There is a principle in life that says if any relationship is to work, there must be a fundamental foundation of trust. This is certainly true in business. If you go into business with someone and yet you don’t trust them, the venture, whatever it is, is sure to fail.
Unfortunately, so many business owners I’ve talked with through the years tell me they find themselves locked in an unwilling relationship with an untrusting partner: government. Ask most entrepreneurs, and they’ll tell you their competition is not their biggest worry. Their most frustrating challenges come from complying with excessive, redundant, and needless government regulations and unreasonable, uncaring, and stubborn bureaucrats.
One example of a way the government squashes and deters entrepreneurship is with excessive licensing requirements. Louisiana requires more occupational licenses than any other state in the nation other than the deeply blue state of Washington. We are tied with Washington. Want to start a business in Louisiana? Not so fast, my friend.
Louisiana, for example, is one of only four states to require a license to be an interior designer. If you want to get into the business of making people’s houses look all fancy on the inside, you are first required to pay $1,240 in fees, get 2,190 days of education and experience and then pass an exam. This is according to a study done by the Institute for Justice,a libertarian, nonprofit, think tank. The recently released report is based on data collected over the past two and a half years.
The same study also found Louisiana to be the only state to require a license if you want to be a florist. A florist! What could possibly go wrong if a florist operated without a license? What were legislators worried about and who are they trying to protect when they decided someone who arranges flowers in a vase needs a license? But there is such thing as a Cut Flower Dealer Permit in Louisiana. It reads, “The state authorizes the holder to self cut flowers either singly or in bunches. Cannot be arranged in any fashion. In order to apply for a cut flower dealer permit the applicant must be involved in the business of selling cut flowers.” The good news is you can sell flowers without a permit as long as you don’t put them in an arrangement. The state will trust you to do that. But if you want to arrange flowers, it will cost $90 a year in permit fees. More than 1,000 people in Louisiana currently have their flower-cutting and arranging license.
You also need a license in Louisiana if you want to become a tree trimmer. How in the world is some government bureaucrat going to be able to tell if you know how to trim a tree?
One of the worst examples of excessive licensing requirements in our state involves opening an alarm installation business. Alarm installers must first pay $1,400 in fees, demonstrate more than 1,800 days of education and experience, and pass four exams. Some states don’t require a license for alarm installers at all.
Overall, the Institute for Justice study found Louisiana and Washington demand more licenses than any other state, and that Louisiana also requires, on average, $360 in fees, 202 days of education and experience, and roughly two exams per licensed profession.
The dirty little secret in the licensing game is the very people who often lobby for license regulations are those already established in the industry. Through restrictive licensing, established businesses can deter competition, which allows them to jack up prices translating to higher profits, fewer hires, lower overhead, and an erosion of quality and less innovation. They legally grease the palms of politicians via campaign contributions, who in return tilt the playing field in their direction. In these days of intrusive, bloated, and big government, it’s politicians who often pick winners and losers instead of the free market. It’s crony capitalism at its finest.
Clearly some jobs need licenses like doctors, lawyers, and dentists. But since Louisiana leads the nation in requiring occupational licenses, we clearly have a problem. Politicians pushing for excessive and unnecessary licenses are motivated by one of two things, crony capitalism or an inherent mistrust of the free market. Neither is good for Louisiana.
Correction: In my Sunday column, I mentioned that U.S. Sen. John Kennedy had not returned a blue slip related to the nomination of Kyle Duncan to the 5th Circuit U.S. Court of Appeals and that Kennedy's action was an attempt to block a Senate committee hearing on Duncan's candidacy. Kennedy did return a blue slip, although it did not indicate Kennedy's support for Duncan's nomination.
Dan Fagan is a former TV and radio broadcaster who lives in Metairie. Email him at email@example.com.