Many people often assume that if someone is licensed it automatically means that person is more highly skilled and practicing more safely. Policymakers or state licensing departments, however, only rarely investigate whether this assumption is true. In fact, there are many reasons to suspect that licensing requirements do not per se improve the quality or safety of a service or product.
Here’s just one example: A few years ago, two Detroit funeral homes made national news for improperly storing the bodies of deceased infants and violating a host of other laws. In one funeral home, 63 dead infants were found and the parlor was billing the government for burials that never happened. In the other, “deplorable, unsanitary conditions” and a mummified fetus stored in the ceiling tiles was found.
None of the reports about this tragedy drew attention to the fact that these were properly licensed funeral homes. There was no mention of the overly broad regulations of Michigan funeral homes or that other states do not require this license. Unmentioned too was the research that suggests licensing funeral homes needlessly raises costs for consumers. Nevertheless, the operators of these funeral homes apparently passed all the regulatory hurdles, met the education requirements and paid their fees. But the licensing requirement and the state’s regulatory regime did not prevent or even detect these blatant abuses.
This is just one example, of course, but regulatory rules are intended to protect the public. If they fail on that account, what else justifies their use? Too often, occupational licensing rules amount to mere obstacles that make it more difficult for people to find work. They are not often designed and managed to focus specifically on improving public health and safety.
If licensing laws were truly dedicated to protecting the public and consumers, we would expect to find similar rules for similar occupations. Laws among the 50 states would be similar. Instead, we find a hodgepodge of varying licensing rules and regulations that exist across industries, occupations and state lines.
Michigan should reform its licensing regime and remove needless barriers to work for residents. The state should only mandate licenses when there is a demonstrable and direct connection to protecting consumers. State policymakers have already passed several key reforms that will make it easier for people to find work, but more must be done. They should continue these efforts to focus regulatory rules on protecting public health, regularly review the laws, and avoid adopting new licenses that needlessly raise costs for consumers and discourage Michigan residents eager for work.