Minnesota Rejects Attempt to Cartelize Interior Design Industry

J. Justin Wilson
J. Justin Wilson · February 27, 2009

Minneapolis—Last week, a senate committee in the Minnesota state legislature voted down a bill to restrict who can work as an interior designer in multi-unit homes and office buildings.  

“I’m thrilled the state senators saw that this bill had nothing to do with protecting the public’s health and safety and everything to do with reducing competition by imposing uncalled for licensing requirements,” said Mike Palkowitsch, a St. Paul-based designer who for 37 years has advised both residential and commercial clients.  “Not one condo developer or commercial construction company testified in favor of the bill.  The only proponents were industry insiders who would benefit from less competition.”

In a near-unanimous vote, the state Senate’s Commerce and Consumer Protection Committee rejected the bill pushed by the local chapter of the American Society of Interior Designers (ASID) and representatives from the University of Minnesota’s College of Design.  The bill, S.F. 0376, empowered a state board to enact laws restricting work on any project larger than a two-family house to those who meet still-to-be determined academic and experience requirements.

“This bill was special interest politics at its worst: a group of industry insiders using governmental power to put competitors out of work under the guise of protecting the public’s health and safety,” said Lee McGrath, executive director of the Institute for Justice Minnesota Chapter.  “The senate committee saw the bill’s real purpose—to abuse occupational licensing.  Laws cannot be created simply to favor a cartel of interior designers.”

Minnesota is not alone in facing anti-competitive interior design legislation.  ASID and other industry organizations are engaged in a long-running lobbying campaign to cartelize the interior design industry under the guise of increasing “the stature of the industry” by putting competitors out of business.

Occupational licensing laws like those advocated for by ASID cost the national economy over $100 billion in lost output and transfer an additional $300 billion from consumers to members of the regulated occupation in the form of unearned monopoly profits.  Indeed, there has been an explosion of occupational regulation in America, from about five percent of the workforce in the 1950’s to nearly 30 percent today.
“Minnesota joins Colorado, New Mexico, Washington State and others that have rejected abusive licensing proposals,” said Clark Neily, a senior attorney at the Institute for Justice who is leading the public interest law firm’s battle against ASID’s cartelization efforts.  “The victory in Minnesota comes at a fortuitous time as we continue our fight against similar efforts in Texas, Oklahoma, Connecticut and elsewhere.”