Sunday, August 28, 2016

Licensing requirements cost consumers more than $200 billion and result in up to 2.85 million fewer jobs

How Detroit Can Liberate Its ‘Extreme Rebels’: Boost job growth in the Motor City by rolling back occupational licensing laws.. By Jarrett Skorup and Jacob Weaver in the WSJ. Mr. Skorup is a policy analyst at the Mackinac Center for Public Policy in Midland, Mich., where Mr. Weaver is a research intern. Excerpts:
"Mayor Mike Duggan, a Democrat, has signaled that he wants to encourage business and entrepreneurship."

"Detroit currently requires licenses for at least 60 occupations. Since the state of Michigan already obligates workers to earn licenses for about half of these jobs, Motor City workers licensed by the state have to pay additional fees and meet another set of requirements to work.

Consider the contractor who installs and repairs elevators. Getting a state license to work in that field requires passing a state-imposed test and paying a $200 fee. Anyone who wants to practice that trade in Detroit must pay the city an extra $142 in fees and pass another oral and written test, which cost an additional $176. This means that it costs $318 more to be an elevator contractor in Detroit than anywhere else in Michigan."

"Why would a contractor who could find a job elsewhere deal with the trouble of doing business in Detroit? And whom do these redundant requirements benefit?"

"Detroit also licenses many professions that the state and the rest of the municipalities in Michigan do not. Furniture movers and auctioneers all need licenses, as do batting-cage operators and even more obscure professions like animal-hide haulers."

"these barriers restrict job growth and provide no measurable health or safety benefits to the public."

"licensing requirements cost consumers more than $200 billion and result in up to 2.85 million fewer jobs."

"occupational-licensure regimes disproportionately harm people with low incomes. A study this year from the Mercatus Center shows that entry-level regulations, especially occupational-licensing requirements, contribute to income inequality. That’s because occupational licensing raises the costs of goods and makes it harder for less well-off Americans to find and maintain steady employment."

No comments:

Post a Comment