Thursday, February 12, 2015

Want To Start A Blog in Philadelphia? You’ll Need A $300 License For That!

FEBRUARY 12, 2015

(Grant Phillips) The American Dream represents hard work and success of free individuals pursuing their own economic gains. It is often expressed in “rags to riches” stories of impoverished citizens obtaining great feats through their free will. Today, people question whether that dream still exists. Politicians want to impose more regulations to “restore the American Dream”. In reality, we need less regulation and more economic freedom. People can lift themselves from poverty, but it has to be easier to start lifting.

Licensing regulations reduce economic freedom by creating barriers to market entry. For example, in my current home of Philadelphia, bloggers are required to obtain a $300 permit from the city. Blogging is by no means a lucrative business. In fact, an estimated 80% of bloggers will never make more than $100 from their work. A city official ironically says Philadelphia “loves the self-employed”. These permit-happy bureaucrats fail to grasp basic economics: occupational licensing can be detrimental to the economy.

Today, nearly 500 different occupations require some form of licensing. Economically speaking, this translates in to a reduction and constraint on supply. From hair braiding to lemonade stands, government has increasingly targeted different occupations for licensing. Licenses are now required by30% of occupations in the workforce, which is up from 5% in the 1950s. This does not mean that more occupations require exceptional training. It does indicate that more occupations are prohibited without such a license.

Occupational licensing can protect consumers, particularly in markets where expertise is required (such as electricians). However, applying that logic to electricians does not make it true for dog groomers, nor does it help the consumer.