Editor’s Note: This commentary by Jarret Skorup of the Mackinac Center for Public Policy should make for interesting reading here in California. In particular, Skorup references Michigan’s pending “House Bill 4641,” that will prohibit government agencies “from imposing occupational licensure without proof of valid public health and safety concerns, and when licensing is beneficial, requires the least restrictive method of obtaining it.” Imagine if something like this were to be passed in California, which has the most extensive collection of licensure requirements in the U.S. These are constructive solutions to growing the economy and putting people to work that rarely get serious attention in California’s legislature. After all, since when did deregulation ever add a job position to the taxpayer supported unionized state and local government workforce?
The Wall Street Journal has a good “Weekend Interview” piece with Bob Woodson, head of the Center for Neighborhood Enterprise. The group works in low-income areas to foster entrepreneurship, value creation and faith-based enterprises.
The whole interview is very interesting, but one part in particular relating to government mandates for occupational licensing stuck out:
Mr. Woodson says that many poor communities don’t need another government program so much as relief from current policies. “For instance, a lot of people coming out of prison have a hard time obtaining occupational licenses,” he says. Aspiring barbers, cabdrivers, tree-trimmers, locksmiths and the like, he notes, can face burdensome licensing requirements. Proponents of these rules like to cite public-safety concerns, but the reality is that licensure requirements exist mainly to shut out competition. In many black communities, that translates into fewer jobs and less access to quality goods and services.
Often, the most important thing the government can do is simply not hinder people. Occupational licensing – mandating fees, classes, training and more in order for someone to hold a job – mostly serves to protect some people and businesses from competition with no proven safety benefits. In Michigan, the state heaps particularly burdensome mandates onto barbers, security guards, trainers, cosmetologists, painters and an assortment of low-level contractors.
To enhance competition and help consumers, this needs to end. House Bill 4641 would be the best antidote, because it gets to the root of the problem, prohibiting government units “from imposing occupational licensure without proof of valid public health and safety concerns, and when licensing is beneficial, requires the least restrictive method of obtaining it. It also allows workers to sue the state if a regulation excessively burdens their right to earn a living; if a court agreed, the mandate would be thrown out.”
If politicians want to truly help the little guy, more needs to be done to eliminate needless regulations. As Arthur Brooks, president of the American Enterprise Institute, has put it: “As a pro-poor rule of thumb, I suggest this: If you want to start a landscaping business, all you should need is a lawn mower, not an accountant and a lawyer to help you hack through all the red tape before setting up shop.”
Jarrett Skorup is a research associate at the Mackinac Center for Public Policy.