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Bob Ewing is the assistant director of communications for the Institute for Justice. ... See All Posts by This Author

Bob Ewing

The Right to Earn a Living Under Attack

Legislators and Special Interests Are Creating Needless Obstacles to Entrepreneurship

In Louisiana it is illegal to sell and arrange flowers without permission from the government. Aspiring florists must pass a subjective licensing exam that is graded by existing florists, who have a direct incentive to keep new competitors from entering the market. Thus the failure rate is higher than that of the Louisiana bar, which results in hundreds of well-qualified would-be entrepreneurs being denied the ability to work in their chosen profession.

No one can honestly believe that Louisiana’s flower cartel is necessary to protect consumers from renegade flower sellers. Rather, it is a classic case of protecting favored groups at the expense of consumers and entry-level entrepreneurs.

Such is the state of economic liberty in America today. Across the nation, the basic right to earn an honest living is under attack. Legislators and bureaucrats are teaming up with entrenched special interests to create needless obstacles to countless entrepreneurs’ pursuit of the American Dream. In the past few decades there has been a nationwide explosion of protectionist regulations—while there were about 80 occupations with such barriers to entry in 1981, today there are over 1,000.

An Institute for Justice (IJ) case that recently attracted international media attention vividly illustrates the uncontrolled growth of occupational licensing and the outrageous lengths that a cartel will go to protect all facets of its business from the most harmless of trades.

Mercedes Clemens was threatened with thousands of dollars in fines and criminal prosecution unless she stopped . . . massaging horses. In Maryland two powerful groups decided to monopolize the growing field of animal massage by requiring all practitioners to spend four years in veterinary school—where massage is not even taught.

Suggesting that only people with veterinary degrees are capable of massaging animals is like suggesting that only people with medical degrees are capable of massaging humans. Preventing Clemens—who is a licensed human-massage therapist and certified in equine massage—from working in her chosen trade has absolutely nothing to do with consumer or animal safety and everything to do with the financial interests of the veterinary cartel.

In 2004 the Tenth U.S. Circuit Court of Appeals wrote in Powers v. Harris, “[W]hile baseball may be the national pastime of the citizenry, dishing out special economic benefits to certain in-state industries remains the favored pastime of state and local governments.” And for decades, following the instructions of the U.S. Supreme Court, federal and state courts have stood by while legislators engage in this “favored pastime” at the expense of consumers and entrepreneurs.

Government Protects Special Interests

In the absence of meaningful judicial supervision, politicians have gone to almost any imaginable length to protect special interests. When a powerful lobby demands protection from competitors, governments have been all too willing to invent—and courts all too willing to accept—patently ludicrous excuses for shutting down entrepreneurs. A court upheld Louisiana’s florist-licensing scheme, for example, because requiring florists to take a test, which would be graded largely on the subjective beauty of their floral arrangements, might help protect the public from “infected dirt.”

The true victims of this new “favored pastime” are people like Clemens and countless other Americans, honest individuals whose lives have been turned upside down solely to protect the politically powerful. Such examples are seemingly endless.

In Texas, all computer-repair technicians must now become private investigators. “If you’re investigating or analyzing data, then you should need a little more credentials than someone who just repairs computers,” the legislative sponsor said. The PI license requires a criminal-justice degree—or a three-year apprenticeship under a licensed private investigator. If a consumer knowingly takes his computer to get repaired by an unlicensed specialist, he faces thousands of dollars in fines and a year in jail. This law no doubt benefits special interests, but those benefits come directly at the expense of ordinary repair technicians and their customers.

A new law in Philadelphia will make it a crime in the coming weeks to talk about the Liberty Bell for money without the government’s permission. Unlicensed tour guides will be subject to hundreds of dollars in fines for talking about the place where the Declaration of Independence was written. Perhaps the most well-organized cartelization effort underway in the United States today is in the interior-design industry. A powerful faction of insiders has already put thousands of its competitors, mainly middle-aged and elderly women, out of work.

The American Society of Interior Designers (ASID) represents less than 3 percent of all designers, but its members have designated themselves as spokespeople for the entire industry. In over 30 years of lobbying, ASID has never presented a single shred of evidence to support its extraordinary claim that literally “every decision an interior designer makes affects life safety and quality of life.”

ASID has been relentless in teaming up with legislatures coast to coast in its strategy for total cartelization. IJ has documented these efforts in a study titled “Designing Cartels.”

Such laws exist today for one reason: Our nation’s judicial system fails to protect the right to earn a living. Courts have decided that this fundamental right—economic liberty—is simply not as important as other rights, and less-important rights are thus not subject to meaningful judicial scrutiny and rarely are afforded protection under the law. If the government can simply dream up a conceivable reason for violating economic liberties, even if that reason is based on no facts, the regulations are generally upheld. Amazingly, courts will even help by inventing their own hypothetical rationales for economic protectionism. This system does not just stack the deck—it gives the politically powerful a hand full of jokers.

Thankfully, entrepreneurs are fighting back. Taxicab drivers, African hair-braiders, sign-hangers, waste haulers, casket sellers, and others have battled the odds (with help from IJ) to strike down occupational-licensing schemes.

Mercedes Clemens’s lawsuit has already caused one of the licensing boards to backpedal. The Philadelphia tour guides, now represented by IJ, had a hearing in federal court on October 6. In Texas, computer-repair technicians and interior designers are standing up for their constitutional rights.

F. A. Hayek famously wrote that “the great aim of the struggle for liberty has been equality before the law.” That is precisely what the fight for economic liberty is all about.

There Are 8 Responses So Far. »

  1. The Insitute for Justice needs to do more against these insidious criminal cartels. As a geologist from New Mexico I am not able to \’registrar\’ for a license to work as a geologist because of the engineering geologists and hydrogeologists have kept us out of the loop. I then find it difficult to work in other states because of THEIR criminal laws. Laws must be passed to safeguard a persons right to work. Cartels have made it impossible to change professions without first getting advanced training or taking horrible tests that really don\’t test an individuals knowledge and expertise.

  2. I am behind Mercedes Clemens 100%. I own and operate a salon in Maryland. My husband is a licensed massage therapist, a licensed senior cosmetologist and a licensed master barber. We have already had an issue with the Maryland board that oversees massage therapy. We used to belong to an association for hairstylists. I am not well liked by members of that association because I run a tax compliant salon and that is a rare duck in that industry. There is an issue in the existing licensing law which is not enforced properly and it allows licensees to slip away under the radar screen and practice illegally. I actually think it is fine because I do not see the public being harmed here. I have given proof to this board about how rife the problem is with underground activity. I have showed this board where they flaw is in their attempts to properly enforce their affiliation clause (5-605) however, they will do nothing to fix the problem. This causes the lawabiding licensees and salon owners to have to compete on an unfair playing field. In addition, salon owners are forced to hire licensed workers who spend 1500 hours in training in licensed schools. The entire time these students spend in these schools they work on paying clients who pay these students tips. The IRS does not hold the school owners accountable for the reporting of these tips that they allow the students to earn because there isn’t an employer/employee relationship. A 2002 ruling by the Supreme Court (US vs Fior d’Italia 536 U.S.238 (2002)), has placed an enormous burden on business owners who allow their employees to accept tips. This lawsuit was concerning a restaurant. Unlike the restaurant industry, a salon is subjected to being forced to hire licensees who have spent a good part of two years in a school accepting tips where they have never had to report them, never had any training or testing on these laws that govern them with respect to tax law. Salon owners who hire these people and wish to be compliant, are in a situation that is very hostile. These people know they can slip away under the radar screen and they hold salon owners hostage to turn their heads to tip reporting and also to engage in misclassification of worker status or they will go completely underground. I commend Mercedes and the Institute for Justice.

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