Tag: Seattle

Categories
Accountability ideological culture local leaders moral hazard nannyism national politics & policies responsibility too much government

Minimum Wage Laboratory

minimum wage, experiment, Seattle, scientific method, social engineering

Not every popular idea about government policy is good. Or bad. How do we tell the difference?

One way is evidence.

The modern administrative state was promoted heavily by social scientists who thought that piecemeal social engineering should be tested. A few even thought that the older experiment in limited-government federal republicanism gave Americans a near-ideal testing ground: “the laboratory of democracy.”*

Activists and politicians have been pushing big increases in the minimum wage in cities around the country. Seattle, Washington, has been one of those, establishing an $11.00/hour legal minimum in April of 2015, then raising that limit by two dollars in 2016. Now the results are in.

The City of Seattle commissioned a study of “the wage, employment, and hours effects of the first and second phase-in of the Seattle Minimum Wage Ordinance,” and it shows clear results:

  1. The first hike led to “modest reductions in unemployment” but scant change in over-all low-wage employment.
  2. The second hike led to a 9 percent reduction in hours worked at wages below $19/hour;
  3. a reduction of over $100 million per year in total payroll for low-wage jobs; and
  4. total payroll losses average about $125 per job per month.

Jonathan Meer, an economist teaching at Texas A&M University, calls this an “unmitigated disaster.” But he notices that a backlash against it was immediate.

To those who object: do you object to the method or the conclusions?

The only halfway plausible rationale for social engineering of this kind — top-down interventions into markets — has been “social science.” Rejecting evidence is to reject science, which is to reject . . . the minimum wage idea itself.

This is Common Sense. I’m Paul Jacob.

 

* The idea is to test policy tried in one location against its goals. What works should be mimicked, but only after the evidence is in and results accepted as good. And dropped in cases where not.

Printable PDF

 

Categories
crime and punishment free trade & free markets general freedom moral hazard nannyism too much government

Sin, Soda and Say

Seattle , soda tax, nanny state, tax, socialist, social engineering

Government policy in Seattle, Washington, is being driven by an outright socialist on the city council. The mayor, apparently starving for attention, proposed a goofy new sin tax last year.

Now, writes Reason’s Baylen Linnekin, “Seattle lawmakers are expected to vote early next week on a citywide soda tax that would add more than $2.50 to the cost of a twelve-pack of soda.”

The tax’s proponents’ rationale is too familiar: sugary sodas are bad for us, so we must be discouraged from drinking them.

Besides, politicians want to spend our money.

The problem, of course, is that the more successful they are at the first task, discouraging the ‘sin’ itself, the less revenue for them to throw at voters to prove their ‘caring’ nature . . . and buy votes.

But it is not as if those are the only competing factors involved. “The tax would undoubtedly drive consumers,” writes Linnekin, “to buy more groceries in the city’s suburbs.” Bellevue and Kirkland are nice towns. And nearby.

Arguing for a tax like this — as a social engineering mechanism — is not only crude, but flies in the face of the very best wisdom, that of Jean-Baptiste Say:

A tax can never be favorable to the public welfare, except by the good use that is made of its proceeds.

But elitist nannyism corrupts politicians, who make it their job to steer our consumption.* And they tend to be resistant to the “best scheme of finance,” which is, as J.-B. Say put it, “to spend as little as possible; and the best tax is always the lightest.”

If the tax goes in, Seattleites, drive to out-of-town Costco or Walmart.

Then drive your greedy nannies out of office.

This is Common Sense. I’m Paul Jacob.

 

* Considering the mayor’s push to include diet sodas in the sin tax, how competent at this are they? It’s the sugary drinks that are known killers, but the diet drinks are mainly imbibed by wealthier folks. The mayor wants to appease the socialist on the council, and pointedly not favor the “privileged.”

Printable PDF

 

Categories
free trade & free markets national politics & policies

Bypassing McDonald’s to Fly

When a professional academic economist and poverty specialist like Prof. Robert Plotnick defends a radically higher minimum wage law, as has been put in place in SeaTac, Washington, and was just enacted (with elaborate postponement/implementation periods) in Seattle, I raise an eyebrow. What am I missing?

But then I read what he actually said: “People aren’t going to stop flying out of Sea Tac [airport] because it costs a little more to buy a hamburger or a beer,” he says.

No. They won’t.

But that’s irrelevant. With prices higher for fast food, there’s certainly going to be no increase in fast food purchases. People will still go to the airport, but more often avoid the fast food joints, in SeaTac or Seattle.

And, over time, as businesses struggle with reduced revenue, or at least reduced profits, fewer of those businesses will survive. And folks with better qualifications — say, better language skills, better people skills, or a higher work ethic  — will move in to the forced higher-wage area (the $15/hour minimum in both Sea Tac and Seattle is the highest city rate in the nation) and will replace less skilled workers.

Increasing poverty, not decreasing it: stultifying progress, both personal and in general.

Already the horror stories are piling up: check out the stories in the Seattle Times. (See economist David Henderson’s discussion on EconLog.)

One of the problems was inadvertently suggested by our president, who recently intoned, “Let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty.”

Great. We’ll have fewer low-income workers working full time.

This is Common Sense. I’m Paul Jacob.

Categories
tax policy too much government

Value the Vote

What happens when politicians create a special new election date in order to place a tax increase before voters . . . when least expected?

Did I mention that, as the Seattle Times reported, Proposition 1 “enjoyed massive support among politicians, labor unions, environmentalists, social-equity groups and business coalitions”?

Or that the YES campaign outspent the NO side by $654,922 to a mere $7,700, a nearly 100 to 1 margin?

The answer: On Tuesday, voters in one of the most liberal counties in America said NO. A solid 55 percent rejected the ballot measure.

Proposition 1 would have hiked King County’s 9.5-cent sales tax by 0.1 percent and imposed a $60 annual car-tab fee. The idea was to provide more funding for mass transit and local roads, with 60 percent of that revenue going toward the area’s mass transit system.

Transit officials argued that without the additional dough they’d have to make deep service cuts.

“The voters are not rejecting Metro; they are rejecting this particular means of funding Metro,” explained County Executive Dow Constantine. “We know the people of King County love and value their transit service.”

Love? Perhaps. Ridership is reportedly at a near-record high, about 400,000 a day.

Value? Not so much.

This very “progressive” electorate expressed, with utmost clarity, their unwillingness to pay higher taxes for transit. Further, there’s an unmistakable signal in the refusal of King County Metro officials to consider raising the price of their beloved service to become sustainable.

Isn’t it only fair to ask those riding the bus to pay the fare?

This is Common Sense. I’m Paul Jacob.

Categories
tax policy too much government

Excise Excitement Exorcizes E-Biz

Retail sales taxation became vogue among the states of the union during the Great Depression. When other revenue sources dried up, many states decided to nab potential taxpayers at each transaction.

We’re in a depression again, and numerous legislatures are looking to expand their retail sales tax base by targeting out-of-state Internet purchases.

California has made the biggest stink about this, and its fight with Amazon.com has been in the headlines for some time. Though the issue has been put “on hold” for a year, the Assembly’s rapacity has produced at least one effect. It has driven many online businesses out of the state, and severely curtailed the online sales of many California brick-and-mortar concerns.

Take Shopobot, a new online business. One of this San Francisco company’s biggest revenue streams was Amazon. And Amazon dropped it like a hot rock.

So what did Shopobot do? It fled California for the cooler Seattle, Washington.

Why skip Oregon — which lacks a retail sales tax? My guess is that Oregon’s political environment struck the Shopobot folks as nearly as crazy as California’s, so heading further north made more sense, to sit beside Amazon itself, and across Lake Union from Adobe’s compound, er, “campus.”

The online sales tax question is widely perceived as a problem. The only solution, I guess, is to let Congress do its constitutional duty and “regulate interstate commerce.”

Amazon sure wants that.

But why am I not optimistic about a good solution?

This is Common Sense. I’m Paul Jacob.

Categories
initiative, referendum, and recall

Who Should Steer the Bus?

Metropolitan mass transit systems run buses and light rail trains. There’s not much evidence they do it well.

But boy, do they know how to spend money!

Now that the economy has hit the skids, tax revenues are down and metro boards across the country are hurting for money. King County, in Washington State, is no exception. The Metro system there has a multimillion dollar shortfall in funds, and the board threatens to cut services by 17 percent unless more revenue gets raised.

The Metro board suggests a tax hike — what they call a “congestion tax” — on cars.

Tim Eyman, the Evergreen State’s number one tax-hike watchdog, argues that the voters should get to decide whether to increase taxes to fund existing levels of bus service.

Great idea. Consent of the governed and all.

It’s amusing to read accounts of the debate over the proposed tax. Once again, we hear stories of bus after bus running without being anywhere near full.

If metro buses were my business, I’d want to make sure it ran in the black.

But with government, alas — relying on taxes for continuous bailout — that’s not even within the bounds of polite discussion.

And while it might make sense to run some buses on a fixed, reliable schedule, other buses could be supplied to commuters “as needed.” With modern technology this is eminently doable.

But first, let citizens decide how much money they really want to throw at the system.

This is Common Sense. I’m Paul Jacob.

Categories
general freedom

Something Fishy in Seattle

The organization known as PETA — People for the Ethical Treatment of Animals — routinely goes so overboard in its pronouncements as to cast their cause in the most goofy light.

Last week, PETA sent a public letter to the American Veterinary Medical Association urging the group to cancel an upcoming event at their Seattle convention. The event would feature the world-famous fishmongers of Pike Place Market, folks who throw fish.

Not live fish. Dead fish. Fish intended for eating. The practice of throwing seafood began as a way to increase efficiency. It’s fun to watch, and it’s grown into a ritual attraction.

PETA says it’s bad enough that fish are eaten, but throwing them “adds insult to injury.”

The fishmongers say they “love fish.” They “respect fish.” Fish make their business thrive.

But of course, the way a fishmonger respects fish is different from a member of PETA. In a television interview, one PETA spokesperson argued that we wouldn’t throw around dead kittens.

Well, no. But we might if kittens were part of our diets, instead of our homes and families.

There’s a big difference. It’s lost on PETA.

To most of us, demanding the hyper-respectful concern for the mortal remains of fish by those tasked with preparing those remains for our meals is, well, not a position on the moral high ground. It’s fishy.

This is Common Sense. I’m Paul Jacob.