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JANUARY 17, 2011 | Policy Report by COMMONWEALTH FOUNDATION
80 Ideas for a Prosperous Pennsylvania
A Blueprint for Transforming the Commonwealth
Pennsylvania must undergo a rapid transformation to reverse the poor policy decisions that have eroded economic freedoms and brought the state to its present condition. To provide a roadmap for success in this critical endeavor, the Commonwealth Foundation has compiled a list of 80 policy recommendations for Gov. Corbett and state legi
NOVEMBER 18, 2010 | Commentary by KATRINA CURRIE
Does Professional Licensing Protect Consumers or Big Business?
After his friend was killed by a drunk driver, Illinois resident Jonathon Schoenakase began to offer bar patrons a free ride home. Although he never charged for this service, Schoenakase did accept the occasional tip. For this, he was busted in a sting orchestrated by the local taxi operators and the police for "operating without a transport
AUGUST 28, 2006 | Commentary by STEPHEN ALBERT
The Burden of Over-Regulation
Summer’s Best Two Weeks (SB2W) is a non-profit summer camp located in the heart of Pennsylvania’s Laurel Mountains for children ages 8 to 18. SB2W counselors have led campers on rafting trips for over three decades. Yet in 2001, the Department of Conservation and Natural Resources forbid campers from rafting down the Lower Youghioghe
Recent Blog Posts
SEPTEMBER 13, 2011
Licensing Regulations Drives Out Entrepreneurs
A Morning Call article brings to light the anti-entrepreneurship policy of occupational licensing. The article focuses on fines imposed on folks trying, in most cases, to earn a living: "cosmetologists were the most heavily fined professionals, totaling $1.1 million in assessments since 2008."
Yes, the people that paint your nails have to be licensed by the government; so do natural hair braiders. Recently, there was a push to force interior designers to get a license from the state, apparently to protect citizens from ugly living rooms. The state even licenses small shops offering to sell your stuff on eBay, and folks giving rides to the Amish—all in the name of your safety.
Many of the fines were for working (e.g., painting fingernails) without a proper license, or on an expired license. (Curiously, one of the fines not collected was $2,000 for ... murder! Somehow, I think that fine isn't much of a deterrent.) Supposedly, this practice is justified on the grounds that "salons deal with harsh chemicals, and unlicensed operators often lack liability insurance," thus the state needs to protect customers.
Balderdash! Occupational licenses exist primarily to protect existing businesses against potential competitors. They favor big business against emerging entrepreneurs. Those most harmed by occupational licensing are low-income individuals—those who can't afford to spend 300 hours at a licensed cosmetologist school to be approved to braid hair.
What is the result? "... in many cases, these people move on to other states, for example, and can make it hard to collect [fines]." Hmmm...isn't the goal of economic policy to attract business, not drive out entrepreneurs?
posted by NATHAN BENEFIELD | 05:17 PM | 0 comment
NOVEMBER 15, 2010
Unwarranted Police Raids
Last week, the Daily Caller featured an article from the Institute for Justice (IJ), which revealed that police in Florida are raiding barbershops for drugs without search warrants, and arresting barbers for not having a state issued license.
As IJ points out, the police don't need a search warrant, because barbershops are licensed and regulated through the Florida Department of Business and Processional Regulations, where the need to follow rules supersedes things like civil liberty.
Like Florida, Pennsylvania's Department of State licenses and regulates barbershops. Last month's "Disciplinary Actions" reported that the Department collected $6,900 in fines and shut down eight barbershops in the Commonwealth, mostly for operating without a license. Acquiring a license costs almost $1,000 in fees, 1,250 hours of training, and passage of an entrance exam.
Pennsylvania has 29 professional licensing boards and commissions regulating numerous occupations. Unfortunately, this extensive network of state licensure often exists to protect current businesses from new competitors under the guise of protecting consumers. To get the state's economy back on track, restrictions on many occupations should be removed.
posted by KATRINA CURRIE | 03:00 PM | 0 comment
OCTOBER 27, 2010
It's Never Sunny for Philadelphia's Small Businesses
The Institute for Justice (IJ), in its new report, No Brotherly Love for Entrepreneurs, depicts just how bad the small business climate in Philadelphia has become. The city has embraced a bureaucratic culture that has led to the lowest rate of entrepreneurship of any of the 15 largest metropolitan areas in America.
To make sure it's always sunny in Philadelphia for future entrepreneurs, IJ suggests removing these barriers:
Update Zoning Laws: Philly enacted zoning laws 150 years ago and has yet to update these laws. Instead, bureaucrats create certain exemptions, which has resulted in a red-tape disaster for anyone setting up shop in the city. Additional unnecessary restrictions, such as forbidding individuals from operating a business in their home, limits free enterprise.
Reduce Stifling Taxation: Small businesses get hit with a whirlwind of fees that can make starting a new venture difficult. In fact, the law is so stringent that anyone who makes a buck from a lemonade stand or a blog is breaking the law, unless they register with the city and pay the business privilege fee.
Remove Unnecessary Permitting & Licensing: Unnecessary layers of bureaucracy make jobs more difficult to obtain by requiring entrance exams and city certification. A recent example is the 2008 law that made it illegal for a tour guide to work without passing a history exam to obtain a government-issued license.
IJ's report contains many stories showing how Philadelphia's barriers are a detriment to its citizens. The City of Brotherly Love, and Pennsylvania as a whole, should reexamine policies that discourage entrepreneurship.
posted by KATRINA CURRIE | 05:06 PM | 0 comment
