There are three main economic harms that occur as a result of occupational licensure laws: a reduction in job opportunities, higher consumer prices and a misallocation of resources.
There have been a few attempts to estimate these costs nationally. Morris Kleiner and Alan Krueger estimated that the approximately 38 million licensed workers in the United States reduce employment by about 2.8 million jobs and impose $203 billion in higher prices on consumers.
Kleiner also made an estimate for Michigan. Working with Evgeny Vorotnikov, Kleiner estimates that licensing laws could increase the average wage of a licensee in Michigan by as much as 30 percent. In 2013, Michigan had 830,639 licensed workers who made average earnings of $50,054. These licenses cost the state an estimated 125,480 jobs. If this estimated 30 percent wage premium for licensees was entirely the result of the monopoly benefit of locking out competition, as opposed to productivity gains, Kleiner and Vorotnikov’s work suggests that the annual cost to consumers could be as high as $10.4 billion annually, or $2,700 per household in Michigan.