Mired in a nationwide jobless recovery, state and local governments have the power to create jobs and transform communities if they do one simple thing: Get out of the way of aspiring entrepreneurs.
Unfortunately for small businesses, however, laws restricting economic liberty are becoming more commonplace in America. Consider that since the 1950s, the percentage of occupations in the United States that require people to obtain permission from the government in the form of a license before they can pursue their chosen occupation has grown from a mere 5 percent to more than 30 percent.
In a series of reports the Institute for Justice (IJ) released last week, we highlighted five entrepreneurs who sought to pursue their share of the American dream by creating jobs for themselves and others, but found needless and anti-competitive government regulations in their way. Each entrepreneur stood his ground and, represented by IJ, filed suit against the government. Of these five, one is still litigating, three won and went on to create dozens (if not hundreds) of jobs for themselves and others, and one lost and had to relocate her business to another state to pursue a productive livelihood. She now employs more than 100 people in nine states - but not in her home state, which blocked her effort to start a new and innovative business.
Among those featured in the reports is funeral-home and cemetery owner Kim Powers Bridges from Knoxville, Tenn., who battled bureaucrats in her home state of Oklahoma, where she wanted to sell caskets online. Unsuccessful in that legal fight, she moved to Tennessee, where she built a brick-and-mortar business, and now she has holdings in nine states from the Gulf Coast to New Mexico and Colorado. As is so often the case, one economically restrictive state’s loss is the gain of another state that has created a more hospitable climate for entrepreneurs. Among the more harrowing tales in Ms. Bridges’ report, which demonstrates the dramatic lengths to which this entrepreneur went to serve her clients, is her effort to recover and restore the remains of those entrusted to her after Hurricane Katrina hit her newly purchased Mississippi cemetery. This is the kind of dedicated entrepreneur states like Oklahoma lose out on gaining when they block would-be entrepreneurs for no reason other than to protect existing businesses from competition.
High-tech entrepreneur Thane Hayhurst from Dallas not only helps businesses across Texas keep their computers running at peak efficiency but also places skilled high-tech workers from across the nation in hard-to-fill jobs in Texas, and he volunteers for local community centers. Despite all this good work, the state of Texas threatened to put him out of business under a law that effectively requires anyone who examines third-party computer data to become a licensed private investigator. Sound ridiculous? Well, that’s because it is.
Seattle-area bagel businessman Dennis Ballen is the undisputed bagel king of the Pacific Northwest. He has 50 employees, including many who otherwise would find it nearly impossible to secure a good job. Mr. Ballen donates nearly as many bagels as he sells, supporting nonprofit organizations across his region. Yet his thriving enterprise was almost driven out of business by a local law that barred him from advertising his business with a portable sign. Such laws - based on nothing more than a bureaucrat’s arbitrary claims of improving a city’s aesthetics - restrict how small businesses can attract customers, but a business with no signs is often a sign of no business. Mr. Ballen successfully fought for his First Amendment rights and, in the process, secured a precedent that has since freed other businesses to advertise.
Many other businesses across the nation in other states aren’t so fortunate. In Dallas, for example, under a new city law, shop owners must keep commercial advertisements off the top two-thirds of their store windows, and 85 percent of a window must be free from ads. Dallas’ ordinance does nothing but create problems for small businesses and stifle honest enterprise, which are the last things anybody should be doing in this economy.
Despite all that entrepreneurs do for us each day to make our lives better and easier, too often they find government-imposed roadblocks standing in their way. IJ created these reports to put a human face on the issue of economic liberty so state and local government officials could better appreciate what is lost when they tie up entrepreneurs in red tape or, worse, block entrepreneurs from entering the marketplace.
So how can we create long-term, dynamic growth for our nation? That power lies where it always has in America: in unleashing the power of one entrepreneur.
Chip Mellor is the president and general counsel for the Institute for Justice. Read more about IJ’s work with entrepreneurs at ij.org/Power.