Occupational Licensing Is Strangling the Small Businesses of the Coast

The surf shop, the instructor, the shaper: all increasingly buried under permits and fees

The coastal towns of California have long been home to a particular kind of small enterprise: the surf shop, the board shaper, the surf instructor, the wetsuit repairer, the countless small businesses that serve and sustain the surf community. These enterprises embody the entrepreneurial spirit at its most authentic, founded by people who love what they do and built on skill, reputation, and direct service to their customers. They are also increasingly buried under a growing burden of licensing, permits, and regulation that threatens their survival.

The Growing Burden

The proliferation of occupational licensing has reached into corners of the economy that once operated freely, requiring those who would offer their skills and services to first obtain the permission of the state. The surf instructor who would teach a beginner to ride a wave, the shaper who would craft a board, the small operator who would run a surf camp, increasingly find themselves required to navigate a thicket of licenses, permits, certifications, and fees before they may lawfully offer their services.

This burden falls hardest on the smallest enterprises and the individual practitioners who lack the resources to navigate complex regulatory requirements. The large business can absorb the cost of compliance, hiring specialists to manage the paperwork and spreading the cost across a large operation. The individual surf instructor or small shop cannot, and for them the regulatory burden can be the difference between a viable enterprise and an impossible one, foreclosing the modest livelihoods that the surf economy once supported.

The economic analysis of occupational licensing, conducted by researchers at institutions including the Mercatus Center and free-market policy organizations, has consistently found that licensing requirements often serve less to protect the public than to protect existing businesses from competition, raising prices, reducing opportunity, and burdening the entrepreneurs and consumers they purport to serve. The surf economy, with its many small and individual enterprises, is particularly vulnerable to this burden.

Who Licensing Really Serves

The justification offered for occupational licensing is the protection of the public, the assurance that those who offer services meet certain standards of competence and safety. In some cases, where genuine and serious risks to public safety are at stake, this justification has force. But in many cases, the licensing requirements bear little relation to genuine safety concerns, serving instead to restrict entry into occupations, to protect existing practitioners from competition, and to generate revenue for the licensing authorities.

The surf instructor who has ridden waves for decades, who knows the ocean intimately, who has the skill and judgment to teach safely, gains nothing in competence from a licensing requirement, and the public gains little in protection. What the requirement accomplishes is to raise a barrier to entry, to burden the would-be instructor with cost and complexity, and to reduce the number of people offering the service, to the benefit of those already established and the detriment of newcomers and consumers alike.

This pattern, in which licensing serves the interests of incumbents and authorities rather than the public, is well-documented across many occupations. The licensing requirement, presented as consumer protection, functions in practice as a restriction on competition and opportunity, a barrier that protects those inside the licensed occupation from the competition of those who would enter it. The surf economy’s small enterprises are among the casualties of this dynamic.

The Cost to Opportunity

The deepest cost of the licensing burden is the opportunity it forecloses, the enterprises never founded, the livelihoods never pursued, the entrepreneurial energy never realized because the regulatory barriers proved too high. The young person who would teach surfing, the craftsman who would shape boards, the entrepreneur who would serve the surf community, may find the path foreclosed by requirements that have little to do with genuine public protection and much to do with restricting entry.

This foreclosure of opportunity falls particularly hard on those of modest means, who lack the resources to navigate the regulatory requirements and the connections to ease their way through. The licensing burden, in this sense, entrenches existing advantage, protecting those already established while barring the entry of newcomers, reducing the economic mobility and opportunity that the surf economy, at its best, has provided.

The reduction of opportunity harms not only the would-be entrepreneurs but the consumers and communities they would serve, who are deprived of the services, the competition, and the economic vitality that a freer market would provide. The surf town buried under licensing requirements is a poorer place, with fewer enterprises, less competition, higher prices, and diminished opportunity, than it would be under a lighter regulatory hand.

Freeing the Coastal Economy

The reform of occupational licensing, the reduction of unnecessary requirements, and the restoration of the freedom to offer one’s skills and services without excessive regulatory burden would revitalize the small-business economy of the coast, restoring the entrepreneurial opportunity that licensing has foreclosed. The surf economy, with its many small and individual enterprises, would be a particular beneficiary, freed from a burden that serves incumbents and authorities at the expense of newcomers and consumers.

This publication has argued throughout our network, including in related commentary at The London Prat, that occupational licensing has grown into a significant burden on small enterprise and economic opportunity, often serving the interests of incumbents rather than the public, and that its reform would benefit entrepreneurs and consumers alike.

The coastal economy is being strangled by licensing; freeing it would restore opportunity. For further reading on licensing reform, consult research from the Mercatus Center, and additional network commentary at The London Prat.

SOURCE: https://bohiney.com/