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Industry News

05.02.2017

Editorial: Occupational licensing often hurts those it’s supposed to help

The city of Detroit continues to be a textbook example of what not to do. Its poverty rate continues to climb, even as assistance from the state and federal government is increased; its schools are still an educational train wreck, despite the $617 million bailout from Michigan Gov. Rick Snyder in 2016, and its tax base continues to shrink and businesses leave.

Detroit itself isn’t helping matters. A new study shows that overregulation and occupational licensing are denying its citizens the freedom to improve their own lives.

The report is titled “This Isn’t Working: How Michigan’s Licensing Laws Hurt Workers and Consumers,” and it was published by the Mackinac Center for Public Policy.

“The Declaration of Independence lists the “pursuit of happiness” as one of Americans’ ‘unalienable rights,’” the report notes. “For most, this includes the ability to pursue a vocation of their choice. But occupational licensure laws stand in the way of many people trying to exercise this right. For too many people, the right to pursue their dreams has been halted by governments that require them to jump through hoops, pay fees and meet other often arbitrary and inconsistent requirements.”

That’s particularly true in Detroit.

“Detroit licenses about 60 occupations, imposing extra fees and requirements on top of existing Michigan licenses for about half of these occupations,” explains the Washington Examiner. “The other half of the occupations that Detroit licenses are not licensed by the state at all.”

Some licenses are justified; we all want to be sure our physicians and attorneys are competent. But Detroit takes it to a ridiculous level.

“Examples range from window washers, who pay a $72 yearly fee, to pawnbrokers, who pay a $984 yearly fee,” the Examiner reports. “Even sidewalk shovelers, dry cleaners, and furniture movers need licenses to legally work in Detroit. Given the lack of renegade window washers and sidewalk shovelers in Michigan, it is curious why the city chooses to regulate occupations that the rest of the state does not need to.”

There’s a clear consensus that excessive licensing harms the people it’s supposed to protect. Even President Obama’s White House acknowledged this fact.

“There is evidence that licensing requirements raise the price of goods and services, restrict employment opportunities, and make it more difficult for workers to take their skills across State lines,” a July 2015 White House report said. “Too often, policymakers do not carefully weigh these costs and benefits when making decisions about whether or how to regulate a profession through licensing.”

Take plumbing, for example. Detroit drives plumbers away with its regulations.

“Though Michigan already licenses plumbers, Detroit makes these workers go through additional regulatory hurdles to practice their trade in the city,” the Examiner explains. “These include going through the annual license registration process, completing city paperwork every time they complete a job and paying hefty fees based on what they fix.”

The result shouldn’t be surprising; there is a total of 58 licensed plumbers in Detroit, Michigan’s largest city.

Occupational licensing rules kill jobs.


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This article was originally posted on the Tyler Morning Telegraph.
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