CA left’s absurd new dogma: Regulations have no downside

CA left’s absurd new dogma: Regulations have no downside

regulationsBusinesses like to make money. Smart business owners are happy to change their ways in search of how to increase or maximize profits. The hostility to change that one sees in a bureaucracy with no vested interest in making things work better or more efficiently doesn’t exist in a well-run private sector company that wants to thrive.

This basic motivation is what let Harvard economist Robert Stavins — a supporter of AB 32 — to warn six years ago of the folly of AB 32 supporters depicting it as a job-creation program with almost no downside. If requiring California’s businesses to switch to cleaner but costlier energy would help their bottom line, of course they’d be for it, Stavins noted.

He’s not just another mouthy academic. He’s arguably the world’s leading environmental economist.

Minimum-wage hike? It’s all good!

Now, on the minimum wage, we are seeing the exact same phenomenon from the California left. Instead of essays that say raising the minimum wage is overall a good thing — even though it will hurt some companies and some niche fields by making them less competitive with rival companies that don’t have the same pay edicts — we’re seeing argument after argument that raising the minimum wage is a no-brainer with no downside. Take it away, San Francisco Chronicle:

Raising the minimum wage — at least in Oakland — would have widespread positive impacts, economic and otherwise, and almost no downside, according to a UC Berkeley report scheduled to be released Friday.

The findings generally hold true for other Bay Area cities considering minimum wage hikes, including San Francisco, Berkeley, Richmond and Concord, researchers said.

“Raising the minimum wage puts more money in the pockets of consumers, and they’ll tend to spend it locally, which is good for the local economy,” said Ken Jacobs, chair of the UC Berkeley Center for Labor Research and Education, which conducted the study. “What you don’t see with minimum wage increases is a negative impact on employment or the economy.”

In Oakland, raising the minimum hourly wage to $12.25 — a measure expected to appear on the Nov. 4 ballot — would boost the paychecks of up to 48,000 people by at least $115 million, according to the study.

That translates to fewer people dependent on taxpayer-subsidized social programs, lower worker turnover, higher worker performance and more money spent at local businesses, Jacobs said.

No media push-back against extreme claims

occams_razor_small_posterI know all sides of the political spectrum argue fervently for causes whether or not they have the facts on their side. But it really does seem to me in the Obama era that the left is pushing this tactic to an extreme, and that the media don’t respond with the vigor they should.

Remember, Stavins is one of the most respected economists in the world. His Occam’s razor, cut-to-the-chase point about the folly of asserting that regulations help business has never appeared in any California news story about AB 32 of which I’m aware. Instead, it has appeared on The Wall Street Journal’s opinion page and in what I’ve written for the Union-Tribune, Cal Watchdog and other outlets.

Why? I don’t know. But the idea that it’s 2014 and the claim from a “labor center” that regulation boosts the economy goes unchallenged in major newspapers like the S.F. Chronicle is pretty stunning.

And depressing.


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  1. Ted
    Ted "Eddy Baby" Steele, Associate Prof. 29 June, 2014, 17:01


    Oh Chris what nonsense. As far as economists go–I’ll go with John Galbraith any day over Stavins—raising the min wage is good for the econ and families—

    but PLEASE keep the Faux News talking points coming!

    Reply this comment
  2. Bob Smith
    Bob Smith 29 June, 2014, 18:30

    How is mandating higher wages supposed to improve performance and turnover? This is same sort of magical thinking that pushes for subprime home loans. Wages are an effect of performance and attendance, not a cause, just as home ownership is an effect of culture and values, not their cause.

    Reply this comment
  3. Bill Gore
    Bill Gore 29 June, 2014, 19:25

    There is one important point about the minimum wage: low or rock bottom wages are SUBSIDIZED by the taxpayer, hence the subsidy flows directly to the business that is employing the low wage worker. Programs such as WIC, SNAP, Medicare (Medical), cash assistance, all allow workers to survive on rock bottom wages. Either cut off the subsidies for workers employed full time or raise the minimum. Cutting off the subsidy will force businesses to raise wages to a level that the worker can actually live on.

    Reply this comment
  4. jimmycarter
    jimmycarter 29 June, 2014, 20:22

    10 percent tax additional tax on govt pensions immediately, 18.875 percent on all gov t pension that began collecting 1/1/15 or after to fund govt fairness and encourage home ownership among the undocumented. Habitat for humanity needs support. Any homes other than one shall be donated with no exceptions to the state programs to encourage home ownership by the undocumented, with no mortgage, by all govt pension payees. State will purchase 59 memberships at Pebble Beach to encourage assimilation.

    Reply this comment
    • Bill Gore
      Bill Gore 30 June, 2014, 15:15

      A little sarcastic Jimmy, but I seriously think the USA is ready to go FULL SOVIET.

      By ‘full soviet’ I mean the following:

      Free housing guaranteed for ALL. Presto, no more homelessness.
      Free medical care. Absolutely FREE.
      A guaranteed job for everyone. Presto, 0% unemplyment.
      Totally free education, through university, for all, accompanied by rigorous aptitude testing with vocational education for the non-university-bound.

      All of this with a hair-raising police state to crush any dissent. Americans at this point will gladly give up whats left of their ‘rights’ for a little bit more security.

      Reply this comment
  5. Ted the Godhead of CWD
    Ted the Godhead of CWD 30 June, 2014, 09:31

    Jimmy— this is why you lost the second term.

    Reply this comment
  6. Chris Reed
    Chris Reed Author 30 June, 2014, 09:57

    Ted, come on, can’t you ever be intellectually serious?

    As the post noted, if the left wants to argue that overall, raising the minimum wage is broadly good for society, that’s one thing. But to argue that raising the minimum wage is a job-creation scheme with no downside is not honest or backed by the facts.

    You run a car wash. Your city begins to mandate a $12 hourly minimum wage. Two blocks away, in a neighboring city which has no such rule, there’s a car wash that pays its workers the state minimum of $9. Goodbye, car wash no. 1.

    Now you can say the neighboring city is wrong for not having the $12 mandate. But you can’t argue the $12 mandate is good for jobs in the city that has the mandate.

    Unless, of course, you’re an unserious troll.

    Reply this comment
    • Bob Smith
      Bob Smith 30 June, 2014, 14:20

      That’s why leftists want regulations and taxes implemented at the highest possible level, to prevent defection. That way everybody is screwed, plus they get to claim that the “benefits” the new tax/regulation is giving you helps the largest possible number of people. Never mind that things like the OECD’s attempts at tax harmonization to prevent “harmful tax competition” simply means that member states have no incentive to reduce taxes or regulations.

      Reply this comment
    • The Modified Ted Steele Methodologies (tm)
      The Modified Ted Steele Methodologies (tm) 30 June, 2014, 17:54

      Oh Chris, little buddy, would that “unserious troll” was even slightly offensive.

      It’s not me. it’s John Galbraith you have the beef with.

      And so many others…Raising the minimum wage is good economics. It means that people will have more money to spend, and that helps propel the economy forward and give a much-needed boost to many small businesses. Besides, with a higher minimum wage, fewer people will need to count on food stamps or other kinds of government assistance to feed their families. A higher wage means people can provide more for themselves.

      Reply this comment
      • Bloggerusa1
        Bloggerusa1 1 July, 2014, 01:43

        It would be accurate to state that raising the minimum wage means some people would have more money in their pocket while others have less. If the workers in a business make more then their employer makes an equivalent amount less. There is no net gain in consumer spending or economic activity.

        Reply this comment
  7. Ulysses Uhaul
    Ulysses Uhaul 30 June, 2014, 17:18

    Bobo……stop drinking snow cone juice……society is complicated….we need something better than economic stripping of the common man.

    Reply this comment

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