Designed to Exclude

Americans used to be free to practice interior design work and succeed or fail based solely on their skills. But, to the detriment of consumers and would-be entrepreneurs, that is changing. The American Society of Interior Designers, an industry trade group, would like state governments to define what it means to be an interior designer and then dictate who may perform that work. The group and its allies have successfully lobbied 22 states and the District of Columbia to impose stringent education and training requirements that create a single route to practicing interior design or to using titles associated with interior design work.

Drawing upon national census data, this report finds that interior design regulations not only create serious barriers to entry for entrepreneurs, but also raise costs for consumers.

We find evidence that in states where interior designers are regulated, consumers are paying higher prices for design services, fewer entrepreneurs are able to enter the market, and blacks, Hispanics and those wishing to switch careers later in life are being disproportionately excluded from the field.

Specific findings include:

• Interior design firms in regulated states earn significantly more than those in unregulated states—about $7.2 million in a city with a population of one million. That means higher prices for consumers, as lower-cost competition is simply outlawed by the licensing regulations.
• In regulated states, the number of interior designers fell by an estimated 1,300 between 1990 and 2000, demonstrating that regulation is limiting economic opportunity in interior design.
• Black and Hispanic interior designers are nearly 30 percent less likely to have college degrees than white designers. Thus, regulations with academic requirements disproportionately shut minorities out of the field.
• Similarly, older interior designers are 12 percent less likely to have college degrees in regulated states, indicating that these regulations keep out those who switch to an interior design career later in life.