Occupational licensure — in which the government mandates training, tests and fees before someone can legally work — has a larger effect on the Michigan economy than any other labor policy. Licensing laws in Michigan increase prices for consumers by up to 30% and cost the state an estimated 125,000 jobs. All told, Michiganders pay $10.4 billion annually in higher prices, or about $2,700 per household, because of excessive licensing rules which prevent market competition. If that weren’t bad enough, it costs the state $150 million every year just to manage the bureaucracy needed to keep track of these licensing requirements.
According to experts across the spectrum — in the Mackinac Center; the Obama, Trump and Biden administrations; the Brookings Institution the Mercatus Center; and others — these mandates are often arbitrary, do little to enhance consumer safety, and have been created by special interest groups. Because most government licensing schemes restrict people with a criminal background from working legally, research also suggests licensing laws contribute to higher crime rates, as ex-offenders see higher unemployment and fewer work options.