Free the Lemonade: Occupational Licensing as a Barrier to Young Entrepreneurship
By GABRIELLE ETZEL

Gabrielle Etzel Archives, Business, Economic Development, Finance, History, Law, National, People, Politics, The Americas 4 Comments

Gabrielle M. Etzel is a recent graduate of Grove City College with a B.A. in Political Science and a minor in Economics. She is a freelance Political Analyst, Writer, and Editor in Chief of the Unvarnished Blog.

This week, three young girls in my neighborhood officially became capitalists by selling braided friendship bracelets on the roadside. When I asked the girls–between the ages of 8 and 12–why they chose to seize this particular opportunity, they told me that their initial idea was a lemonade stand, but that they lacked the central ingredient: lemons.

I didn’t have the heart to tell these young and hungry entrepreneurs, who spent hours in the Labor Day sun waving to cars on our busy street corner, that their original venture of a lemonade stand would have also lacked another very important feature: the proper state and local licensing.

According to Country Time Legal-ade, thirty-four states in the U.S. require would-be lemonade vendors to acquire a variety of licenses, pay an absurd amount of fees, and jump over a plethora of bureaucratic hurdles in order to legally engage in this traditional summer entrepreneurial endeavor. This type of governmental red-tape not only squashes the entreprenurial, go-getter spirit of American youth but also creates a legal nightmare for unwitting families. (Fun fact: The family in this hyperlinked story led to the recent changes to Colorado state law regarding lemonade stands.)

Retrieved from Country Time Legal-Ade

Retrieved from Country Time Legal-Ade

 

https://youtu.be/6kWeeN0noQs

 

I didn’t have the heart to tell these young and hungry entrepreneurs, who spent hours in the Labor Day sun waving to cars on our busy street corner, that their original venture of a lemonade stand would have also lacked another very important feature: the proper state and local licensing.

According to Country Time Legal-ade, thirty-four states in the U.S. require would-be lemonade vendors to acquire a variety of licenses, pay an absurd amount of fees, and jump over a plethora of bureaucratic hurdles in order to legally engage in this traditional summer entrepreneurial endeavor. This type of governmental red-tape not only squashes the entreprenurial, go-getter spirit of American youth but also creates a legal nightmare for unwitting families. (Fun fact: The family in this hyperlinked story led to the recent changes to Colorado state law regarding lemonade stands.)

However trivial these “lemon laws” may sound, they are only glaring symptoms of a pervasive culture of government-imposed occupational licensing that hinders low-educated and low-income entrepreneurs from entering the market.

Retrieved from International Liberty

According to data from the Mercatus Center at George Mason University, many of the most accessible jobs for individuals with little experience or formal education–including cosmetology, hair-styling, truck or bus driving, athletic training, and pre-K teaching–necessitate excessive hours of unpaid training and hefty fees to Uncle Sam. Instead of being spent on building a reputation and providing their services, these valuable hours and dollars are wasted on bureaucratic red tape–and that’s for those who are able to make their way through Leviathan’s obstacle course.

A Cato Institute study recently found that the presence of occupational licenses decreases the labor supply on average by 17-27%, disproportionately impacting the lower-income population. This statistic is similar to the finding of other comparable studies in the field that suggest fields that necessitate occupational licenses grow 20% slower than other sectors in the marketplace. Ultimately, the data shows that occupational licensing decreases growth and opportunities for those who need it most.

With less new entrants into fields that require state and federal licensing, not only do consumers miss out on the benefits of competition in the marketplace–including innovation, lower prices, and better service–but also lower-income individuals are less able to climb the ladder of social mobility and lesser-educated individuals are unable to get their foot in the door for practical experience. As Tyler Cowen writes when addressing the problem of shrinking upward mobility in America:

Some of the decline in labor mobility may stem from the law itself, specifically the growth of occupational licensure. While once only doctors and medical professionals required licenses to practice, now it is barbers, interior decorators, electricians, and yoga trainers. More and more of these licensing restrictions are added on, but few are ever taken away, in part because the already licensed established professionals lobby for the continuation of the restrictions. In such a world, it is harder to move into a new state and, without preparation and a good deal of investment, set up a new business in a licensed area.

I would like to be able to say that the only barrier standing in the way of the entrepreneurial spirit in America is our will-power to succeed; however, our governments–federal, state, and local–have adopted a culture of occupational licensing that is not only preventing upward mobility but is also strangling youth entrepreneurship.

Fortunately, there is a bi-partisan campaign to reduce these barriers to entry across the United States. Let’s hope that these efforts to increase the availability of economic opportunity for all Americans–regardless of age–are successful.

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Gabrielle M. Etzel is a recent graduate of Grove City College with a 

B.A. in Political Science and a minor in Economics. She is a freelance Political Analyst, Writer, and Editor in Chief of The Unvarnished Blog <https://theunvarnishedblog.wordpress.com/>, direct email to getzel222@outlook.com  | LinkedIn<https://www.linkedin.com/in/gabrielle-m-etzel-60090/>

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She is also a contributor to the Yonkers Tribune and the radio program, Westchester On The Level. Although she plans to pursue graduate study in American Politics and Public Policy, Gabrielle’s primary career goal is to make quality social science content accessible to a variety of audiences. If you liked this piece, consider checking out The Unvarnished Blog. Computer access to the Wednesday, September 11, 2019th broadcast of Westchester On the Level can be heard “Live” or “On Demand”. The program can be heard by accessing the following hyperlink … http://tobtr.com/s/11496363. You can share your opinion or make inquiry on this subject by calling 347-205-9201. This segment will be heard from 11-11:30am.

Gabrielle EtzelFree the Lemonade: Occupational Licensing as a Barrier to Young Entrepreneurship
By GABRIELLE ETZEL

Comments 4

  1. It is sad that the government wants to control everything in our lives that it attempts to squash the entrepreneurial endeavors of even the very young.

      1. Seriously??
        Business grows with less government intervention.
        Capitalism produces revenue and government, which does not create revenue, wastes wealth.
        Additionally, regulating and licensing young entrepreneurs diminishes creativity and initiative.

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