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Illinois, Chicago treats small businesses like they're a problem

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Erika Harford, clinic assistant director for the Institute of Justice, penned a piece published in the Chicago Sun-Times that pointed to the phenomenon - in Illinois and specifically Chicago - where government in many cases treats its small businesses and entrepreneurs like criminals.

In Illinois a business owner can be charged with a felony for braiding hair or applying nail polish without a license. Unlicensed delivery of letters by bicycle in Chicago's Loop can land a messenger in jail. Chicago's food truck operators are required to install GPS devices, the costly equivalent of electronic ankle bracelets, so that the city can track their whereabouts. The Department of Business Affairs and Consumer Protection's Commissioner has the power to vest any Department employees or inspectors with full police powers, including the right to arrest, to enforce any business licensing provision.

These are only a few examples of how criminal penalties for business-licensing violations have proliferated in laws affecting low- and moderate-income occupations, which are typically set up as small businesses.

Everyone from Gov. Pat Quinn to Mayor Rahm Emanuel recognizes the vital contribution small businesses make to our communities, but it can be easy to underestimate how the layers of red tape can entangle entrepreneurs and make them feel unwelcome. Having these provisions on the books, regardless of how frequently they may be enforced, is a threat hanging over the heads of business owners, especially innovative new businesses with significant job-creating potential. The criminal penalties foster a presumption of guilt and a culture of intimidation in which business owners are afraid to stand up to erroneous or arbitrary applications of the law by regulators or inspectors.

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.