico and Texas. Reintegration of released prisoners back into the workforce will be crucial to the eventual success of any criminal justice reform effort.

A first of its kind of study was commissioned by the Center for the Study of Economic Liberty to explore the relationship between three-year recidivism rates for new crimes and relate it to occupational licensing burdens by combining data from the Institute for Justice, the Pew Center on the States, and the National Employment Law Project. This study estimates that “between 1997 and 2007 the states with the heaviest occupational licensing burdens saw an average increase in the three-year, new-crime recidivism rate of over 9%. Conversely, the states that had the lowest burdens and no such character provisions saw an average decline in that recidivism rate of nearly 2.5%.”

Some staggering statistics are to be found in a research document titled The Growth, Scope, and Spatial Distribution of People with Felony Records in the United States, 1948–2010 by Sarah K. S. Shannon1 & Christopher Uggen & Jason Schnittker & Melissa Thompson & Sara Wakefield & Michael Massoglia...

“...15 % of the African American adult male population has been to prison; people with felony convictions account for 8 % of all adults and 33% of the African American adult male population.”

The report further explains...

“People with any kind of criminal history experience wide-ranging penalties and disruptions in their lives, especially given the widespread availability of criminal background information (Lageson 2016; Uggen et al. 2014).

Nevertheless, people convicted of felonies face more substantial and frequently permanent consequences (Ewald and Uggen 2012; Travis 2005; Uggen and Stewart 2015).

A felony is a broad categorization, encompassing everything from marijuana possession to homicide. Historically, the term “felony” has been used to distinguish certain “high crimes” or “grave offenses” from less-serious, misdemeanor offenses.”

People with felony records are set apart not only by the stigma and collateral consequences that come with a criminal conviction but also by the extreme concentration by sex, race, and socioeconomic status.

Current prison and community corrections populations are overwhelmingly male: 93 % of prisoners, 89 % of parolees, and 76 % of probationers (Carson and Golinelli 2013; Maruschakand Bonczar 2013).

Recent estimates have shown that 30 % of black males have been arrested by age 18 (vs. 22 % for white males) (Brame et al. 2014). This figure grows to 49 % by age 23, meaning that virtually one-half of all black men have been arrested at least once by the time they reach young adulthood (vs. approximately 38 % of white males) (Brame et al. 2014).

Western and Pettit have shown that incarceration has become a routine life event for low-skilled black men—more common than serving in the military or earning a college degree (Pettit and Western 2004; Western 2006).

The cumulative risk of imprisonment for black men ages 20–34 without a high school diploma stands at 68 % compared with21 % of black men with a high school diploma and 28 % for white men without a high school diploma (Pettit 2012).

According to a report by PrisonPolicy.org formerly incarcerated people are unemployed at a rate of over 27% — higher than the total U.S. unemployment rate during any historical period, including the Great Depression.

The American criminal justice system holds almost 2.3 million people in 1,719 state prisons, 109 federal prisons, 1,772 juvenile correctional facilities, 3,163 local jails, and 80 Indian Country jails as well as in military prisons, immigration detention facilities, civil commitment centers, state psychiatric hospitals, and prisons in the U.S. territories.

(The number of state facilities is from Census of State and Federal Correctional Facilities, 2005, the number of federal facilities is from the list of prison locations on the Bureau of Prisons website (as of March 14, 2019), the number of youth facilities is from the Juvenile Residential Facility Census Data book (2016), the number of jails from Census of Jails: Population Changes, 1999-2013, and the number of Indian Country jails from Jails in Indian Country, 2016)

Roughly 95% will eventually be released. Over 600,000 people make the difficult transition from prisons to the community each year according E. Ann Carson. 2018. Prisoners in 2016. Bureau of Justice Statistics.

Another startling statistic is every year, over 600,000 people enter prison gates, but people go to jail 10.6 million times each year. Via The Jail Reentry Roundtable, Bureau of Justice Statistics statistician Allen Beck estimates that of the 12-12.6 million jail admissions in 2004-2005, 9 million were unique individuals.

Per PrisonPolicy.org more recently they analyzed the 2014 National Survey of Drug Use and Health, which includes questions about whether respondents have been booked into jail; from this source, they estimate that approximately 6 million unique individuals were arrested that year.

In a PrisonPolicy.org research document it was found that; “among working-age individuals 25-44 the unemployment rate for formerly incarcerated people was 27.3%, compared with just 5.2% unemployment for their public peers during the study period. That such a large percentage of prime working-age formerly incarcerated people are without jobs but wish to work suggests structural factors — like discrimination — play an important role in shaping job attainment.”

While I personally have witnessed discriminatory practices in the hiring and interview process; they are also prevalent once individuals are employed in relation to promotions, pay equity and task assignments. However, that is not the primary focus of this series it is worth noting and its impact on fair wage employment of those formerly incarcerated.

In a paper titled The Mark of a Criminal Records by Devah Pager, Northwestern University, he examined the effect of a criminal record in the labor market by sending out paired job testers (two white testers and two Black testers) where one tester in each pair was given a fictitious felony record. Pager’s audit methodology allowed her to examine the independent effects of race and criminal records. Importantly, Black job testers without criminal records were less likely to receive callbacks from employers than white job testers with criminal records.

Although employer’s express willingness to hire people with criminal records, evidence shows that having a record reduces employer callback rates by 50%. What employers say or believe they are doing contradicts what they actually doing in practice per another research report by Devah Pager and Lincoln Quillian titled, Walking the Talk? What Employers Say versus What They Do. American Sociological Review.

Based upon our experience with Goodwill Industries of the Greater East Bay,
who's mission was to help place formerly incarcerated; we found that individuals want to work. Most of the unemployment among this second chance population is a matter of public policy, and practice, biased hiring practices and not in the lack of aspirations for a better life.

Statistically, Black women who were formerly incarcerated are hit especially hard with severe levels of unemployment, whereas white men experience the lowest. Formerly incarcerated Black women experience an unemployment rate 7 times that of the general population. Formerly incarcerated Black men experience unemployment 5 times that of the general population.

When formerly incarcerated people do land jobs, they are often the most insecure and lowest-paying positions according to Gretchen Purser. 2012.

“Still Doin’ Time:” Clamoring for Work in the Day Labor Industry. The Journal of Labor & Society.

According to an analysis of IRS data in a report by Adam Looney and Nicholas Turner. 2018 Work and opportunity before and after incarceration, “the majority of employed people recently released from prison receive an income that puts them well below the poverty line.”

This is even though many of these individuals have skills or experience in higher paying and professional occupations of which they are barred from due to government supported barriers to entry into those higher paying or more professional jobs.

So, what have we learned?

• Governmental sanctions via barriers in licensing harm job creation and economic growth

• In the early 1950s only about 5 percent of workers were covered by state licensing laws. Today, that number exceeds 20 percent of workers.

• Licensing does not necessarily create a safer workplace nor safeguards to the public good.

• Rural communities are especially hard hit in job creation due to the over-reach of licensing boards

• 12 million people are ex-felons clamoring for work, 2 million within the state of New Mexico and adjoining states.

• The staggering numbers of Black individuals and especially Black Women that struggle the most in re-entry. We've seen the workplace, due to governmental sponsored barriers and ingrained bias, both racially and due to the stigma of incarceration, is not generally conducive to hiring formerly incarcerated individuals. • Th pathway out of poverty is stymied by these roadblocks which further harms socioeconomic development of these impacted individuals and thus their families and their communities.

As a reader of this ongoing series please also review the proposed reforms from a standpoint of job creation and improving entrepreneurial opportunities within New Mexico and beyond.

As we look at leadership in our offices of mayor, city commissioners, state and federal legislators we should be discussing this issue and pressing hard for reforms. It begins locally. What is the stance from our mayoral candidates on this issue? Or will it also be crickets and excuses as is the case for most elected individuals regardless of level of government. It is time we hold government to a higher standard for actual job creation instead of roadblocks to full employment. 

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