Detroit is living up to its motto and rising from the ashes by embracing business, but it would see greater job growth and faster recovery if it removed the arbitrary occupational licensing laws that are preventing it from reaching its full potential.
Mackinac Center for Public Policy’s Jarrett Skorup, a policy analyst, and Jacob Weaver, a research intern, wrote in an op-ed published by The Wall Street Journal that Detroit puts a heavy burden on people looking to find work and provide a service to the city. For at least 60 occupations, workers must pay fees, take classes, pass exams, and/or undergo additional training prior to being allowed to work.
Research shows that these barriers restrict job growth and provide no measurable health or safety benefits to the public. Morris Kleiner of the University of Minnesota concludes in a 2015 Brookings Institution paper that licensing requirements cost consumers more than $200 billion and result in up to 2.85 million fewer jobs. As the economic damage becomes more clear, Mr. Kleiner has found allies in groups as ideologically distinct as the Cato Institute and President Obama’s Council of Economic Advisers.
Such unfair licensing requirements also disproportionally hurt low-income workers.
A bipartisan group of Michigan lawmakers have reformed licensing requirements at the state level and Detroit leaders should follow suit to ensure the city fully rebounds from bankruptcy.
Read the full op-ed in The Wall Street Journal.
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