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October 13 2017

Regulating Little Entrepreneurs Will do Long-term Damage

via Forbes
by Christine Goss

A New York law banning pet sitting without a license sparked outrage among pet owners over the summer as news that a popular app had been operating illegally. The inane regulation provides yet another example of how government regulations kill job opportunities, limit choice and drive up prices for customers. But, while regulations like this certainly throw a wrench into an otherwise vibrant economy, they also inflict devastating, irreversible damage to our long-term economic health by shutting children and teenagers out of a formative experience: engaging in the marketplace.

Setting up a lemonade stand or feeding the neighbor’s cat while they are on vacation are hallmarks of childhood for many of us who remember the feeling of “making money.” But we gained a whole lot more than a few dollars bills. The value of these mini-businesses to a child or teen cannot be measured in revenue alone. Experiences like these allow young people to develop the skill set and the mindset to thrive both professionally and personally.

The formation that entrepreneurial ventures—no matter how small—provide to children and teens is invaluable. Responsibility, work ethic, discipline and persistence are a few of the basic virtues that working for money helps sculpt. Showing up on time, following through on commitments, and responding appropriately to failure or disappointment are all habits that should be formed during these early years. Engaging in the economy—even in a small way—enables children and teens to be creative and resourceful. For example, a few years ago some opportunistic Girl Scouts realized they could sell a lot more boxes of cookies in less time by positioning themselves outside a marijuana shop.

Although I suspect an adult helped the girls come-up with the idea, I have little doubt that children, when given the opportunity, exhibit similar critical thinking skills like taking advantage of a hot day, or moving the position of their lemonade stand to a busier road to boost sales. A little girl I know asked her mom—who happens to be a blogger—to let people on Facebook know about her lemonade stand. How interesting that an 8-year-old applied what she had observed about her mom’s business to boost her own.

There is also tremendous value in allowing children to experience the feeling of having earned something. By handing out trophies for just participating, we are robbing this generation of what Arthur Brooks calls “earned success.” It’s a feeling that cannot be bought or given. It must be earned and the sooner we allow young people to experience it, the better prepared they will be to live happy, rewarding lives and positively contribute to society.

And, human beings do seem wired for the desire to set goals and work toward them. Ask any child why she sets up a stand or offers to do chores for a fee and she’ll light-up about the prospect of making money. Most have a goal like a treat they’d like to buy for themselves and some even aim to give: 9-year-old Angel Reyes set up a lemonade stand to help pay for his grandfather’s cancer treatment. Certainly, we want to encourage this behavior, not shut it down.

And, how much better off is a child that earns something through her industry than by how hard she begs her parents. That’s certainly a habit worth cultivating now in the hopes that she continues practicing into adulthood.

The experience of a job well done and earning money should not be undervalued, and yet we’re regulating it away from the next generation of leaders and entrepreneurs. In the Vanishing American Adult, Ben Sasse writes that, in response to tweets about his 14-year-old daughter’s work on a cattle ranch, lawyers warned him that letting her do such work was likely violating labor laws. Shielding young people from work is not preparing them for life. It is doing them a disservice.

Employers lament that Millennials—who grew up with helicopter parents and received trophies for participating—are ill-prepared to real life. We shouldn’t be surprised when we’ve taken steps to impede their opportunities to engage in work.

And it’s not just the individuals in this generation that will suffer the repercussions of being unprepared to hit the ground running and inject dynamism into the economy. Recent studies have revealed that new business start-ups have been on decline in the U.S. over the past few decades: in fact, we’ve hit a 40-year low.

In an article for Inc. Magazine John Dearie of the Financial Services Forum, points out how we all suffer from today’s economic torpidity: “New businesses are disproportionately responsible for the innovation that drives productivity and economic growth, and they account for virtually all net new job creation.” Given the stakes, it’s critical that we do not restrict our littlest entrepreneurs from engaging in the market place and gaining entrepreneurial experience. Just like reading, writing and arithmetic, learning how to serve customers, boost profits and manage money are well suited to the developmental years.

License and permit requirements and some labor regulations shut down a process whereby the next generation of leaders and innovators are able to develop the skill set and the mindset thrive. This is unfair to the next generation, and we’ll all suffer the consequences of a generation unprepared for the “real world.”

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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