Is your business “needed”?
Bizarrely, in many states, if you want to start a business, you first must convince bureaucrats that your business is “needed.”
Four years ago, Louisiana blocked social worker Ursula Newell-Davis from helping kids with special needs. Bureaucrats said she hadn’t proved her business was needed.
“Why does the state of Louisiana have the right to stop me from doing what I love?” she asks in this update video.
Good question. Ursula has a master’s degree and a social work license. For two decades, she’s helped kids with special needs.
One, Kamal, told us he struggled to make friends, until Ursula “helped teach me how to talk to people.”
Kamal’s mother is grateful: “She explained to me things that I didn’t understand about my kids. It allowed me to go back into the community and work.”
Ursula helped many families. But four years ago, she tried to help more kids by doing short-term respite work.
Louisiana wouldn’t let her.
“You have these skills, you could help people,” I tell her. “What do you think is going on with these regulators?”
“Louisiana wants to limit how many agencies they have to regulate,” she replies. “Make it easy for the state.”
Anastasia Boden of the Pacific Legal Foundation is helping Ursula sue Louisiana, arguing that its regulation is unconstitutional.
“Louisiana gives you no clue about how to prove you’re needed,” says Boden. “That would be difficult for even the best entrepreneurs. Nobody can prove with any certainty that they’re needed.”
Right. I can’t prove Stossel TV is “needed.” Is McDonald’s needed? What about the local phone store?
“The only way to find out is to open up your doors and try,” says Boden.
But Ursula isn’t allowed to try, even after giving regulators what they demanded: She rented office space, paid fees and wrote seven pages about why her work is “needed.”
Louisiana decided that wasn’t good enough.
That’s what usually happens. The year Ursula applied, the state turned down 75% of applicants. The health department says it limits “the burden on regulators.”
“That’s just not a legitimate excuse,” complains Boden, “that government doesn’t have enough money to administer people’s constitutional rights.”
Stossel TV reached out, but state officials wouldn’t talk to us about their rule.
Thirty-five states and Washington, D.C. have (appropriately named) “CON” laws requiring entrepreneurs to get a Certificate of Need before opening certain businesses.
This creates nasty side effects. Try not to get injured in Kentucky. The state’s CON law for ambulances results in longer wait times for transportation.
But Louisiana is the only state that applies this nonsense to social workers doing respite work. The result:
“Consumers in Louisiana are less satisfied with their care,” says Boden. “It might be easier for the government, but that’s not benefiting consumers.”
If these laws don’t benefit consumers, why do they stay on the books?
“Hospital (and) medical associations give money,” explains Boden.
“They don’t want the competition,” I ask.
“Of course not! But the result is to deprive people of economic opportunity and to make care worse,” says Boden.
Now, four years later, Boden’s latest lawsuit winds its way through America’s bureaucratic courts, and bureaucrats still won’t let Ursula do respite work.
But good news: Ursula now helps people with special needs by employing them at her new fried chicken restaurant.
At least Louisiana’s government doesn’t get to decide if a new restaurant is “needed.”
What Louisiana’s bureaucrats do is just wrong.
So often, government just gets in the way.
Every Tuesday at JohnStossel.com, Stossel posts a new video about the battle between government and freedom. He is the author of “Government Gone Wild: Exposing the Truth Behind the Headlines.”
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