House Chips Away at Licensing Mandates

It's easy to pass new state mandates and tough to get rid of them once passed. But the Michigan House is at least making some progress.

The state has a lot of licensing mandates that drive up costs for consumers while not providing any health or safety benefits. But why is this?

The reason is found in the economic theory known as "public choice," which applies economic reasoning to the political process. One part of public choice theory can best be described as "concentrated benefits and diffuse costs." In short, when a small segment stands to benefit greatly from some policy, they will fight much harder for it than the larger segment that is harmed will fight against it since the harm is either hidden or so small that it is not rational for the individuals making up the larger segment to spend a lot of time fighting the policy.

So consider licensing. A House committee is currently considering a bill that would eliminate license requirements for dietitians and nutritionists. The bill to license these workers was only passed in 2006 and has not taken effect for a variety of legal reasons and unresolved problems.

As Michigan Capitol Confidential has noted, other states licensing people who give food advice have run into trouble. Yet, when the committee met to discuss the bill last week, MIRS News reported that a "standing room only" crowd filled three rooms to protest the bill. That's because a small group gets to decide on the tests, requirements and fees paid, standing to benefit financially from the licensing — whether it helps protect people or not. That group has an incentive to gather people and push for laws that give them this power, while, conversely, the majority of regular people are unaware of the bill and are mostly harmed only slightly if the repeal does not pass.

That's what makes recent votes from State House members stand out. In the past year, the House has voted to repeal licensure on interior designers, foresters, community planners, auctioneers, ocularists, proprietary school solicitors, immigration clerical assistants, residential lift installers and others. Bills regarding landscape architects and polygraph examiners also are being considered in committees.

Unfortunately, the Michigan Senate has not taken up any of the above bills. Repealing licensing mandates means more people able to find work more easily; something all politicians should support.