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Panhandling Through an App

My first impulse is to recoil from the image of homeless people carrying bar codes so people can easily scan them to purchase their daily hit of good feeling:

A new social innovation project, called Greater Change, hands homeless people a QR code, similar to the kind issued for online tickets.

Passersby who wish to give money – but who may not have any change in their pocket – can scan the code using their smart phone, and make an online payment to the person.

The donation goes into an account which is managed by a case worker who ensures that the money is spent on agreed targets, such as saving for a rental deposit or a new passport.

The program also raises the specter of human-tracking, if the app grabs information about the location of each donation.

But these negative reactions probably miss the unique circumstances of the homeless, who are typically in their predicament because they have some problem that has moved beyond their control, be it addiction or mental illness.  Having donations go to some account that is allocated for purposes that will help them reduces the concern that they’ll use the money to feed their problems.  This is essentially a more flexible version of my practice of carrying around supermarket gift cards.

Of course, money is fungible, so whether it’s a gift card or a credit to a welfare account, nothing prevents the recipient from using that money to free up cash for the purchase of drugs, or whatever.  Still, incremental improvements remain improvements.

These cards would also help donors determine which panhandlers are truly needy.  Not long ago, I spotted a young guy who didn’t look especially destitute energetically soliciting funds on the street, and for some reason, I got the strong impression that he was just trying to raise enough money to buy something at the liquor store on the corner.  Such people wouldn’t have the donation cards.

To improve the program further, we should consider the extent to which government really needs to be involved.  I think, for example, of affiliate programs from banks and other organizations that have negotiated discounts for members.  Banks, for example, could have special accounts that come with these cards and restrict the use of the money.  Opening the process up in that way would help alleviate the human-tracking concern, too.

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A World in Which Only the Inexperienced Can Manage Big Programs

As we enter the thick of election season, Brian Riedl’s reminder on Vox should be firm in our minds:

… the democratic socialist agenda will face resistance not only from other lawmakers but from basic math. Their promises, which include free college, a single-payer health care system, guaranteed jobs, and more, would require astonishingly high expenditures that would cause the federal deficit to skyrocket. Once the costs become clear, most mainstream politicians and voters will surely balk. Making big promises is one thing; paying for them is another.

Riedl tallies $42.5 trillion (with a “t”) in new taxpayer spending over the first decade of the progressive program.  And, as Stephen Green further notes, “that’s before the ripple effects create the need for even more spending, which creates even more ripple effects, etc., until a once-wealthy country is ruined.”

Fortunately, if a conservative cabal were choosing the representatives of democratic socialism with an eye toward making it easy for the public to see the problem, they couldn’t have done better.  Bernie Sanders, for example, is an old rich guy whose wife’s questionable leadership of a Vermont college may have contributed to its closure.  Recent socialist upstart Alexandria Ocasio-Cortez has been a veritable gift to conservative meme-makers and humorists.  In Rhode Island, the standard bearer for the far left is Aaron Regunberg, an Ivy League transplant from another state who, as far as anybody knows, has never held a real job in his life.

Unfortunately, it’s a powerful ploy to promise people that the government can give them everything they need and want… and don’t worry, the people in control will always be on your cultural and ideological side.  Promise!  As for those who propose that we govern our society under the restrictions of reality, well, they’re demons, all of them.

Those of us demons in that reality-based camp have our work cut out for us.  The country’s education system has softened up a couple generations for the sort of mushy thinking that leads one to believe that politicians with dubious experience actually running things will be able to manage a number as big as $42,500,000,000,000, which is, like, a really big number.

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Dickinson Gets Attention, but Offers Little

By way of a follow-up to yesterday’s post about Spencer Dickinson’s play for some press coverage, I note that the Providence Journal did send a reporter outside its door to cover his press conference.  However, I can’t say the reported substance of his presentation is very encouraging:

“The topic is this: National rankings by respected financial publications. They’re bad. And year after year, they don’t get better. They probably discourage some good businesses from coming here. What would you do about it?

“We need a program to deal with it,” Dickinson said.

If Rhode Island wants better grades in the rankings, he said, someone needs to go consult the professors and figure out how to improve performance.

The thing is, Rhode Island politicians have already tried analyzing the the rankings, when the state Senate investigated “moving the needle,” and it didn’t fix anything.  Elected officials attempted to game the rankings, rather than unleash the economy, and they tweaked some tax rates while increasing overall taxation.

We don’t “need a program.”  We need a statement of principle and the willingness to pursue it, and that statement of principle needs to be that government should get out of the way.  Dickinson’s campaign Web site doesn’t provide any additional details about how he proposes to move the economic needle, but based on the issues that he does emphasize, his approach would be entirely wrong, amounting to more government in the way.

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Acknowledging the Beacon Our Ship of State Should Follow

My op-ed in the Providence Journal is ruffling some feathers around the state:

No one who seeks to captain our state’s ship seems capable or courageous enough to speak out about the destructive and unjust principles of the progressive agenda. Socialism inevitably leads to economic depression. And the confiscation of private property from some — in order for politicians to give it to their supporters — is inherently immoral. Openly violating one’s private space or property rights cannot possibly be the direction most Rhode Islanders want our government to steer towards.

Ironically, the way to avoid shipwreck is shining like a beacon in the night. Recent federal policies to reduce tax, trade and regulatory burdens, and to increase energy production, have led dramatically to prosperity. The second-quarter national gross domestic product increase of 4.1 percent is the latest in an impressive string of positive indicators, including historic lows in unemployment rates across many demographics, rising personal incomes, the return of manufacturing jobs once considered extinct, increasing labor participation rates and declining food stamps rolls.

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The Value of Restrictive Welfare

I agree with much of what Paul Winfree writes in the Washington Times related to Ontario’s abandoned experiment with a universal basic income, but he misses something essential:

There are some benefits to a basic income, especially when used to replace the current welfare system. For instance, a UBI leaves recipients free to decide how to spend their benefits. Many existing welfare programs use incentives, “nudges,” and other requirements to micromanage how the poor use their benefits. The assumption is that poor people lack certain virtues or fall victim to vices to which the rest of us are immune, and the expert managers of the welfare system know better.

I’m with the economist Lionel Robbins, who called this assumption, as applied to political calculations, “morally revolting.”

What Winfree misses is the value of restrictions on welfare to the recipients.   Sure, from an economic standpoint, leaving recipients free to use the cash however they want is more efficient for the economy, including the household economy of the recipient.  However, that efficiency reduces the disincentive to rely on the government, increasing the short-term value of welfare payments versus earned income.

If I tell you I’ll give you $100 for spending the day shoveling sewage in August, you might do it if you really need the money.  But if I also give you the option of doing nothing and collecting $50, you’ll evaluate the choice based on whether an extra $50 is worth the toil.

From the community’s point of view, the weighting is the opposite.  If we have $50 just lying around doing nothing for the economy, giving it to you may have some minor benefits by putting it in circulation.  But if you’re working, the community gets not only productive labor, but also the value of you becoming independent and better adapted to the economy.

Placing restrictions on the money we give you increases its value to the community while decreasing its value to you in a way that is relatively beneficial for the community.  This would be true even if the restrictions were entirely arbitrary, but if we manage to stumble into a worthy moral principle, it’s even more so.

Unfortunately, in our public debate, economists often lose sight of less-tangible values, while advocates ignore economics.

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The Best Worker Leverage Is a Strong Economy

And here comes the news that workers’ pay is on the rise; from the Wall Street Journal:

U.S. workers received their biggest pay increases in nearly a decade over the 12 months through June, a sign the strong labor market is boosting wages as employers compete for scarcer workers.

The Labor Department’s employment-cost index rose 2.8% in the year to June compared, the government said Tuesday. Wages and salaries, which account for about 70% of all employment costs, also rose 2.8% from a year earlier, the strongest gain for both measures since September 2008.

Since the end of the most recent recession, U.S. unemployment has fallen to 4% in June from nearly 10% nine years earlier. Wage growth, stubbornly sluggish for years following the 2007-2009 downturn, has picked up as the labor market has tightened and employers have raised pay to attract and retain workers.

The government can increase minimum wages and spend taxpayer dollars on training programs and the like, but such strategies don’t address underlying causes, so they have consequences.  Job training makes more workers qualified for better jobs, but even if the training is in perfect alignment with the needs of employers, it just gives employers more options, which will suppress wages.  Minimum wages stand between employers and employees who are willing to agree to a lower wage and suppresses jobs.

A strong economy, with a free market allowing plenty of room for exploration, gives employees leverage.  The employer’s incentive to hire comes from the ability to make a profit, so employees can negotiate for more of the rewards of responding to that incentive.

This lesson applies even in less-robust times, in that the economy is almost always strong in some sector.  If prices (including wages) are permitted to work, the strong sectors will draw workers to them, increasing workers’ leverage in every sector and increasing the wealth of the overall society.

Why do we find this so difficult to understand?

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The Economic Instability of Too Much Government

I almost added this quotation from a recent Hummel Report to my post Saturday about Hodges Badge’s pulling manufacturing from Rhode Island:

A plan to redevelop a section of the city from Providence Place mall to Olneyville along the Woonasquatucket River has run into a riptide of opposition from business owners who see it as a stealth attempt to seize their properties.“This is an industrial area,” said Lemus, who came to Rhode Island from El Salvador in 1980 at age 11. “They call it blight, but we call it an industrial area. They want to make it mixed-use, residential; they want to have people walking, bicycling the street. But it wasn’t designed for that, it was designed to conduct business.”

Lemus said he and his brother spent four years making improvements to their property after they bought it — with no taxpayer help. “There is no tax stabilization, no tax breaks, there’s no money pulled out from any place in the city. We don’t owe anybody anything.”

This is a toxic combination for businesses:  the sense that others are getting special deals and the knowledge that state and local governments can come in at any time, following a questionable process, and change the rules around everything in which you’ve invested your life.  In those circumstances, fewer people will take risks and work to build dreams in Rhode Island, either because they’ll go elsewhere or simply conclude that they’re better off going along to get along.

In settling on the ideal economy, there is a balance to be struck between individual freedom and government-supported predictability, but too much government brings its own instability as somebody other than the invested individuals makes decisions according to their own ideology or interests.

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Truck Tolls: *Sigh* No, Peter and Gene, We Cannot Conclude that Truck Drivers Support Them

Every Thursday morning, as you probably know, WPRO’s Gene Valicenti hosts RIDOT Director Peter Alviti on the WPRO Morning News for a half hour plus segment. (Yeah, I know, I find it annoying, too.) Alviti takes questions from callers and spends a significant amount of air time promoting Governor Gina Raimondo’s wasteful, unnecessary, highly damaging RhodeWorks toll scheme.

On July 19, Alviti ratcheted it up a notch by involving his host.

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Conservative Policies Produce Rapid Economic Growth

For eight years, progressive-left politicians have told us that the ‘new normal’ for economic growth would be limited to the 2% range. And for years, our Center and other free-market advocates argued that major tax and regulatory reductions would reverse this course and lead to rapid economic growth, meaning more money and prosperity for families. After this week’s 4.1% GDP growth report, there can no longer be any doubt that we were right.

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Take Hodges Badge Departure as Another Warning Sign

As Democrat Governor Gina Raimondo spins Rhode Island’s economic numbers and the news media touts her “wooing” of blockchain companies, an article  from the Newport Daily News a couple of weeks ago hasn’t gotten much attention:

Hodges Badge Co. Inc. has made the “difficult decision” to close its Portsmouth plant this November and consolidate production at its Washington, Missouri, facility, according to a company statement.

“Hodges Badge Company Inc. is a 98-year-old family-owned company and we consider each one of our employees as part of our extended family,” according to the statement attributed to Rick Hodges, the company president and CEO. “We greatly appreciate being part of the Portsmouth community and are truly grateful to all the employees who contributed to our success over the past several decades. This is a necessary and critical economic decision that we do not take lightly, and we will be working with each of our employees to provide compensation packages and on-site outplacement services.”

The facility in Portsmouth opened in 1974 and employs around 92 people.  Rhode Island just won’t allow the company to justify keeping those jobs here.

To be sure, that’s not only a tax and regulation issue.  For Hodges Badge, energy played a big role, too:

Despite other business reforms aimed at reducing electricity costs, the plant still consumed 451,000 kilowatts of power for all of 2008 at a cost of $91,000, according to a Daily News article in July 2009. That was twice as much as the company paid to power its Missouri plant.

“I live here and I love it here, but how long can you realistically sustain that?” Rick Hodges said at that time.

Imagine how the current political landscape looks from that perspective.  The governor is touting more crony wind deals; NIMBYism is hindering an effort to increase power production in the state; and schemes to make energy more expensive through carbon taxing are a regular feature of every legislative session and may explode into law any year.

Rick Hodges was vocally against the toll on the Sakonnet River Bridge, and it can’t have been lost on him that tolls are proliferating in the state and could return at any time.  Add in the recent mandatory-sick-leave law and the push for extremely radical “equal pay” legislation.  At some point, business owners must tire of always feeling vulnerable.  Any given legislative session could be the end of their operations for some money grab or progressive identity politics impulse.

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Only One Reason Rhode Island Can’t Lead the Nation Economically

Even if I didn’t work for the RI Center for Freedom & Prosperity, I’d suggest that the organization shouldn’t be alone in this call

“For eight years, progressive-left politicians have told us that the ‘new normal’ for economic growth would be limited to the 2% range,” said Mike Stenhouse, the Center’s CEO. “And for years, our Center and other free-market advocates argued that major tax and regulatory reductions would reverse this course and lead to rapid economic growth; meaning more money and prosperity for families. After today’s 4.1% GDP growth report, there can no longer be any doubt that we were right.”

The Center has repeatedly challenged state lawmakers to #WalkAway from the leftist polices that have kept our Ocean State in the bottom-six on many broad national indexes, including the CNBC business climate, the Family Prosperity Index, and the Jobs & Opportunity Index.

Over the past 18 months, the optimism and growth resulting from the implementation of pro-business and conservative policies at the federal level stand in stark contrast to the stagnation we experienced from liberal and progressive policies: Unemployment rates among virtually all demographic groups are at or near all time lows; personal incomes are rising; and manufacturing jobs that the the left told us were extinct are roaring back by the hundreds of thousands.

We can amplify these results in Rhode Island if we adopt similar polices. However, the Center is concerned that no gubernatorial candidate is providing the bold vision and leadership to achieve this goal. Instead, some candidates offer timid prescriptions, while others seek to take our state backward with failed progressive-socialist schemes.

The Center also challenges voters to demand that candidates clearly articulate their core philosophies: “Are they in favor of rowing our state’s boat with the successful national tide … or against it? Are they for more freedom & unbounded opportunity for prosperity … or are they for more government-control and limited expectations,” suggested Stenhouse.

There is absolutely no reason Rhode Island couldn’t be at the lead of the nation in both rankings and results.  No reason, that is, other than our willingness to let political insiders and left-wing ideologues force absurd destructive policies on our state’s economy, which is to say on our own livelihoods.

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Next/Last Round of Toll Gantries: Raimondo Administration Solicits Public Comment on an UNFINISHED Environmental Assessment

A couple of weeks ago, Governor Gina Raimondo’s Department of Transportation announced the locations of the balance of ten toll gantries and released an Environmental Assessment [PDF] of them. They also announced that hearings to take questions and comments on the E.A. would occur in three locations on July 27 – tonight, as a matter of fact.

Yes, that’s right, RIDOT is holding public hearings on a very significant project on a summer Friday evening. Quite similar in spirit, as a matter of fact, to the scheduling and location of the hearing for the first Environmental Assessment – in that case, two days before Thanksgiving hard by a cow pasture in South County so remote, the cows themselves need GPS to get there.

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The Mysteries of Public Financing

Having reviewed dozens of public financing deals, I have a hard time believing that there isn’t some catch to this arrange:

Samuel Bradner, one of the principles of the East Providence-based Peregrine Group, which is developing the project, said the tax break, known as tax-increment financing, was needed to close a gap in financing for the $28.3 million project.

Gov. Gina M. Raimondo, who chairs the Commerce board, said the project would pose no risk to the taxpayers.

Commerce Secretary Stefan Pryor explained that the developers would receive the $3.5 million over 10 years only after they had paid taxes each year. If the project is a bust and never pays taxes, the state doesn’t give the developers any money, Pryor said.

What Paul Edward Parker’s Providence Journal article gives one to understand is that the state returns taxes to the business only after having collected it and that this circular transaction somehow makes the developer a better investment for its debt.  How does that work?  The only obvious way this makes a difference is if the amount of tax creates such a margin that a too-risky project becomes palatable for lenders.  Put differently, the amount of taxation would be what makes Rhode Island businesses a bad investment.

If that’s the case, Rhode Islanders have yet another indication of how much healthier our state’s economy could be without so burdensome a tax and regulatory regime.

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Maybe the U.S. Isn’t Doing So Badly

Noting that populists on the Left and the Right tend to emphasize an unequal distribution of economic growth over the last half-century or so, James Pethokoukis reminds us that we should have a healthy suspicion of the numbers that get us to that conclusion:

A University of Chicago poll of top economists found that 70 percent agreed with the proposition that the Census Bureau’s conclusion “substantially understates how much better off people in the median American household are now economically, compared with 35 years ago.” The economist Martin Feldstein, for instance, argues that the agency fails to take into account shrinking household size, the rise in government-benefit transfers, and changes in tax policy. It also measures inflation in a way many experts think overstates the actual rise in living costs.

Depending how many of the adjustments one is willing to make, incomes for the population at large and for broad income categories, as well, have gone up by multiples of the rate that we often hear.  Since the ’70s, middle-income families have seen an increase of 42%, and the lowest-income group has seen an increase of 70%.  To the extent the middle class is shrinking, writes Pethokoukis, it’s because they’re moving up.

Even that doesn’t account for economic mobility and, as Pethokoukis highlights, the real improvements in everybody’s lives:

The idea that most Americans are worse off than they were in the 1970s seems intuitively nonsensical to those of us who were living back then. As former Obama economic adviser Jason Furman once put it: “ignore the statistics for a second and use your common sense. Remember when even upper-middle-class families worried about staying on a long distance call for too long?

When I went to college, I created real financial hardship for myself calling a girlfriend back home, and I brought with me a 20-inch black-and-white TV that picked up a handful of stations and was connected to a junkie VHS player.  To be sure, the TV was kind of antiquated technology by that point, but not laughably so.

What would be the parallel for a similarly situated student these days?  Only a seven-inch generic Android tablet, maybe — connected to the campus’s free WiFi, and with a Netflix subscription, providing the student with unimaginable entertainment and information options?

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The Ride-Sharing Plot Thickens, with Scooters

Sometimes the economic lessons come in real time.  Just this morning, I posted on a new government-subsidized bicycle-sharing in Providence, and while sifting through my news feed shortly after hitting “Publish,” this story appeared on my screen:

Three New England cities are figuring out how to respond after a California company left dozens of electric rental scooters on public sidewalks without warning.

The scooters appeared Friday morning in Providence, Rhode Island, and the Massachusetts cities of Cambridge and Somerville.

The company is Bird Rides, and according to the Providence Journal, more than 50 of the scooters have been spotted around Rhode Island’s capital.  Not being subsidized by government (at least not in Providence), Bird scooters are more expensive than the JUMP bikes to which the city just gave its blessing.  Whereas the JUMP bikes are $2 per half hour, with discounts for bulk purchases and low-income, the Bird scooters are $1 plus $0.15 for every minute of use, which would be $5.50 for that half-hour ride.

On the other hand, while JUMP appears to be a destroyer of gig-economy jobs, Bird creates opportunities for people to make money:

Kristin Gaudreau said she also plans on becoming a charger, taking the scooters home at night to recharge the batteries earning up to $100 a night.

According to the company’s Web site, that task entails going out and collecting the scooters, charging them, and then leaving them where they might be in the most demand the next morning.  Bird also pledges to pay host cities $1 per day per scooter as “revenue sharing.”  The arrangement for JUMP isn’t as clear, although the company is advertising an operations manager position open in Providence, which may entail some of the same tasks in a less disaggregated way.

The City of Providence is currently “in talks” with Bird. We’ll see if $1 per scooter is sufficient palm greasing for city hall or if it uses its power to eliminate competition to its own, subsidized offering.

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Taxpayers “Share” Their Bicycles in Providence

The mayor’s office tells The Current that a $400,000 TIGER grant of federal taxpayer money from the Rhode Island Department of Transportation enabled Providence’s new bike sharing program:

JUMP, which is owned by the ride sharing company Uber, has bike-share programs in six other U.S. cities. The City of Providence, along with Lifespan, Tufts Health Plan and the Rhode Island Public Transit Authority, sponsored JUMP’s Providence launch. …

Four hundred JUMP bikes will be available throughout the city in August, said Victor Morente, spokesman for Mayor Elorza’s office. Riders will be able to park and pick up bikes at 46 stations as well as at public bike racks. …

Bikes will be available for rent at $2 for every 30 minutes of riding. Memberships will also be available for $20 per month for 60 minutes of ride time a day. JUMP will offer reduced-cost memberships to people with low incomes.

As always, with such programs, the first question is why some entrepreneur didn’t find it worth the $1,000-per-bike investment to get this project off the ground.  The answer may be that, even at the highest price point ($4 per hour), every single bike will have to be ridden for more than 31 hours to pay for itself, and that’s if we assume no maintenance or replacement costs.  Moreover, the business model must require that some percentage of the bikes not be used at any given time, or else nobody would be willing to rely on their availability.

In short, the use of other people’s money (taxpayers) was probably the only way to overcome doubts about the demonstrated demand.  When the local Walmart will sell an adult bike for $100, most people who want them can find them.  With the subsidy, most of each sale can be profit for as long as the bikes last.

Those profits come at somebody else’s expense.  In San Francisco (with its better, more-predictable weather), JUMP bikes are cannibalizing Uber business.  The company claims to be happy about the exchange, but each lost Uber ride is a driver with no customer.  The subsidy could also block other innovations; an entrepreneur who was working on an app to allow people to share their own bikes (i.e., without the huge up-front investment for any one company) now has to compete with more-expensive, pedal-assisted bikes.

In the effort to make us behave as government wants us to be have, however, sacrificing the livelihoods and opportunities of a few unseen people is a small price to pay.

ADDENDUM (10:13 a.m., 7/21/18):

By the way, anybody who’s still having difficulty understanding how government involvement in the market produces income inequality should consider this to be an example.  The bicycles used for this offering are constructed in a largely automated process (presumably) and “shared” through an app that requires minimal human involvement, so customers’ money is flowing to the top of the income ladder, probably in distant states or countries.  Meanwhile, local Uber and taxi drivers lose customers, as do any small bike-rental shops or other actual Rhode Islanders who might offer some service that this tramples.

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Another Repetitive Verse on the Minimum Wage

This study would be more interesting if its findings weren’t so predictable:

Beginning in 2014, the state of Minnesota began a series of minimum wage increases. By contrast, Wisconsin increased its state minimum wage in 2010 to keep pace with the federal minimum wage, but has not increased it since. While the effects of minimum wages changes remains a controversial topic, comparing relative outcomes in Wisconsin and Minnesota suggests that the minimum wage increases led to employment losses in Minnesota, particularly in the restaurant industry and youth demographic most affected by the changes.

Over 60% of employees in the restaurant industry in Minnesota work for the minimum wage or less, and workers under the age of 24 account for 54% of minimum wage earners. Following the minimum wage increases limited service restaurant employment fell by 4% in Minnesota relative to Wisconsin. Further, youth employment fell by 9% in Minnesota following the minimum wage increases, while it increased by 10.6% in Wisconsin over the same time period.

By the appearances of the study, it looks like, in addition to decreasing employment, Minnesota restaurants raised prices on customers.

Yes, the results do appear to present the upside of higher earnings for those workers who keep their jobs.  Among fast food restaurants, for example, average annual salaries increased 5.5% in Minnesota.

This outcome merits more exploration, though.  The higher pay could simply be compensation for longer hours or a change in the role (more management of automation, for example).  We also don’t know what we might find if we looked at individual people; somebody who would have otherwise sought a more lucrative career might have lost motivation with the slightly higher pay, producing a short-term gain but long-term loss.

Of course, as is too often the case, we can only trace these market distortions by one or two ripples.  One speculative positive is that people at the next employment tier will see increases to maintain the relative distance, but part of the mechanism to produce that effect could be that the incentive has decreased for people at lower tiers to move up, thus decreasing the competition for the higher-tier jobs.  In other words, the average manager might be making more money, but only because fewer people are pursuing those jobs, even though they’d have been better off getting the promotion than the minimum wage increase.

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Helpfully Missing an Economic Boom

One can’t help but wonder whether findings like this would be much more pervasively proclaimed among mainstream news sources if the president were of the other political party:

Trump, it turns out, has been the most consequential president in history when it comes to minority employment. In June, for instance, the unemployment rate for Hispanics and Latinos 16 years and older fell to 4.6%, its lowest level ever, from 4.9% in May. The previous all-time low was 4.8%.

African-American unemployment bounced up from its all-time low of 5.9% in May to 6.5% in June. But that 6.5% still represents the second-lowest unemployment reading ever for Black Americans.

The editorial writers for Investors Business Daily who wrote those paragraphs also suggest that increasing prosperity might indicate a change in voting habits.  And that kinda makes one wonder something else.

If a thriving economy from a regimen of tax cuts and regulatory reform can shift the political winds, the party that these trends would disfavor have incentive to keep the economy from thriving… at least in circumstances for which it can’t take credit.  Indeed, the ideal circumstance (if it works) would be for everybody to have a feeling that their fortunes depend on government — specifically, government with a particular political party in power.  So, corporate types feel as if officials’ helping hands are critical to their success, and low-end workers feel as if meddling laws prevent their devastation, and everybody in between has some reason to feel bought off.

Unfortunately (or fortunately, depending on your perspective), that approach doesn’t work.  The incentives are all wrong, and the system can’t self correct.

In the meantime, Rhode Island isn’t fully benefiting from the national upswing, which has the helpful consequence that people in Rhode Island remain more susceptible to the false narrative of the ruling party.

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Incentive for a Disability

News of a former employee of the Rhode Island House Minority office who has filed a disability discrimination lawsuit claiming that Minority Leader (and gubernatorial candidate) Patricia Morgan discriminated against her raises a topic to which our society has perhaps not devoted sufficient debate:

Masciarelli says in her complaint that she suffers from depression, and she alleges Morgan told multiple people she needed to be fired before she was covered under the Americans with Disabilities Act.

Morgan says Masciarelli was fired due to her poor work ethic and she never knew of the woman’s disability. Morgan says she was cleared by the state Commission for Human Rights.

If emotional conditions are going to start carrying the same protections as physical conditions, we’re entering a legal thicket.  When a disability is physical, one can more-easily differentiate between employment decisions that have directly to do with an ability to accomplish necessary tasks and discrimination.  With emotional conditions, where does a “poor work ethic” end and a protected disability begin?

Indeed, the availability of such protections creates incentive for employees to seek diagnoses, and because psychology is more subjective than physicality, fraud would be more difficult to prove.  Even without bringing fraud into the picture, though, doesn’t anything that creates incentive to have a mental health problem make it less likely that the person will overcome it?

How long, one wonders, until people begin to claim that the stresses of their jobs created the hazardous (i.e., stressful) condition circumstances that led to emotional disabilities?

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How About a No-Poach Agreement with Government on Private Decisions

Here’s another example of people who have a certain philosophy seeing government as a sort of universal corporate board or universal labor union:

Massachusetts Attorney General Maura Healey is leading a coalition of Democratic state attorneys general seeking information about “no-poach” agreements meant to block employees from leaving one fast food franchise to work for another franchise in the same chain.

Healey says Monday the agreements limit the ability of low-wage workers to seek promotions and earn a better living.

The attorneys general say 80 percent of fast food franchisors have no-poach agreements.

Franchises make agreements with their lead corporations for a host of reasons, from marketing to supply purchases to business operations.  They’re simply a step removed from a more-straightforward corporate structure, in which the executives would be able to set policy for when and how employees can transfer from branch to branch.

The key point — that which makes this not a matter of corporate giants versus the little-guy employees — is that these are all ways of making decisions and balancing interests.  The big-government view breaks everything into power, rather than relationships of shared interest, and posits elected officials and bureaucrats as overseers balancing interests.

A shared-interest perspective reveals this to be oversimplified to the point of falsehood.  Good employees are valuable to corporations, which won’t impose burdensome restrictions on them.  A great register operator who wants to move up into management can always move out… to a similar company, so the chain doesn’t have incentive to shackle him or her to the front counter rather than share within the brand.

But that interest has to be balanced against other considerations, like the trust of franchisees that the corporation won’t set them up to fail in competition with each other for customers and employees.  Government isn’t in a position to (or very good at) making these decisions for people, and should stay out of them in the absence of truly egregious abuses.

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​National Trucking Unloads on Rhode Island’s Truck-Only Tolls

This afternoon, the American Trucking Associations filed suit against Gina Raimondo’s RhodeWorks truck-only toll scheme, stating that it violates the Commerce Clause, citing its discriminatory nature and challenging its constitutionality. (View the lawsuit here.) Tune in now to 630 WPRO now, by the way, to hear the famous Mike Collins talking to John Loughlin (filling in for Dan Yorke) about the lawsuit.

The national truckers are not messing around: they are represented by ​Mayer ​Brown, the fifteenth largest law firm in the United States. Heavy artillery has been cut loose on a highly destructive, unnecessary new revenue program. On a certain, visceral level, that’s a beautiful thing and one wishes that this would happen with far more bad government programs.

Unfortunately, a highly likely outcome of the case will be an order to the State of Rhode Island to either desist tolling trucks or make it non-discriminatory by spreading the cancer to all vehicles including cars. Yet not one but two studies confirmed that tolls of any kind are not needed to repair Rhode Island’s bridges.

There have been many unanswered questions swirling around Gina Raimondo’s highly dubious, highly destructive toll plan.

Why was Governor Raimondo only capable of coming up with a cutting-edge, outside-of-the-box program that is destructive and burdensome rather than positive and propitious?

How did RIDOT get the truck counts and diversion rate, a critical basis for restricting tolls to only certain classes of vehicles, so wrong?

How did RhodeWorks tolls explode from $400M (per Governor Gina Raimondo in August of 2016 at Minute 15:00) to a completely open-ended, multi-billion dollar revenue stream?

Did Gina Raimondo, Nicholas Mattiello and Theresa Paiva-Weed truly believe that tolling trucks only, something that no other state does – a “unique approach” as RIDOT itself admits – was going to pass a legal challenge?

But the biggest question: if the lawsuit goes sideways and RhodeWorks tolls are ruled unconstitutional, will Nicholas Mattiello, Gina Raimondo and all Rhode Island legislators stand by their promise that tolls will never go on cars and scrap the RhodeWorks tolls?

[Monique has been volunteer spokesperson for StopTollsRI.com since tolls were first proposed three+ years ago and began working for the Rhode Island Trucking Association as a staff member in September of last year.]

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Maybe RI Regulators Will Listen to the Military

It amazes me that relaxing occupational licensing regulations even for military families is too much for special interests to accept, but Rhode Island should really take this news into consideration during next year’s legislative session:

U.S. Air Force Secretary Heather Wilson said the presence of state laws on reciprocity of professional licenses for military families would now be a consideration when evaluating future basing and mission decisions in the Army, Navy and Air Force.

And that’s not all:

The statement — in a keynote address to the Western Governors Association meeting in Rapid City last month —came four months after Wilson, Secretary of the Navy Richard Spencer and Secretary of the Army Mark Esper sent a letter to the National Governors Association in February encouraging states to consider licensure reciprocity legislation while noting that the quality of local schools near a base would also be a new factor considered in future basing and mission decisions.

Imagine that… the U.S. military is concerned that its employees families have access to good schools and economic opportunity.  Rhode Island is fortunate, indeed, that private companies and individuals don’t have the same standards.

ADDENDUM (3:10 p.m., 7/10/18):
For those who can’t tell, that last sentence is sarcastic.

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