Is New York City Killing Entrepreneurship?

Washington, D.C. –In a city where 10 percent of the population is on public assistance, the right to earn an honest living receives less legal protection than the supposed “right” to receive welfare. As a result of licensing and credentialing requirements as well as the protection of public monopolies, New York City is stifling opportunity for an army of would-be entrepreneurs who could be a vibrant addition to its economy. In the process it is making outlaws out of otherwise industrious people who simply want to earn an honest living.

These are among the conclusions drawn by a new study titled, “Is New York City Killing Entrepreneurship?” The study was released today by the Institute for Justice, a Washington, D.C.-based nonprofit public interest law center that litigates nationwide on behalf of would-be entrepreneurs.

The report:
Examines the government-created barriers of licensing and permitting laws and public monopolies, and their effect on entry-level entrepreneurship in New York City;

Documents how, in occupation after occupation, obstacles to enterprise often far exceed any legitimate exercise of government’s authority to protect public health and safety;

Highlights the heroism and tragedy among those who seek nothing more than to earn an honest living in their chosen trade, but who find this aspiration frustrated by rules and requirements whose main purpose appears to be to limit entry and competition in particular occupations; and

Makes recommendations designed to ease legal entry into such endeavors, while recognizing government’s role in protecting public health and safety.

The report examines government-created barriers in industries that have traditionally provided a better way of life for the economically disenfranchised: car services, child care centers, commuter vans, food vending, hairdressing, merchandise vending, newsstands, residential trash pick-up services and taxicabs.

“The full range of these regulations is head spinning,” said William Mellor, the Institute’s president and author of the report. “No fewer than 73 pages in the Official Directory of the City of New York list various types of licenses, permits or other forms of certification which one may need to own or operate a business or simply to be employed in one.”

Among the examples Mellor points out are: One needs a license to repair video-cassette recorders; to work as an usher or to sell tickets at wrestling matches; to set up a parking lot or a junk shop.

“Government policies should have a presumption in favor of honest enterprise, not regulatory constraints,” Mellor said. “Far too many regulations in New York preserve the status quo and protect existing businesses while hurting those outside the economic mainstream and the public these entrepreneurs seek to serve.”

Under Mellor’s lead, the Institute for Justice has successfully broken up taxicab monopolies in Denver, Indianapolis and Cincinnati and is currently working to do the same in Boston and Portland. It has opened up the Houston jitney van market and deregulated the hairbraiding industry in Washington, D.C. All of these occupations, like those featured in the report, are ideal avenues for industrious entrepreneurs of modest means who want the opportunity to work for themselves.

“New Yorkers deserve a chance for a better future made possible when economic liberty––the right to pursue an honest living without arbitrary government interference—is respected by governments at every level,” Mellor concluded.

Later this fall, the Institute is expected to release similar studies in six other U.S. cities: Baltimore, Boston, Charlotte, Detroit, San Antonio and San Diego.

The Institute for Justice advances a rule of law under which individuals control their destinies as free and responsible members of society. Through strategic litigation, training, and outreach, the Institute secures greater protection for individual liberty, challenges the scope and ideology of the Regulatory Welfare State, and illustrates and extends the benefits of freedom to those whose full enjoyment of liberty is denied by government. The Institute was founded in September 1991 by William Mellor and Clint Bolick.

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(NOTE: To arrange interviews on this subject, journalists may call John Kramer, the Institute for Justice’s director of communications, at (202) 955-1300.)