Speaking of ways to increase healthcare costs.
Monday quiz: can you identify a special interest that gains with more licensing?
About 160 occupations in Michigan now require a license
Getting licensed to represent a client in a Michigan court requires fewer classroom hours than you would need if you just wanted to cut that client’s hair.
Aspiring lawyers in this state need to complete a mere 1,200 hours of classroom education, while barbers must put in a staggering 1,800 hours of coursework.
It's a head-scratching paradox that begs the question: Does a sharp legal argument require less sharpening than a quality haircut?
Occupational licensing creates a hindrance to economic growth, and it's not just barbers who are affected. Many blue collar workers find themselves caught in a system where they are required to invest a substantial amount of time and money, often outweighing the wages they anticipate earning in their chosen profession. This burden can make it impossible to thrive.
Licensing imposes a range of requirements on individuals entering licensed professions, including additional training, education, fees, exams and paperwork. Stringent requirements lead to reduced employment opportunities in licensed occupations, stifling competition and increased the price of goods and services for consumers.
While licensing has a role in the society — nobody wants an unlicensed lawyer or doctor — Michigan has extended the scope of licensing requirements beyond what can be justified by public safety, health or security.
Approximately 160 occupations in Michigan now require a license. But for many of these professions, the risk to the public of an unlicensed worker is minimal. Do individuals really need go through 1,500 hours in college and incur associated fees up to $230 to pursue a career in cosmetology? Such regulation can create roadblocks to entrepreneurship and hinder economic growth.
The rate of at which Michigan adds occupational licensing requirements has increased in the past few decades. In 1950, only 5% of jobs required workers to obtain occupational licensing. Today, that figure is closer to 25%.
By streamlining the licensing process and evaluating the necessity of licensing in various professions, Michigan could promote economic growth, increase job opportunities, and empower entrepreneurs to thrive without excessive barriers to entry.
Will Young is a Michigan Capitol Confidential intern.
Licensing is so ubiquitous, we take it for granted. Given its negative impact, it deserves much closer scrutiny.
Mackinac Center hosted an educational event on licensing earlier this month, and reports on it here.
As an attendee, I found it very informative, and recommend watching.
Nearly 1 million Michiganders are subject to occupational licensing laws
Mackinac Center forum considers occupational licensing and its discontents
Labor shortages in various parts of the economy have led to increased interest in reforming occupational licensing, as the National Conference of State Legislatures observed in March 2022. Michigan is no stranger to the problems of occupational licensing, and experts from the Mackinac Center and elsewhere laid out some of them in an Oct. 6 “Issues and Ideas” forum at The Louie Building in Lansing.State-imposed regulatory barriers, including education and training requirements, contribute to a worker shortage and increased costs for consumers, said participants in the event, “Occupational Hazard: State Licensing Laws in Michigan,” which is now available on video. Close to one million Michigan residents are subject to these requirements, with an untold number excluded from their chosen line of work.
“When education requirements are too high for the job or unnecessarily restrictive, they end up preventing people from getting into that profession,” said Conor Norris, who studies the labor market at West Virginia University.
Norris is part of the Knee Center for the Study of Occupational Regulation, at the university’s John Chambers School of Business and Economics.
Educational requirements tied to occupational licensing can reduce the supply of workers, Norris said. He put the figure between 17% and 27% for occupations with state-imposed requirements.
Regulatory and legal barriers to work cost America two million jobs each year, Norris said. The barriers include education requirements, training requirements, and moral-character requirements in licensing schemes. The country suffers $7 billion in lost output and $185 billion in misallocated resources, he said.
Businesses that face rising consumer demand will have a hard time satisfying customers when demand increases, experts at the event said. Licensing slows the entry of new workers into a field of work, increasing costs to the consumer.
Some licensing requirements are enacted even when there is little history of consumer fraud, abuse, or mistreatment of workers, said Jaimie Cavanaugh, an attorney with the Institute for Justice.
Cavanaugh cited an industry group called the U.S. Lactation Consultant Association, which lobbied the Georgia Legislature to implement stringent new requirements for lactation consultants. There were no widespread reports of trouble caused by unlicensed consultants, but lawmakers responded in 2018 with a new law anyway.
The special interest group, Cavanaugh told NBC News, pushed the state to require the 800 specialists in Georgia to complete “two years of college-level courses and at least 300 hours of clinical experience.”
The group cited its desire to increase members’ reimbursements from insurance companies as a reason for its campaign. The Institute for Justice filed a lawsuit in 2018 against the state on behalf of a lactation consultant, Mary Jackson, and her nonprofit, Reaching Our Sisters Everywhere. Jackson and IJ won at the state’s highest court on May 31, 2023.
The court issued a unanimous opinion, saying that under the Georgia Constitution, people have the right “to pursue a lawful occupation of their choosing free from unreasonable government interference.”
Michiganders seeking to work in more than 180 occupations face licensing requirements, according to a September 2023 report from the Mackinac Center. The report calls on the state to review its licensing requirements annually and repeal unnecessary ones.
A stream of the event:
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.
Maybe the nursing shortage isn't critical enough, at least in Connecticut.
If nurses pass school finals and the national exam, and their employers and patients are satisfied with their work, should the state backtrack them over scholastic questions?
Students of Shuttered Nursing School Sue State Officials for Overreach
— Connecticut requested license applicants of Stone Academy program complete a "refresher course"
Former students of a now-shuttered for-profit nursing school in Connecticut have filed a federal lawsuit alleging that two state agencies invalidated their course credits, withheld licenses, and damaged their professional reputations.
The nine former students of Stone Academy -- which closed suddenly earlier this year and has been subject to state investigations ever since -- claim that Connecticut's Office of Higher Education (OHE) and Department of Public Health (DPH) violated their rights by invalidating their academic credits. The students' lawsuit also charged that the agencies "forever tarnished their professional reputations and interfered with their pursuit of career advancement in the nursing field."
The school offered practical nursing programs at three campuses in the state. Five months after the school's closure in February, state agencies published an audit of the former students' records. OHE's "unauthorized" audit, according to the lawsuit, deemed 76% of the plaintiffs' more than 100,000 credit hours to be invalid.
"What the state did here was -- rather than be helpful to these students -- they took a bad situation and made it exponentially worse," said David Slossberg, JD, a lawyer in Milford, Connecticut, who is representing the former students.
Credits were deemed invalid due to missing information on clinical attendance sheets, such as omitting instructor names, and for exceeding the student-to-instructor ratio, among other reasons. Museum visits and writing assignments were also "likely" granted in place of clinical hours in some instances, noted the final report.
According to Slossberg, OHE and DPH in January discussed an audit with Stone Academy to help it "get its act together," but then in February the school decided to close instead.
"That should have been the end of it," but instead the agencies "went rogue," did the audit themselves, and have "forever stigmatized ... the professional reputations of these students who worked hard and earned these credits," he said, adding that the students were not afforded the right of appeal.
In addition to its audit of "active" students, the agency also targeted graduates, Slossberg said.
A DPH document from April noted that a state review of the school's practical nurse program "revealed several educational concerns that call into question whether recent graduates from Stone Academy received the learning and training experiences required to practice successfully as a licensed practical nurse (LPN)."
To that end, the document announced a "free training refresher course" for all of the school's LPN license applicants. It states that the DPH is required by law to issue an LPN license to applicants who pass the National Council Licensure Examination (NCLEX). However, the document notes that "given the issues with the Stone Academy program," students are requested to sign a "stipulated agreement" stating that they essentially won't use their license before completing the refresher course.
Connecticut "didn't have the authority to do any of this," said Slossberg, who claimed that the students were asked to sign the documents "under the threat of investigation."
"The NCLEX ... is the nationally accepted standard, adopted by all the states, for testing those nursing students to assure that they can practice competently and safely as entry-level practical nurses," he said.
Approximately 200 students who received their degree from Stone Academy were planning to take the NCLEX or had already taken it, according to Slossberg, and of those, "the state has indicated that it has opened 50 investigations for students who would not sign the stipulation."
According to the lawsuit, students who did sign the agreement and took the NCLEX in March were forced to wait months for employment because the only available "refresher course" was in October.
In a prior lawsuit filed in May, former students represented by Slossberg sued Stone Academy's parent company Career Training Specialists and the school's owners to hold them accountable for "predatory and unconscionable conduct."
Despite knowing that it "could not adequately provide accredited courses and clinical experiences to its students. Stone Academy continued enrolling students before abruptly closing its doors," the lawsuit stated.
In early December, the students were granted $5 million in a prejudgment trial remedy, according to NBC Connecticut.
Asked whether it was unusual to be suing both state officials and the owners of the academy, Slossberg told MedPage Today, "We're just trying to go after the folks who were in positions of trust, who dropped the ball, and that's what this second suit is about."
According to Slossberg, approximately 1,200 students have been impacted by the audit and stipulated agreement.
The OHE has a fund for reimbursing students of about $263,000, which is expected to be distributed in 2024, Slossberg said. "But it doesn't nearly address the harm that was done to the students."
Noele Kidney, a public information officer for the OHE, told MedPage Today that the agency denies the allegations and will "defend the agency's actions in court."
A spokesperson for the DPH said the agency has no comment at this time.
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