Nearly 1 million Michiganders are subject to occupational licensing laws
Mackinac Center forum considers occupational licensing and its discontents
Labor shortages in various parts of the economy have led to increased interest in reforming occupational licensing, as the National Conference of State Legislatures observed in March 2022. Michigan is no stranger to the problems of occupational licensing, and experts from the Mackinac Center and elsewhere laid out some of them in an Oct. 6 “Issues and Ideas” forum at The Louie Building in Lansing.
State-imposed regulatory barriers, including education and training requirements, contribute to a worker shortage and increased costs for consumers, said participants in the event, “Occupational Hazard: State Licensing Laws in Michigan,” which is now available on video. Close to one million Michigan residents are subject to these requirements, with an untold number excluded from their chosen line of work.
“When education requirements are too high for the job or unnecessarily restrictive, they end up preventing people from getting into that profession,” said Conor Norris, who studies the labor market at West Virginia University.
Norris is part of the Knee Center for the Study of Occupational Regulation, at the university’s John Chambers School of Business and Economics.
Educational requirements tied to occupational licensing can reduce the supply of workers, Norris said. He put the figure between 17% and 27% for occupations with state-imposed requirements.
Regulatory and legal barriers to work cost America two million jobs each year, Norris said. The barriers include education requirements, training requirements, and moral-character requirements in licensing schemes. The country suffers $7 billion in lost output and $185 billion in misallocated resources, he said.
Businesses that face rising consumer demand will have a hard time satisfying customers when demand increases, experts at the event said. Licensing slows the entry of new workers into a field of work, increasing costs to the consumer.
Some licensing requirements are enacted even when there is little history of consumer fraud, abuse, or mistreatment of workers, said Jaimie Cavanaugh, an attorney with the Institute for Justice.
Cavanaugh cited an industry group called the U.S. Lactation Consultant Association, which lobbied the Georgia Legislature to implement stringent new requirements for lactation consultants. There were no widespread reports of trouble caused by unlicensed consultants, but lawmakers responded in 2018 with a new law anyway.
The special interest group, Cavanaugh told NBC News, pushed the state to require the 800 specialists in Georgia to complete “two years of college-level courses and at least 300 hours of clinical experience.”
The group cited its desire to increase members’ reimbursements from insurance companies as a reason for its campaign. The Institute for Justice filed a lawsuit in 2018 against the state on behalf of a lactation consultant, Mary Jackson, and her nonprofit, Reaching Our Sisters Everywhere. Jackson and IJ won at the state’s highest court on May 31, 2023.
The court issued a unanimous opinion, saying that under the Georgia Constitution, people have the right “to pursue a lawful occupation of their choosing free from unreasonable government interference.”
Michiganders seeking to work in more than 180 occupations face licensing requirements, according to a September 2023 report from the Mackinac Center. The report calls on the state to review its licensing requirements annually and repeal unnecessary ones.
A stream of the event:
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.
So you want to move to Michigan? Here’s the reality
$20M marketing blitz won’t mask Michigan’s problems, but an engaged public can help
The state of Michigan is spending $20 million on a multiyear campaign, called “You Can in Michigan.” Between the new campaign and Gov. Gretchen Whitmer’s “Make It In Michigan” effort, the state is spending about $60 million to tell Michigan’s story beyond its boundaries.
The sales pitch is simple: “Career opportunity, quality of life and affordability.”
It’s a nice thought, but it solves the wrong problem. The reason people leave Michigan, or do not move here, does not owe to bad marketing or to a lack of marketing. It owes to reality.
Between the roads, the electrical grid, and the schools — all poor — quality of life is a struggle in Michigan, not a reason to move here. Yes, it’s pretty. But what else?
Michigan is run as a 150-person club out of Lansing, not as a state of 10 million people. Lawmakers spend $82 billion of the public’s money. A billion of that is on earmarks, pure pork, with only vague details about where the money is going, and at whose behest. Lawmakers frequently don’t have access to current information on bills, and the information available to the public is often months old.
If you want to move to Michigan and be an involved citizen, transparency is a battle you will fight, from local governments to the state government in Lansing.
We have a state government whose tentacles extend into every aspect of your life, either overriding local decision-makers or removing them from the process. Should your private school administer medical marijuana? Should a farmer be able to put wind turbines and solar panels on their property? Under current leadership, the belief is that those decisions should be made in Lansing, not locally.
We have leaders for whom the saying “character is destiny” augurs poorly.
We have government officials who go to great lengths to cancel income tax cuts for the public. They then turn around to offer billions in corporate welfare to Michigan’s biggest companies. Our leaders believe the answer to every problem, even a state-created problem, is more bureaucracy.
We have a governor and attorney general who used the power of the administrative state to crush — or attempt to crush — barbers or restaurant owners who dared to earn a living during a pandemic. Not every business owner made it. Some people lost everything.
Come to Michigan, if Tim Allen’s voice urges you. And you will find a state that needs help.
You will find children left behind by Zoom schooling. You will find workers left behind by the government-driven transition to electric vehicles. You will find good people stunned by the difference between the Michigan they grew up in and the Michigan they now occupy.
They’ll never leave, and they’ll always believe. They’re just not sure what to do next.
Come to Michigan. You can call it the Fresh Coast, even.
But when you do come, ask not what Michigan can do for you. Ask for a bucket, and start bailing water.
James David Dickson is managing editor of Michigan Capitol Confidential. Email him at dickson@mackinac.org.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.
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