Did you know that the government requires more hours of study for manicurists than for emergency medical technicians? The Institute for Economic Liberty believes it is time to facilitate trades and jobs on the island.
Jorge Rodríguez, president of the Institute for Economic Freedom, during a roundtable discussion with Dr. Juan Lara and economist Edwin Ríos, former Assistant Secretary of Economic Affairs of the Treasury Department (Xavier Araújo).
Setting up a small business in Puerto Rico is becoming increasingly difficult, not only because of the cumbersome permit process, but also because of the number of occupations or technical professions that the government requires a license to operate.
In Puerto Rico there are at least 13 professions that in none of the 50 U.S. states require a license to practice, according to an academic study funded by the Institute for Economic Freedom (ILE)..
However, on the island, it is mandatory by law. Among them are a draftsman, event promoter, public relations professional, agronomist, chemist, naturopath, health educator, cannabis licensing physician, professional training planner, and recreational leader.
In total, there are 129 occupations in Puerto Rico that require a license, according to research conducted by scholars at the ILE-funded University of Puerto Rico (UPR). And in many of those occupations, the requirements are higher and more onerous than in any U.S. jurisdiction.
"Low-income people are the most affected by all these barriers that exist for them to start a business," said engineer and entrepreneur Jorge Rodriguez, founder of ILE, in a Roundtable with Businesses.
The ILE is an apolitical think tank, focused on building knowledge and founded on free market principles. Among other things, the entity wants to contribute to making Puerto Rico a more competitive country.
Therefore, it seeks the elimination of barriers that hinder the creation of businesses and jobs, such as the permitting process, taxes and mandatory licenses.
According to the intelligence accumulated by the ILE, in Puerto Rico, there are more and more occupations that require a license to practice, which prevents many from earning a living from their work. In 1985, only 5% of the occupations practiced at that time required a license; at present, it is 27%, or practically one out of every four occupations on the island, according to Rodríguez.
In addition, there are 27 compulsory collegiate schools in Puerto Rico, while in the United States there are none, which places Puerto Rico at a disadvantage.
The most onerous license to obtain - due to the amount of education and hours of supervised experience required - is the pharmacy technician license, which tops the list of all licenses on the island, according to UPR research. Although it exists in 44 other states, the requirements for a pharmacy technician to practice in Puerto Rico exceed those in the other jurisdictions.
From tour guides to interior decorators
Tour guide, dental assistant, optician, veterinary technologist and interior decorator follow in that order as the occupations with the highest burdens to obtain a license and practice in the country.
"Puerto Rico is the second most expensive jurisdiction for tour guides. And interior designers require more days of education than an emergency medical technician," said Ángel Carrión Tavárez, ILE's Director of Research and Public Policy.
Only three other jurisdictions license interior decorators in the United States. Of the 37 states that license tour guides, most do not require education or experience, while here it is mandatory to have both.
Carrión Tavárez added that the island is among the jurisdictions with the highest professional education requirements for a manicurist license, 1,000 hours; and barbers have more charges in Puerto Rico than in the rest of the 50 states.
Many of these licenses have been found not to protect health or contribute to consumer safety. On the contrary, they prevent more businesses from springing up and limit job creation, according to interviewees.
"In Puerto Rico, people think that for there to be economic development there has to be protection or intervention by the state. What is fundamental is that there be employment opportunities, economic development and greater efficiency in government management," said economist Edwin Ríos, ILE collaborator and former Assistant Secretary of Economic Affairs of the Department of the Treasury.
Turn in the right direction
"The data shows that when (occupational licensing) is eliminated, the economic situation improves," the ILE founder said, citing a 2018 Institute for Justice study that estimated that licensing costs about 2 million jobs each year to the U.S. economy.
President Barack Obama was the one who started occupational licensing reforms, and Donald Trump and Joe Biden have continued, Rodriguez said.
Therefore, in recent years, there have been 39 states that have eliminated or modified several of them, and many others are reviewing them. For example, Iowa and Nevada eliminated the travel agent license; Florida removed the interior decorator license; and Nebraska, Florida, Minnesota and Mississippi no longer require licensing of makeup artists.
"We are not talking about no state intervention," clarified economist Juan Lara, who also collaborates with ILE, explaining that the recommendation is for the government to periodically review the licenses and justify whether they should continue, or if it is better to eliminate them.
They also suggest reducing the cost of such licenses, allowing mobility -that is, that if someone has a license from another state, he or she can practice in Puerto Rico and vice versa-, and that ex-convicts can obtain an occupational license. All four recommendations, however, require legislation.
At the moment, there are legislators willing to submit bills on the periodic evaluation of licenses and on mobility, according to Rodríguez.
Meanwhile, there is already a measure filed to allow those released from prison to obtain an occupational license, Rodriguez said. In the United States, 21 states as well as the District of Columbia also allow this.
Those interviewed feel confident that lawmakers will approve of the proposed changes.
"The people are hungry for change," said Carrión Tavárez.
This article was originally published in Spanish by El Nuevo Dia.
