1889 Institute: Legislature should lower boom on barriers to entrepreneurism

Legislature Should Follow AG Hunter’s Lead, Lower Boom on Barriers to Entry

By Mike Davis

Recently, the Attorney General helped remove an obstacle to the expansion of legitimate liquor store competition - opining that Oklahoma’s five-year residency requirement to own a liquor store likely runs afoul of the U.S. Constitution.

This is a small victory. However, consumers win when they have more options. Licensing makes it harder for new competitors to enter a market. Oklahoma’s liquor licensees were effectively insulated from all out-of-state competition. Who would move across state lines to fill a market opportunity, and then wait five years before actually getting to work and earn income from it? Almost no one. The true goal of the law seems to have been to make sure only “True Oklahomans” - those who live here by accident of birth - could sell liquor. Outsiders who recognize a need and might seek to help Oklahomans by providing a service were out of luck.

Excluding out-of-state entrepreneurs and professionals is something of a grand tradition in Oklahoma. Attorneys who pass the bar exam in another state are only deemed competent to work in Oklahoma if they have practiced law continuously for FIVE of the last seven years. Those who pass Oklahoma’s bar and have NO experience are full attorneys as soon as they are sworn in.

Polygraph Examiners are granted reciprocity if they are from a state with equivalent licensing requirements, but only IF they have first practiced there for TWO years. Funeral Directors wanting to move into Oklahoma must have a license from a state with similar licensing requirements (few states match Oklahoma’s onerous standards) and FIVE years of experience.

Cosmetologists contemplating moving to Oklahoma who went to school in a state without a licensing board are out of luck completely. Oklahoma will not accept training reported directly from a cosmetology school outside the state - only from another licensing agency. Not only does Oklahoma’s legislature evidently believe our cosmetologists are unable to compete, it must also see our cosmetology schools as somehow lesser than their out-of-state rivals.

We should be embarrassed by this. Legislatures of old appear to have thought Oklahomans were not bright enough to compete with newcomers. They may have believed Sooners required more consumer protection than residents of other states (though licensing actually does very little to protect consumers). These laws were mostly passed well before any current legislative members took office, but that does not explain why so little has been done to repeal them. Oklahomans do not need extra paternalism or protectionism. We can recognize and seize entrepreneurial opportunity as well as anyone else. And we are perfectly capable of using the internet to check a practitioner’s reputation. It’s time the laws of the state reflect this reality.

Mike Davis is a Research Fellow at 1889 Institute. He can be reached at mdavis@1889institute.org.