Proliferation of occupational licenses a burden

Mark V. Holden

What should Michigan lawmakers’ New Year’s resolutions be? I have a suggestion: Break down barriers to opportunity for the least fortunate.

Elected officials in Detroit City Hall and the state government in Lansing should start by rolling back burdensome occupational licensing regulations, which stand in the way of low-income job-seekers and budding entrepreneurs.

Most people have never heard of occupational licenses, yet they are a growing hindrance to economic mobility in Michigan and across the country. To work in many professions, you must seek permission from state or local government in the form of a license. You often have to pay a significant fee or spend months — and sometimes years — in training before beginning your career.

That wasn’t a huge deal when occupational licenses only applied to lawyers, doctors, and airline pilots. But other businesses quickly found they could handicap competitors and innovative start-ups if they licensed their own industries.

In July, the White House released a report detailing how occupational licensing laws have proliferated: “(M)ore than one-quarter of U.S. workers now require a license to do their jobs.” At the state level, “the share of workers licensed ... has risen five-fold since the 1950s.”

Today, occupational licenses apply to hundreds of different entry-level and mid-level professions. Michigan is no exception.

According to the Institute for Justice, no fewer than 42 of the 100-most common low- and moderate-income jobs in the state require licenses. Barber. Fisher. Makeup artist. On the whole, the average Michigan license costs $198 and requires 256 days in education or training.

And those are just some of the state occupational licenses. There are even more passed by cities like Detroit, which only restrict further an individual’s attempt to earn a living. These laws vary — and conflict — from city to city and state to state, making it that much harder for Michiganians to find work and make a living.

We’re starting to learn how much harm occupational licenses have caused. The White House put it best, saying licensing can “raise the price of goods and services” and “restrict employment opportunities” for those who need them most.

These licenses also harm those who have run afoul of the justice system. Once nonviolent ex-offenders pay their debt to society, they should be encouraged to rejoin it by finding a job or starting a business. Sadly, their government bars them from pursuing a career that requires a license.

Knocking down these barriers is both morally praiseworthy and economically beneficial. Lawmakers in Detroit and the state government in Lansing should — at the very least — prevent the creation of new occupational licenses. Better yet, they should roll back those that already exist. If lawmakers do this, they’ll help countless low- and middle-income Michiganians improve their lives and climb the ladder of opportunity.

Surely that’s a New Year’s resolution worth making — and keeping.

Mark V. Holden is general counsel and senior vice president at Koch Industries.