Proposals for Action: A Comparison of Emphasis (and Sanity)

By capitulating to progressive-union pressure, and despite disingenuous claims that no broad-based taxes were imposed, Ocean Staters will once again bear increased burdens to pay for new taxes and regulations, more spending, and more union giveaways. Lawmakers chose to appease, rather than resist, the progressives’ job-killing, big-spending agenda.

As the reality of the economic aftershocks that our nation is sure to experience in coming weeks, months, and years begins to dawn on people, those who deal in policy are beginning to think through how their own beliefs should lead them to respond.   The RI Center for Freedom & Prosperity, for one, today published “Rhode Island COVID-19 Crisis: Public Policy Solutions to Restore Financial Security,” which include:

  • Allowing alcoholic beverages to leave restaurants when sold with a food take-out order. (Already accomplished.)
  • Temporarily reducing Rhode Island’s minimum wage to the federal level of $7.25 per hour, with the state also increasing the Earned Income Tax Credit (EITC).
  • Temporarily extending the deadlines for businesses to remit collected sales taxes to the state.
  • Temporary suspension of the corporate minimum tax.
  • Repeal the ban on flavored vaping products.
  • Eliminate sales and hotel taxes on people who offer short-term rentals.
  • Temporarily suspending Internet Sales Taxes.
  • Remove insurance laws that discourage the sale of short-term health insurance plans.
  • Waive regulation to allow medical professionals licensed in other states to be licensed to practice or conduct tele-health services in Rhode Island.
  • Repeal Certificate of Need laws that restrict healthcare providers from acquiring advanced technologies.

From my perspective, the most deserving criticism of this list is that it’s too light-handed, but the intention is to nudge the state slightly toward acknowledging the chains it puts on our economy with some proposals that might actually be implemented.

Predictably, progressives have jumped on the proposal to temporarily reduce the minimum wage.  Also predictably, their (let’s call them) critiques have little by way of substance, but rather rely on expressions of outrage and insinuations about motives.  The idea that somebody might come to conservative conclusions about the minimum wage based on rational consideration of economics seems not to occur to them.  For that matter, the idea that business owners might not be money hoarders looking to exploit everybody they can seems never to occur to them.  And to take it even one step farther, the idea that workers might be responsible adults who can make the best decision possible in given circumstances without surrendering their value as human beings seems never to occur to them.

If our goal is, as it should be, to minimize the economic harm of COVID-19 — which will affect the disadvantaged most of all — then we’ll want to get as many people working as possible.  The Center’s proposal would limit the reduced rate to newly created or revived positions, so lowering the cost of each job would allow businesses to create more of them.  Managers could take a little bit more risk with hiring while rebuilding their sales and capital on a temporary basis.

From workers’ point of view, people aren’t tied to their jobs, and workers aren’t going to stay somewhere for long when the pay is below what they need or expect.  If it’s a choice between $7.25 per hour and $0, the former is preferable, and as business picks up and companies need more help, they’ll have to compete for workers.

The argument that minimum-wage reactionaries never seem inclined to make — but should make, if they’re sincere — is that workers are better off being forbidden from taking a job at lower pay, no matter what the job, and even if that is the best choice for them at that moment.  Another way to look at it is that workers are better off if businesses cannot hire anybody to do anything until the value of the work hits a certain threshold.

Meanwhile, the far-left progressive Political Co-op has issued its own prescription for dealing with COVID-19, and it is dominated by the word “free.”  Eight of the 10 items on the list are for “free” things, and the other for “free” money, including unemployment insurance paid at 100% of previous income, up to $75,000 per year.

As policy, these points could be debated, and as an emotional response to crisis, they’re certainly understandable.  The problem is there’s no mention of how the free stuff will be paid for.  Employers struggling to revive their businesses would not be able to add positions until they could cover newly enhanced benefits.  Landlords would not be able to collect the money they need to keep their properties.  And government would have to massively increase taxes (including in the form of unemployment insurance) to cover all of the free stuff, further limiting the ability of the state and country to recover.

It’s very easy to declare that everything should be free for everybody, but the experience of places like Venezuela is that socialism does to a country something even worse than COVID-19 has been doing.  To combine the two would be the fast track to universal misery.