Free Market

Colorado Follows Utah in Freeing the Market for Minors

The following op-ed was published by Fox Business last week.

The Colorado governor signed a bill into law this month that will allow children to operate a lemonade stand. without a permit. You didn’t know they needed a permit? Yes, before this law they did in the Centennial State; and in most states they still do.

This legislative victory is a good step forward — or backward, restoring common sense that has been lost amid the hyper-regulation modern society has embraced.

Last summer, Jennifer Knowles helped her young sons set up a lemonade stand on a hot day in Denver. Her children’s entrepreneurial endeavor was soon shut down for failure to obtain a $125 permit. This summer they can open up shop without any fear of being shut down.

When will other states follow suit? A summertime staple of American childhood shouldn’t be a criminal act. One should not need permission from the government to sell lemonade to one’s neighbors. Paying the fee to obtain the requisite permission slip merely perpetuates the problem.

Colorado joins Utah as the second state to address the issue. Two years ago, the Utah legislature passed a broad law that exempts minors from obtaining permits and licenses for their occasionally operated business. Libertas Institute, the state’s free market think tank, proposed the legislation after seeing stories of young entrepreneurs being hassled by busybody bureaucrats.

The new laws in Utah and Colorado cover not only lemonade stands, but every minor-operated business, such as mowing lawns, babysitting and more. Technically, these common teenage enterprises are similarly subject to business licensing laws, yet there is widespread noncompliance countrywide. That doesn’t change the fact, of course, that these children are actually in violation of the law.

These laws are what lead to absurd headlines such as “New York state shuts down child’s lemonade stand” and “Rhode Island police shut down kids’ lemonade stand, citing city ordinance concerning commercial vendors.” The Knowles family certainly isn’t alone; dozens of other stories have received national attention in recent years. Earlier this year, a young boy was busted in Missouri for the crime of shoveling someone’s snow without a permit.

The lemonade stand shutdowns are what catch people’s attention the most. In one such story, four-year-old Abigail Krutsinger was selling lemonade to passersby in her small city in Iowa in 2011. A cup ran 25 cents, and pretty soon she had made five dollars—not bad for a girl her age. Then the police arrived and shut her down.

The city demanded a staggering $400 to bring Abigail’s enterprise into compliance with the law. Her dad’s comment to reporters was prescient: “If the line is drawn to the point where a 4-year-old… can’t sell a couple glasses of lemonade for 25 cents, then I think the line has been drawn at the wrong spot.”

The default experience with youth entrepreneurship should not be violation of the law. Few children or their parents think about having to obtain a permission slip to do something as simple as selling treats on the sidewalk; it’s not a factor one typically thinks about when imagining up how to earn a few dollars on a Saturday afternoon. And yet, in the so-called land of the free, local governments demand their pound of flesh—whether it be that of an adult or a minor.

It doesn’t have to be this way—and we don’t need to be perpetually outraged by these never-ending stories. Whether at a state or city level, elected officials can put a stop to the madness by doing what Colorado and Utah have done—exempting minors from having to obtain a permit or license when occasionally operating a business.

Let’s be clear: we don’t see headlines of foodborne illness outbreaks arising from young entrepreneurs and their roadside offerings. There aren’t any problems with tainted lemonade contaminating the countryside. The only news coverage we see is the failure of little children to pay for a piece of paper from the bureaucracy.

We should question, then, why such hoops are necessary for little children looking to learn the basics of business. Let’s instead clear the obstacles that stand in their way, and allow them to experience American entrepreneurialism at its best—without first having to kiss the ring of local government.