By throwing nearly a million workers in Michigan out of work, the economic damage caused by COVID-19 highlights the need to remove regulatory barriers to employment.
Many of those who will be looking to return to work will be blocked by occupational licensing laws. The newly proposed SB 40 would help prevent new barriers from being added and will remove some of them in the future.
Occupational licensing laws can be thought of as a permission slip by government needed to work in a field. They require education, exams, and fees to try to protect consumers. However, these barriers to entry are often onerous. And these hurdles make it difficult to enter a field, restricting the number of professionals. Normally, this results in higher prices for consumers.
But we’re not in normal times. COVID-19 and the lockdowns have thrown many out of work, who are and will continue to be looking to return to work and restart small businesses. Occupational licensing requirements pose a serious burden for those currently out of work looking to find work in licensed professions. For someone who has been out of work since February, going through the process of taking more time off for education, studying for exams, and paying fees may be too much, forcing them to look elsewhere or remain unemployed.
As we recover from COVID-19, the effects on aspiring professionals and consumers are harmful for all Michigan residents. But a new bill proposed by the Michigan legislature aims to mitigate this, making it easier to return to work.
When proposing a new licensing related law, the bill would force the legislature to consider alternatives, instead of assuming that licensing would be the best option. The goal is to use the least restrictive means of regulation. Supporters must articulate the problem and use data to show it’s widespread. This way, the law will be better designed to solve the actual problems facing Michigan residents. The hope is that it will result in fewer, better regulations.
SB 40 also requires that the commission compare proposed licensing laws to other states. Too often, state legislatures ignore how other states license professions. This causes a wide discrepancy in who gets licensed and the requirements that professions face. This variation between states makes it more difficult to move to a new state for work.
It also requires that the commission reviews one fifth of licensed professions each year. The review will focus on the issue licensing would solve, trying to find the least restrictive means to ensure that consumers receive the best service possible.
For instance, if the main concern is health and safety from potential dangers in the premises, instead of requiring licensing we could use health and safety inspections. This would remove unnecessary barriers to entry for aspiring professionals, while still ensuring consumer safety.
What does this proposed law really mean? It makes sure any new barrier to entry into a profession is truly necessary. It also helps lawmakers design laws better suited to actual problems facing Michigan residents. Finally, it reviews the old laws already on the books to make sure they are serving a purpose and do so in the best way.
Now more than ever, we need to remove roadblocks that keep people from returning to work. SB 40 will ensure that we do not add any more to prevent those out of work from COVID-19 to find a new profession.
*Original Publication was on 9/2/2020 in Michigan’s The Morning Sun
Conor Norris is a research analyst and Edward Timmons is director of the Knee Center for the Study of Occupational Regulation. Timmons is also professor of economics at Saint Francis University in Loretto, Pennsylvania.