Michigan Requires More Than 200 Occupational Licenses

And the fee to be a plumber is twice as much as a doctor

If you want to work in Michigan, you need to get a license — at least to work in one of 215 professions the state of Michigan licenses. These licenses, which typically require education, training, exams, state fees, or all four, apply to work ranging from acupuncturist through wholesale potato dealer. Even taxidermists and funeral directors are subject to state requirements.

But in 2011, Gov. Rick Snyder promised change.

Upon entering office, he issued an executive order to create the Office of Regulatory Reinvention. The governor told this new office to “simplify Michigan's regulatory environment by reducing obsolete, unnecessary, and burdensome rules that are limiting economic growth.”

While there has been some progress, five years later, Michigan occupational licensing laws remain a much-overlooked barrier to personal prosperity.

Since 2011, the office has repealed or rescinded 3,958 rules and regulations. But only 284 of these touched on occupational licensing, and only 38 of Michigan’s 202 occupational licenses were affected at all. Mostly, these rule changes were minor tweaks rather than repeals of regulations.

A study by Morris Kleiner, published by the Brookings Institution, cited evidence that “standard economic models imply that the restrictions from occupational licensing can result in up to 2.85 million fewer jobs nationwide, with an annual cost to consumers of $203 billion.”

The Obama administration also acknowledged the need for reducing the footprint of occupational licenses across the country. In its report, "Occupational Licenses: A Framework for Policymakers," the administration detailed how occupational licenses drive up costs, reduce employment and wages, and injure low-income workers. Two occupations mentioned in the study are nurse practitioners and dental hygienists. It concludes: "More restrictive state licensing of nurse practitioners raises the price of a well-child medical exam by 3 to 16 percent, and imposing greater licensing requirements on dental hygienists and assistants increases the average price of a dental visit by 7 to 11 percent.”

The Mackinac Center recently reviewed state occupational licensing laws and found that the average license fee costs a worker $133, with the master plumber’s license costing the most, at $375. By comparison, the state fee for a medical doctor is $150. Contractors, who typically create jobs by starting businesses and hiring employees, bear one of the largest burdens, with many paying up to $300.

Workers are also required to take one or more tests, and the average test fee is another $183, raising the average license price to $312. (This number does not include the cost of training or fulfilling education requirements). There are dozens of professions for which the cost is over $500, with more than a third of those costing over $1,000. At $3,460, the chiropractic license is the most expensive.

Occupational licensure is not a partisan issue. The Obama administration said it well in its white paper: "The practice of licensing can impose substantial costs on job seekers, consumers, and the economy more generally." Michigan policymakers looking for a cost-free way to remove obstacles to state economic growth would do well to take another look at occupational licensure.

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.