September 28, 2018 - 9:00 pm
It’s amazing to see the creative activities people come up with to earn a living when they don’t have to ask the government for permission.
On Sunday, the Review-Journal’s Madelyn Reese profiled Reanu Elises, an 18-year-old UNLV freshman, who flips clothes for cash. Mr. Elises goes to thrift shops looking for secondhand items to buy that he can resell on a mobile app. In a year, Mr. Elises estimates he’s made $1,000. It’s also given him a taste of what it’s like to be an entrepreneur. He wants to get into business one day, opening a retail clothing store and designing his own line of clothing.
This is an example of the win-win situations that abound in a free market. The thrift store moves more inventory. Mr. Elises can work his own schedule and make some extra money. His customers get brand-name clothes at a discount and without the hassle of digging through racks themselves.
Now imagine what would have happened to Mr. Elises if government charged him even a modest fee — say, $200 — for the privilege of starting a business. That startup fee would have cost him the equivalent of two months’ profit. It might have stopped him from ever starting.
This is why “barriers to entry” are so damaging. To an established business, a $200 fee is an annoyance. To an aspiring entrepreneur, even small fees and procedural hoops can stop small-business dreams before they ever begin.
Fortunately for Mr. Elises, as a home-based business earning what he does, he’s exempt from paying Nevada’s $200 business license fee for sole proprietorships.
But it’s not just fees that stop would-be entrepreneurs. Imagine if Mr. Elises had to take an 80-hour course in order to get licensed to resell clothes. That’s ludicrous, right? Whom could Mr. Elises hurt by selling clothes? If his customers don’t like his merchandise, they’ll buy from someone else. He’ll either improve or go out of business.
Yet, if you want to cut hair in Nevada, you need a license from the government. To get that license, you have to take a 1,500-hour training course. Becoming an interior designer requires four years of education and two years of experience. It takes four years of experience to qualify for a landscape-contractor license. A 2017 Institute for Justice report found that Nevada had the second-most burdensome licensing laws in the entire country.
That needs to change. Entrepreneurs should be free to pursue their passions with minimal government interference and without having to get a bureaucrat’s blessing.