Based on the findings from economic research and the arbitrariness of licensing laws, Michigan should take an entirely different approach to occupational licensure. It should thoroughly review all of its current licensing requirements and establish new standards for creating an occupational license. For all current licensing requirements, the state should review them based on three criteria: demonstrable impact on public health and safety, how they compare to national norms and the state costs associated with managing these licensing requirements. If a license cannot be shown to protect the public from harm, is regulated above national norms, or is subsidized by the state, it should be repealed or rolled back.
A license should be considered for elimination if it cannot be demonstrated with hard evidence that it improves public health and safety. If Michigan requires a license for an occupation that most other states do not, the license should be considered for elimination. Likewise, if the requirements for obtaining a license differ significantly from national norms, those requirements should be rolled back to more closely match most states. Finally, all licenses should pay for themselves. The fees for some occupations should not be subsidizing the costs of licensing other occupations. If the revenue generated from a license is not enough to cover the cost of enforcing it, it should be simplified or eliminated.
The Office of Regulatory Reinvention makes a similar suggestion concerning revenue from licensing requirements:
The occupational fee structure for all licensees or registrants should be financially self‐supporting so that fees cover the cost of regulatory oversight. ... [S]tatutory language should be amended to allow for licensing and application fees to cover the actual administrative costs of regulating the occupation.
If the risk of public harm is great enough to warrant government regulation of an occupation, the resources should be available to properly administer the regulation without dipping into other sources.
Lawmakers should also create new standards for creating licensing requirements. First and foremost, any new license should meet the three criteria outlined above: they should improve public health and safety, be similar to national norms and pay for themselves. Further, any new license should include an automatic, periodic review — every five years, for instance. This would help Michigan’s licensing regime stay relevant to current economic trends.
Using this test, it is clear that many of Michigan’s current licensing laws would be repealed — some outright, while others would be replaced with lower levels of regulation. For example, since fewer than 10 states license occupations subject to Michigan’s low-level maintenance and alteration licenses, those would be repealed. Moreover, the test will help Michigan avoid proposals that other state legislatures have dealt with in recent years, including the proposed licensing of music therapists, for example.