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A bipartisan bill package is under review by the House Regulatory Reform Committee that would reform key problems with occupational licensing in Michigan, the most onerous being in the requirement of good moral character to obtain a license.

To determine the quality of their moral character, do state licensing officials meet with each applicant and interview friends and family?

No. They just look at his or her criminal record.

State law defines good moral character as, “the propensity on the part of the person to serve the public in the licensed area in a fair, honest, and open manner.” That seems broad and forgiving. But in reality, the process isn’t.

The new bills would end the automatic assumption that previous felony convictions constitute poor moral character, a supposition that implies the criminal justice system is an institution dedicated solely to punishment, not to rehabilitation.

To deny a license, the state would have to document a reason beyond a felony conviction. Those convicted of fraud could still be denied if the crime relates to the occupation.

For a state that just passed the Marshall Plan for Talent and intends to spend $100 million to produce more skilled workers for in-demand jobs, these unreasonable requirements prevent willing workers from participating fully in the economy.

“It seems crazy that we have guys who want to be roofers, but they have a drug charge that prevents them from doing the work when that should be the employer’s decision,” says Jarret Skorup, director of marketing and communications at the Mackinac Center for Public Policy.

The restriction actually leads to higher rates of criminal recidivism.

A report by Stephen Slivinski of the Center for the Study of Economic Liberty at Arizona State University compared state occupational licensing barriers and the effects on former offenders.

Between 1997 and 2007 the states with the heaviest occupational licensing burdens saw an average increase in the three-year, recidivism rate of more than 9 percent. Conversely, the states that had the lowest burdens and no character provisions saw an average decline in recidivism of nearly 2.5 percent.

“States that have high barriers of entry into labor force coming out of prison have a hard time getting former prisoners reintegrated into society,” Slivinski says. “Even if you have work training programs and drug treatment programs, all efforts will be moot if they can’t get into the workforce.”

Barriers in Detroit are higher than in most cities in Michigan. Beyond the state licensing requirements, Detroit licenses about 60 occupations, 30 of which Michigan chooses not to license, layering on additional fees and requirements.

Occupational licensing needs a broad overhaul — many occupations should require licensing at all. Removing the morality clause and allowing former offenders more opportunities for employment is a great step forward.

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