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MELLOR: Job creation 101

Cut state and local red tape

- The Washington Times - Thursday, June 9, 2011

Unemployment has now risen back up above 9 percent. Yet, at a time when our nation desperately needs private-sector job creation to lift us out of recession, one major impediment remains menacingly in place preventing would-be entrepreneurs from creating jobs for themselves and for others.

The culprit? Government-imposed barriers to honest enterprise enforced by state and local governments.

The nation looks to Congress and the president for the answers to our jobs problem but if the public wants to see the path cleared to job creation, it should look much closer to home - starting with their own city council.

Here are but a few examples of government-enforced restrictions discovered by my organization, which has litigated over the past 20 years to free entrepreneurs from needless government regulation and red tape:

c Want to sell food as a street vendor or take tourists on Segway tours in the District of Columbia? You can't unless you submit yourself to big-government micromanagement and constitutionally questionable licensing by government officials. No wonder that year in and year out, Washington is at the very bottom of the Small Business and Enterprise Council's Small Business Survival Index.

c Want to drive a van as a means of taking people to work in New York? You can't do so freely because the government won't let you compete with the politically powerful transit unions.

c Want to sell caskets in Oklahoma or Louisiana? You can't unless you get a government-mandated license that protects funeral-home owners from competition.

c Want to braid hair in Utah? You can't do that either unless you become a government-licensed cosmetologist (racking up more than $10,000 in needless government-forced educational debt). The cosmetology schools and the politically protected cosmetologists love this law, but consumers and would-be hairbraiders rightfully hate it because it limits choice and opportunity.

All entrepreneurs want to do is create good jobs for themselves and for others, and yet day after day, they find state and local governments standing in their way - often for no other reason than to protect the politically powerful from competition, which is hardly a justifiable use of government power. Sometimes the laws are designed to satisfy the arbitrary whim of regulators, such as kicking out one kind of business because a city official doesn't like the way it looks, even though it poses no threat to the public's health or safety.

Removing such regulatory barriers to economic opportunity is not a silver bullet that will solve all of our nation's economic woes. Other problems, such as limited access to capital, remain in place and are a significant impediment to job creation. But if such government-imposed regulatory barriers are removed, the many entrepreneurs out there with the drive and the capital to start their own businesses would be free to create jobs for themselves and for others. That is not merely rhetoric; the Institute for Justice demonstrated through a series of reports titled, "The Power of One Entrepreneur," that when entrepreneurs overcome these government-imposed barriers (either through litigation, legislative reforms or by moving someplace more free), they go on to create dozens of jobs and often become important local philanthropists, improving the social fabric of their communities. The institute's reports feature successful entrepreneurs who had a profound and positive impact on the world around them only after big-government barriers to earning an honest living were surmounted.

If you need one more fact to be convinced of the need to trim back the thick undergrowth of government regulation, consider this: In the 1950s, only one in 20 American workers needed the government's permission to work; today, that figure is nearly one in three.

If America wants to restore its proud title as the "Land of Opportunity" we need to assert our rights once again, including our right to economic liberty. Only then will you see private-sector job growth, the size and scope of government power limited, and a return to the confidence that America's best days are ahead of us.

Chip Mellor is the president and general counsel of the Institute for Justice (ij.org).

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