MIDLAND, Mich. — A study released today by the Mackinac Center for Public Policy shows state lawmakers and agencies how to analyze occupational licensing laws to help ensure they protect public safety without overburdening workers and consumers. The study includes a model for reviewing occupational regulation and applies this to four example licensed occupations: painters, roofers, school librarians and barbers.
There are around 1,000 occupations across the country subject to occupational licensing laws, a massive increase over the past few decades. But research from numerous scholars calls into question their effectiveness, finding that many lock people out of the workforce while providing no measurable protection for consumers. Urged on by both the Obama and Trump administrations, many states are seeking to review the licensing regulations they have on the books. These typically require people to pay fees, complete educational mandates and pass an exam before they are granted a license to work legally.
But how, exactly, should state officials analyze these laws? The new report attempts to answer that question by describing different factors that policymakers should consider, with the end goal of balancing the need for consumer protection, job creation and fair competition. Following this process will help identify the most cost effective and public welfare enhancing regulatory tool needed for any occupation.
The report is especially timely here in Michigan, because a bipartisan bill package has been introduced in both the House and the Senate that would establish a review process of occupational licensing requirements. If enacted into law, this new report could be of immediate assistance to lawmakers.
The report is co-authored by Dr. Thomas Hemphill of the University of Michigan-Flint and Jarrett Skorup, director of marketing and communications at the Mackinac Center.
“Occupational licenses are required of 20 to 30% of workers and everyone pays higher prices because of it,” said Jarrett Skorup, co-author of the study. “If these regulations can be shown to protect consumers, they may be worth the cost. But far too often, licensing requirements are arbitrary and counterproductive. This report attempts to show regulators how to separate the wheat from the chaff of what is necessary and what is not.”
The Mackinac Center for Public Policy is a nonprofit research and educational institute that advances the principles of free markets and limited government. Through our research and education programs, we challenge government overreach and advocate for a free-market approach to public policy that frees people to realize their potential and dreams.
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