For decades, every state has been consistently subjecting more and more occupations to strict licensing requirements. While government regulation of some professions makes sense, this has gone way overboard — killing jobs and economic opportunity.
But recent action in Michigan showed blowback to the bureaucracy, and a lesson in how to balance regulation and the freedom to work.
Three decades ago, Michigan, like most states, added licensed professional counselors to the public health code. But the way the state’s licensing agency wrote the administrative rules gave counselors a lot of freedom to practice. Today, there are 10,000 licensed professional counselors working in the state.
Michigan’s licensing agency now says, however, it interpreted the law incorrectly and the state has thousands of counselors practicing illegally. It began to rewrite the rules, which would have put many counselors out of business or forced them to meet new expensive and time-consuming requirements.
The backlash was severe. Protests occurred around the state and legislators quickly introduced bills to block the agency’s move. The issue pitted different professional associations against each other. The Michigan Psychological Association, which represents people less likely to be affected by the changes, testified in opposition, saying more training is needed for those who treat people with serious disorders. The Michigan Counselors Association, whose members would be locked out without a legislative fix, was supportive, testifying that agency’s rule change would prevent them from treating depression, anxiety, trauma and other conditions.
In the end, lawmakers passed the bill unanimously. Counselors can continue to practice as they have, without the commission’s aggressive interpretation of state law.
This issue shows how government regulation is not black and white. Most people don’t believe just anyone should diagnose and treat bipolar disorder or schizophrenia. But most people also don’t think you need a doctorate and years of specialized training to help those recovering from sexual assault or treat kids with autism. With too few rules, bad actors can proliferate. But with too many rules, there won’t be enough people can work to handle problems that need to be addressed.
Occupational licensing laws are a hammer that sees every job as a nail. They are the most severe regulation that can be applied, typically mandating degrees, hours of training, tests, continuing education and fees to cover the expenses of a bureaucracy administering these rules. But it doesn’t have to be that way.
As with Michigan’s counselors, states should be constantly and consistently analyzing whether the licensing rules they have on the books make sense. And they should explore other ways to mitigate potential harms.
For example, deck builders and roofers are licensed in many states. It doesn’t make sense to require a bachelor’s degree (no states do), marketing classes (some states do) or continuing education (many states do). It may make sense to require inspections along the way, or for workers to have insurance for their projects in case something goes wrong.
Cosmetologists are licensed nearly everywhere. It’s obscene that most states mandate they have more hours of training than bricklayers or concrete workers. Or that many states prevent hair braiders from practicing unless they have years of schooling. But it may make sense to ensure that equipment is properly cleaned or chemicals are used properly.
So how do we ensure that occupational regulation makes sense? Well, the current system isn’t working. Associations and their lobbyists — called “bottleneckers” by those pushing for reform — spend their time and money arguing for protection for their members and more regulation on their competitors. That’s how the United States has gone from 5 percent of workers licensed to nearly 30 percent.
We need a new model, such as an independent board, commission or court that analyzes state rules and streamlines (or eliminates) regulations that can’t be shown to protect the public health and safety. Several states — Nebraska, Arizona, Tennessee — have set up commissions to do this work; Michigan called for a report that led to some deregulation.
These efforts have beat back some unnecessary regulations, but much more needs to be done. Right now, the incentives in the political system are to expand the mandates and costs for people to work, regardless of the consequences.
Jarrett Skorup is director of marketing and communications at the Mackinac Center for Public Policy, a research and educational institute in Midland, Mich., where Taylor Piotrowski is the project and external affairs coordinator.