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Have a great idea for a business? Not so fast. At nearly every step of the entrepreneurial process, the government imposes strict rules and regulations. Some regulations are so ridiculous that it discourages would-be entrepreneurships from even starting their business. For instance, in Texas it is legally required that computer repair technicians obtain an extraneous degree in criminal justice. In Florida, it is illegal to work as an interior designer without proper government licensing. Even if the designer has a college degree in the field, performing interior design services without a license is punishable by up to a year in jail or $1,000 in fines.
Often, compulsory licensing is used to restrict competition in a marketplace. Well-funded industry cartels lobby for strict licensing requirements that make it difficult for newcomers to sell their competing product or service. These harsh licensing laws are harmful to both entrepreneurs and consumers. Would-be entrepreneurs who cannot afford the high cost of licensing will not have the opportunity to operate their business. As a result, there will be fewer employment opportunities and consumers will be forced to pay higher prices for goods and services with less variety.
With unemployment at a high 9.6 percent, we must strive to get rid of unnecessary burdens faced by job creators. As the video “Why Can’t Chuck Get His Business Off the Ground” from the Institute for Justice shows, some would-be entrepreneurs simply give up due to these harsh regulations that limit competition in the market place.