- November 7, 2013
From teeth-whiteners in Alabama to hairbaiders in Texas, local and state governments plague entrepreneurs with occupational licensing laws, wasting their time and money to earn unnecessary credentials. Many licensing requirements are just plain absurd. In Michigan, for instance, it takes someone three years of education and experience to become a security guard, but only twenty-six days to qualify for certification as an Emergency Medical Technician.
Michigan’s governor is taking a stand against burdensome and ill-conceived licensing laws. By executive order, Governor Rick Snyder established the Office of Regulatory Reinvention (ORR) shortly after taking office in 2011. Its purpose is to encourage “a regulatory environment and regulatory processes that are fair, efficient, transparent, and conducive to business growth and job creation…by reducing obsolete, unnecessary, and burdensome rules that are limiting economic growth.”
So far, occupations like residential elevator installers, polygraph operators, and landscape architects have seen bills hit the floor to abolish their licensing requirements. But some of these bills, like House Bill 4688, which deregulates the nutritionist field, have faced opposition from already established specialists. Tonia Reinhard, the director of Wayne State University’s dietetics program commented that “there are serious ramifications for patients who don’t receive competent nutrition care citizens working with nutritionists not certified by the government.
Yet Michigan already has its own organization focused on training and registering nutritionists, so having the government fulfill the same exact purpose is redundant and a wasteful, unnecessary use of the state’s budget. Fortunately, on October 29th, the bill passed through committee and is on its way to the Michigan House floor.
Perhaps the existing specialists have an ulterior motive. More licensing of those hoping to enter an occupational field leads to less competition, and less competition means more clientele for the already established practitioners. These specialists are using bureaucratic red tape to tie up their competition, and cheating consumers out of a healthy marketplace.
Licensing schemes hurt the economy. In 2007, a study by the Reason Foundation found that occupational licensing reduces the rate of job growth by an average of 20%. The Institute for Justice also examined occupational licensing in all 50 states and Washington, D.C, in its report, “License to Work: A National Study of Burdens from Occupational Licensing.” It found that out of 102 lower-to-moderate income occupations, only 15 of these occupations require licenses in 40 states or more and, on average, any of these 102 occupations are licensed in just 22 states. Clearly, the sky hasn’t fallen where licensing doesn’t exist, providing strong evidence that licensing does not improve public health or safety.
According to the Detroit Free Press, “ending many of the [licensing] requirements would save the state about $1 million a year.” That’s not a bad boost to the state’s already strapped budget. But as the deputy director of the state Licensing and Regulatory Affairs Department, Kevin Elsenheimer, notes, “The financial issue is not the driving force here. The way that we’ve moved forward is really focused on removing the barriers to occupations and opening the economy as much as possible.”
So congratulations, Michigan, for leading the charge against harmful and unfounded licensing schemes. Cutting the fat out of its government budget must be making its nutritionists proud.
-- Phil Applebaum
Phil Applebaum is a Maffucci Fellow at the Institute for Justice