Chicago needs more than small gestures for small business

This week, Chicago Mayor Rahm Emanuel’s office issued a press release boasting of steps the city has taken to make it easier and faster for small businesses to get city licenses. According to the statement, visitors to the city’s Small Business Center can now take advantage of an express lane, a self-service station and additional “customer service”...

This week, Chicago Mayor Rahm Emanuel’s office issued a press release boasting of steps the city has taken to make it easier and faster for small businesses to get city licenses. According to the statement, visitors to the city’s Small Business Center can now take advantage of an express lane, a self-service station and additional “customer service” to get them in and out more quickly.

And apparently, the mayor is quite proud of a poster announcing the Small Business Center’s aspiration to be knowledgeable, resourceful, fair, efficient, respectful and courteous.

That sounds fine, but the mayor shouldn’t be congratulating himself for making Chicago business-friendly just yet. The reality is, Chicago is still extraordinarily inhospitable to entrepreneurs – and fixing that problem will require more than motivational posters and marginal reductions in bureaucratic inefficiency. It will require major changes in policy – and it will require the city government to say no to special-interest groups that have pushed for laws that enrich themselves at everyone else’s expense.

Consider, for example, Chicago’s sign ordinance. In Chicago, to even stencil your business’s name on a door, you must get the city’s advance approval, hire a city-licensed “sign erector,” and pay hundreds of dollars in fees. And if your alderman doesn’t like your business or what your sign says, forget the “express lane” – your approval could be held up for years.

Consider also the city’s treatment of food trucks. Last year, Emanuel pushed through an ordinance that supposedly increased food-truck freedom – but actually imposed anticompetitive restrictions, including a rule that prohibits food trucks from serving customers within 200 feet of a restaurant. That 200-foot rule effectively bans food trucks in almost all of the Loop – i.e., where most of the trucks’ would-be customers are. And in the year since the ordinance took effect, only a few trucks have successfully navigated the bureaucratic licensing maze the city has put in their way. The city is now defending the ordinance in a lawsuit brought by the Institute for Justice – and city lawyers are arguing expressly (and wrongly) that the city can use its power to protect established restaurants from competition. Meanwhile, Emanuel has the nerve to go on a Food Network reality show and pretend to be a champion of food trucks.

The Chicago City Council passed another ordinance last year that purportedly legalized outdoor produce stands – but actually confines produce vendors to a few approved locations and bans them everywhere else. The ordinance requires vendors to spend much of their time in “food deserts,” which conveniently keeps them away from supermarkets that wouldn’t appreciate the competition.

Then there’s Chicago’s treatment of Uber. When the popular cab-hailing service came to town, city bureaucrats quickly proposed regulations to ban it – to the benefit of politically connected taxicab companies, and the harm of the thousands of consumers who love Uber and the hundreds of drivers who use it to earn their living.

These are just a few examples of how the city abuses its power to stifle entrepreneurship. The Institute for Justice Clinic on Entrepreneurship at the University of Chicago provides many more in this 42-page report.

Emanuel shouldn’t be bragging about his small-business record; he should be ashamed. If he were serious about encouraging entrepreneurship, he would urge the city council to repeal burdensome laws and regulations instead of passing new ones and to resist special interests instead of kowtowing to them.

Until that happens, Chicago will retain the unfriendly business reputation it has earned through business as usual at city hall.