NEBRASKA PASSES UNIVERSAL JOB LICENSING LAW

Mackinac Center's white paper is hot off the presses. Clipped for length, but worth reading in full.

https://www.mackinac.org/s2025-01

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 Michigan licenses about 180 occupations and imposes a variety of business licensing requirements.[4] These laws reduce market competition, which increases prices for consumers. Licensing also costs the state jobs because fewer people are qualified to work legally. The state spends more than $500 million annually to administer its licensing regime.

Licensing laws persist in part because they have built-in support. Educational institutions and training organizations, for instance, benefit financially from licensing requirements because people are required to enroll in their programs. Workers already licensed typically oppose lifting these requirements, viewing it as unfair if others are exempted from the hurdles they had to overcome. Licensed workers also benefit from the higher prices they can charge as a result of the suppressed competition.

Licensing laws are often justified on the grounds that they protect public health and safety by setting minimum standards for people doing these jobs. If these benefits outweighed the cost to consumers and the state’s economy, licensing laws would be worth it. Research on these laws consistently shows, however, that licensing laws generally do not improve public health or safety.[5]

Licensing laws are also arbitrarily established.[6] Similar occupations that present similar risks to public health often have different licensing requirements, with some occupations remaining unlicensed. The stringency of different licenses appears inconsistent, too. Some relatively safe jobs might require thousands of hours of training and years of education while other occupations that are seemingly riskier to public health can require significantly less training and education. This hodgepodge of licensing rules is inconsistently enforced.[7] Many licensing laws amount to little more than artificial and expensive barriers for people who want to work in Michigan.[8]

Some states regularly review and repeal occupational licensing laws that do not directly impact public health and safety. The Growing Michigan Together Council, established by Gov. Whitmer in 2023 via executive order, recommended Michigan follow these states’ lead. The council’s report asked that lawmakers “conduct a full review of professional licensing requirements to identify which can be maintained, improved, updated or eliminated.”[9]

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A Michigan case study

Even though Michigan has reciprocal licensing compacts with many other states, the regulations on the books can still be cumbersome and confusing, creating obstacles for people trying to move to Michigan to work.

Consider the case of Anne Davis. Anne is a psychotherapist with degrees from Central Michigan University and Colorado Christian University. She grew up in Michigan but moved to Colorado and worked for more than 20 years as a counselor for the homeless, mentally ill and others in a private practice.

She and her husband, also a counselor, moved back home to Michigan to be near family and to better care for their adult son with disabilities. Her husband’s license — a professional counselor license — took just two months to transfer from Colorado. Anne’s license, however, was different. The psychotherapist license she used to practice counseling in Colorado did not easily transfer to Michigan even though she had completed all the training and experience as a counselor.[35]

Anne spent 13 months trying to convince the state department that her master’s degree in counseling was adequate to meet the requirements of getting a Michigan license. Eventually, the state agreed and approved her license without requiring Anne to do anything extra. But she lost more than a year of potential income while she waited for the state to issue her license.

If Michigan had an automatic universal licensing reciprocity law, Anne would have been able to start work almost immediately. Instead, Michigan's rules resulted in the state having one fewer counselor during those 13 months, for no good reason. It’s hard to see how Michigan’s process accomplished anything other than unnecessarily delaying someone from earning an income and providing Michiganders with a needed service.

Conclusion

Michigan should join the bipartisan collection of states that have universal licensing reciprocity laws. Considering the state’s population trends, policymakers should be keen to make Michigan one of the easiest places in the country to move to and start working. The state should automatically grant a license to someone who was licensed in another state for a similar occupation. Michigan should recognize the work experience of those from other states and allow that to count toward automatically qualifying for a license here.

Michigan lawmakers and regulators should also be regularly reviewing the licenses on the books and reducing or removing the licensing requirements that do not clearly demonstrate that they improve public health and safety. This would make it easier for people in Michigan to work in hundreds of occupations and make it easier for people employed in other states to move here.[36]

Research shows that universal licensing reciprocity laws increase interstate migration — more people move to states with those laws than otherwise would. The law would increase economic growth and help alleviate worker shortages that plague certain occupations. The reduction in red tape would also lower the unemployment rate and reduce prices for consumers. These laws would expand access to services that would benefit all Michiganders, but especially those in sparsely populated or impoverished areas.

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