Stephen Moore, chief economist and the Heritage Foundation and Orange County Register columnist, shares his views with CalWatchdog.com’s James Poulos.

A new study by the Heritage Foundation shows how minimum-wage price increases across America increase fast-food prices and kill jobs. Those backing higher minimum wages say “greedy businesses” will pay for the higher wages through reduced profits. Wrong.

Heritage:

Union activists want to raise the minimum wage in the fast-food industry to $15 an hour. However, fast-food restaurants operate on very small profit margins; they could only afford such wages by raising prices—significantly. Higher prices would, in turn, drive customers away, forcing even larger price increases to cover costs. Ultimately, the average fast-food restaurant would have to raise prices by nearly two-fifths. This would cause sales to drop by more than one-third, and profits to fall by more than three-quarters. Absent the widespread adoption of labor-saving technology, the union-led “Fight for 15” would make fast food much more expensive for Americans.

Artificially inflating wages would substantially increase fast-food restaurants’ total costs—labor makes up a considerable portion of their budget. Chart 1 shows the financial statements of the average fast-food restaurant in 2013. Labor costs (26 percent) and food and material costs (31 percent) make up the majority of the typical restaurant budget.

The Bureau of Labor Statistics reports the average cook in a fast-food restaurant earned $9.04 an hour in 2013. The SEIU’s push for $15 an hour would consequently raise fast-food wages by at least 66 percent. Paying $15 an hour would raise fast-food restaurants’ total costs by approximately 15 percent.

And what about all the profits those greedy capitalists make? Surely those ripoff artists should suffer by paying higher minimum wages — even by having their property taken by the government and run for the benefit of all. As the Marxists urge: Expropriate the expropriators!

The reality:

Fast-food restaurants could not pay this additional amount out of their profits. The typical restaurant has a profit margin of just 3 percent before taxes. That works out to approximately $27,000 a year—less than the annual cost of hiring one full-time employee at $15 an hour. In order to raise wages, fast-food restaurants must raise prices.

The truth? It’s an assault on the middle class

Allowing BART employees higher salaries and benefits on their already-high compensation will only result in increasing costs and increased fares for the riders.

It’s too easy to negotiate with other people’s money, and even easier to end up giving it away.

By John Seiler

Two venerable old conservative print journals have died in recent days. Policy Review has ceased operations entirely.

Human Events, which was Ronald Reagan’s favorite weekly journal, will cease printing but remain online.

I was associated with both of them. Although printed in recent years by the Hoover Institution, Policy Review was started in 1977 by the Heritage Foundation. That summer, I had just graduated from Hillsdale College and was hired to be the assistant editor on the first issue (cover shown nearby; full text here).

I soon took a job as a cub reporter at the Colorado Gazette-Telegraph, then joined the U.S. Army in Feb. 1978, was taught Russian, and served in West Germany with the 533 Combat Electronic Warfare Intelligence Battalion. Ah, youth!

When I was mustered out in 1982, I returned to my native Michigan. But it was the depth of a Depression, with unemployment at 16 percent. I couldn’t find a job. So I got an scholarship at the National Journalism Center that fall. I did an internship at Human Events. After that, I became assistant editor at Conservative Digest (itself long defunct) and other publications. In 1987, I got a job with the Orange County Register, where I still write editorials freelance. The Register’s longtime editorial and commentary director, Cathy Taylor, became the editor of Human Events in 2011.

The demise of both Human Events and Policy Review shows us something of the problems of conservatives today, and of the Republican Party to which they usually are closely attached.

Look at the articles listed on the cover on that first issue of Policy Review in 1977, and the full contents here. The articles are dominated by the Cold War against communism, then by the “malaise” economy, as it was called, in the 1970s under President Jimmy Carter. I don’t have any copies of Human Events from 1977 or 1978, but the stories covered were similar. (As they were in National Review and other conservative publications.)

Conservatives also were just starting to formulate their “supply side” approach to economics: putting tax cuts before everything else, including balanced budgets.

Reagan

In 1980, Ronald Reagan was elected president to “stand tall” against communism and get the economy moving again. In 1989, the Berlin Wall fell. In 1991, the Soviet Union — the Evil Empire, as the Gipper had branded it — dissolved itself. The Cold War was over, without getting us all nuked. We won.

Reagan also cut the top income tax rate from 70 percent to 28 percent when he left office. It’s now 39.6 percent, increased this year from 35 percent. But would President Obama ever try to raise it back to 70 percent? Only in his dreams. So conservatives still mostly have won that issue.

In the 1970s, inflation also pushed the middle-class into upper-income tax brackets. Reagan won a partial victory there by indexing the tax brackets to inflation beginning in 1985. Unfortunately, he didn’t make it retroactive to the tax rates of 1971, before the Nixon Shock took us off the gold standard and sparked the huge inflation of the 1970s.

But at least tax rates were indexed. Without Reagan’s “supply-side” reforms, today the middle-class would be paying 70 percent income tax rates, plus another 9.3 percentage points in California. Total: 79.3 percent. Think you could survive on 20.7 percent of your income?

So, although the victory was only partial, on taxes conservatives/Republicans also took another victory.

Two victories is more than any movement should expect. So the real problem with the conservative movement and the Republican Party today may be that they don’t know how to move on and find new ways to meet the needs of the voters — whatever those needs may be. After 9/11, Republicans geared up for another Cold War in what then was called the GWOT — the Global War on Terror, a mouthful of a phrase and acronym Reagan never would have allowed to cross his Telepromptr.

But however deadly terrorists can be, they don’t have 40,000 nuclear warheads and a 5 million-man, goose-stepping army the way the Soviets did in 1984.

The Iraq and Afghanistan wars President George W. Bush launched turned into fiascoes, smaller-scale versions of the Vietnam debacle. Republicans/conservatives got the blame. President Obama/Democrats are getting the credit for winding down the wars.

What’s next?

So what’s next? As Jonathan Chait pointed out last fall in “The Vast Left-Wing Conspiracy is On Your Screen,” Republicans/conservatives lost the “culture wars” so badly over the past 20 years that few people even use the phrase anymore. Liberal Democrats now control public K-12 schools (attended by 89 percent of children), almost all the colleges and universities, almost all TV and movie entertainment, most newspapers and almost all TV news except FoxNews.

They only thing liberal Democrats don’t dominate is independent conservative and libertarian Web sites, of which there are many.

Republicans now, comically, are trying to attract Latino voters, whom they’ve never had much success with, even before immigration became a big issue in the 1990s. And as I’ve written here, Republicans also can’t afford to alienate their “base,” which strongly opposes amnesty on immigration. So, they’re stuck. 

However, there are bright spots. New Internet technologies, such as KhanAcademy.com, are breaking the leftist monopoly on learning. Just about any book ever written is free on the Internet,  or can be purchased cheaply on Amazon or some other book seller. In the past 12 years, both Republicans and Democrats effectively have bankrupted the federal government with their wild spending. So cuts in Leviathan’s immense powers are inevitable, and will be so large as to make the current struggle over the 2 percent sequestration look like playing tiddly-winks.

Keynesian economics is the delusion, held by almost all liberals and many conservatives, that you can make something from nothing — in this case, through monetary manipulation. But you can’t.

As to conservatives and Republicans, most still live mentally in the 1970s and pine for Reagan to a disco soundtrack. That day is gone. What comes next is unknown.

By Steven Greenhut

SACRAMENTO — California residents are depressed about the economy and see little hope for change in the near future, yet they seem more reluctant than ever to change the current high-tax, union-dominated political course that has led to the struggling economy.

As the Field Poll revealed in July, “Californians have had an extremely gloomy view of the state’s economy since 2008. … Currently nine out of 10 residents … describe the state’s economy as being in bad times.” The data is a couple months old, but nothing suggests any drastic change since then.

Meanwhile, the latest polling for the two highest-profile November ballot initiatives brings good news for those who embrace the status quo. A Public Policy Institute of California survey shows Gov. Jerry Brown’s Proposition 30, which would temporarily increase the state sales tax and income taxes on those earning at least $250,000 a year, ahead, 52 percent to 40 percent. By the way, how often have you met a temporary tax hike that actually goes away?

Furthermore, PPIC reports that voters have soured on perhaps the most significant statewide initiative on the statewide ballot, Proposition 32, a “paycheck protection” measure that is losing, 49 percent to 42 percent. (Even though support for it is fading, PPIC found a solid majority of voters in favor of the goals of the initiative, which makes California voters even more perplexing.)

The proposition stops the state’s politically dominant unions from using automatic payroll deductions to finance their political activities. The initiative has some other features, such as a bans on political payroll deductions from corporations, on direct giving to political candidates and on political donations from government contractors seeking favors.

Pointless

But these other provisions are mostly pointless. Corporations do not use payroll deductions to fund political efforts. Following the U.S. Supreme Court’s Citizens United decision in 2010, few corporations or unions give political contributions directly to candidates, preferring to use independent campaigns to help chosen candidates. Typical of all initiatives, Prop. 32 includes a few provisions that are meant more to sway voters than to change policy.

Nevertheless, the core issue here — restricting those payroll deductions that are the foundation of union political power — is not just principled, but crucial if California voters are serious about moving the state away from its current political and economic trajectory.

No one should have their money taken by force and used for political purposes that often are at odds with one’s beliefs. No one should have money deducted automatically from their paycheck and given to a private organization without one’s consent. This is a freedom issue as well as a political-influence issue. The current situation is pure coercion.

Under Prop. 32, the unions can still deduct an agency fee from members’ paychecks to pay for collective-bargaining activities. Ironically, liberal groups are complaining that corporations and conservative donors are funding ads supporting Prop. 32, even as massive union spending, thanks to the current forced-donation situation that Prop. 32 addresses, is pounding the initiative with ads making dubious claims about exemptions for wealthy businesses.

States that have passed paycheck-protection-type laws have seen mixed results because of various loopholes and legal challenges, but there’s little question that public- and private-sector union political influence has been reduced in those states. A study by the conservative Heritage Foundation found that, on average, state laws that limit these political payroll reductions slash union political contributions in half. Unions are still able to raise plenty of money — but they have to ask for it rather than just take it.

Death Star

One major California union called Prop. 32 “the Death Star for unions,” which is an overstatement, but illustrates how concerned the unions are about this proposition.

Consider why it is on the Nov. 6 ballot. Last year, Brown signed Senate Bill 202, requiring ballot initiatives to be decided during general elections, not during lower-turnout primary elections. “Everyone knows that passing SB 202 was to diminish chances that voters would pass a so-called ‘paycheck protection’ measure that would eat into unions’ ability to gather campaign funds from public employees — money that almost always goes to Democrats,” opined Sacramento Bee columnist Dan Walters.

Brown was elected with strong support from unions and has governed in a way that usually puts their priorities first. The Democratic Party, which controls every statewide constitutional office and could soon have two-thirds control of both houses of the Legislature, is always doing the bidding of the unions. If this doesn’t change, it’s hard to envision an optimistic future here.

Some Democrats understand how unions are destroying public services.

Former Democratic state Sen. Gloria Romero of Los Angeles is a spokesperson for Prop. 32, because she — as a devoted education reformer — has watched the teachers’ union squelch reform and turn California’s public schools into bureaucratic nightmares.

“If we don’t deal with how the beast is fed, and what maintains that, and what gives it status and opportunity to run roughshod over the educational lives and futures of 6 million kids in California, then shame on us,” Romero told the Wall Street Journal’s Allysia Finley.

Even the San Francisco Chronicle, which opposed Prop. 32 in an editorial, grasps the heart of the problem: “There is no question that organized labor has a powerful grip on the state Capitol, and that works against the public’s interest on issues such as education reform, government efficiency and pension reform.”

Then why not take serious steps to loosen that grip? If California voters reject Prop. 32 and support Prop. 30, the unions will maintain their financial control over the political process, and all Californians will pay more to prop up the current dysfunctional system. And, no doubt, the same California voters will continue to tell pollsters how unhappy they are with the current state of affairs.

Steven Greenhut is vice president of journalism at the Franklin Center for Government and Public Integrity; write to him at: steven.greenhut@franklincenterhq.org.