Throughout the COVID-19 crisis, America’s planning class has relied on a predictable mix of so-called stimulus ([link removed] ) and monetarist tricks ([link removed] ) to curb the pain of economic disruption. Such heavy-handed interventionism has long been misguided ([link removed] ) , but for many, the government’s efforts have not gone far enough.
Last spring, California Gov. Gavin Newsom talked of exploiting the pandemic ([link removed] ) as a way to “reshape how we do business and how we govern,” leading us into a “new progressive era.” Others, like Bernie Sanders and Alexandria Ocasio-Cortez ([link removed] ) , have gotten more specific with their proposals, trying to connect the particular problems of the pandemic with generic lists of progressive policy aims, from universal healthcare to “free” college and housing.
In the final presidential debate, Joe Biden did much of the same ([link removed] ) , arguing that a $15 federal minimum wage was necessary not for its general merits, but because it would serve as a form of economic relief for service workers suffering amid the pandemic.
“People are making six, seven, eight bucks an hour,” Biden said. “These first responders we all clap for as they come down the street because they’ve allowed us to make it – what’s happening? They deserve a minimum wage of $15. Anything below that puts you below the poverty level.”
Unfortunately, despite the lofty rhetoric and Biden’s routine claims ([link removed] ) that top-down price controls are somehow “empowering” or “dignifying,” these initiatives would do very little to help low-skilled workers and would be far more likely to inflict significant harm ([link removed] ) .
As economist Michael Strain points out ([link removed] ) , such proposals have proven problematic in times of plenty, never mind a moment such as ours, where employers are facing new pressures and service workers are competing harder than ever for employment:
In July 2019, the nonpartisan Congressional Budget Office estimated that a $15 minimum wage would eliminate 1.3 million jobs. The CBO also forecast that such an increase would reduce business income, raise consumer prices, and slow the economy.
The U.S. economy will be very weak throughout 2021. The nation will need more business income, not less; more jobs, not fewer; and faster, not slower, economic growth. A $15 minimum wage would move the economy in the wrong direction across all these fronts.
Calls for a $15 minimum wage are not new, of course. They became all the rage ([link removed] ) well before the pandemic began, with cities like Seattle ([link removed] ) and states like Maine ([link removed] ) , California ([link removed] ) , and New York ([link removed] ) already having moved toward such schemes.
The University of Washington,which has been tracking the policy’s effects in Seattle ([link removed] ) , concluding that the city’s path to $15 has so far led to a “9 percent reduction in hours” and a “6 percent drop in what employers collectively pay … for low-wage jobs.”
In San Francisco, the collateral damage ([link removed] ) continues. The East Bay Times ([link removed] ) reports that “upward of 60 restaurants around the Bay Area have closed” in the five-month period following the most recent hike. As a recent study in theHarvard Business Journal ([link removed] ) concluded, “The impact of a $1 rise in the minimum wage would increase the likelihood of exit for the median restaurant on Yelp (i.e., a 3.5 star restaurant) by around 0.055 percentage points, which is approximately 14 percent.”
The $15 minimum wage has failed in cities and states where the cost of living would seem to justify the increase. When enacted at a federal level, as Biden proposes, the results would only worsen, with wage controls serving to disrupt and interrupt an even wider and more diverse range of human relationships and economic signals.
“According to data from the Bureau of Labor Statistics, half of all workers in 20 states earned less than $18 per hour in 2019,” Strain writes. “In 35 states, the median hourly wage was less than $20. Setting a minimum wage so close to the median wage would price many workers out of the labor market. Indeed, in 47 states, 25% of all workers earned less than $15 an hour.”
When challenged on how such an increase would hurt small businesses, Biden quickly proceeded to tout the virtues of the Paycheck Protection Program ([link removed] ) , the bipartisan, $669-billion forgivable loan program. In doing so, Biden affirms what many already feared: that for a significant number of political leaders, such relief programs are not momentary “safety nets” but closed loops in an ongoing cycle of price distortion.
At a time when workers and businesses are enduring significant pain, the answers will not be found in manipulations of the market. Given that our current economic crisis is highly irregular and unpredictable ([link removed] ) , we ought to be focused on getting better and clearer price information, not further muddying the waters with top-down policy games.
Prices are not play things. When left alone from regulators and policymakers, they signal real insights about our creativity, behavior, and preferences. They provide a foundation for authentic human relationships, giving us the freedom and information needed to create and innovate, to trade and exchange, to restore and rebuild.
Whatever our goals for economic relief – whether we are trying to mitigate the pain of short-term losses, spur consumer spending, or avoid future inflation – viewing the economy as a machine to be programmed will not serve us well. Through a paradigm of social collaboration ([link removed] ) , however, much is possible. If we truly hope to empower people to provide for themselves while also boldly and freely meeting the needs of others, we will need free prices to do it.
Joel Sercel on the ethics of space exploration ([link removed] )
November 18, 2020
20201116 Acton Line YT ([link removed] )
In 1958, in the wake of the Soviet Union launching Sputnik 1 – the world’s first artificial satellite – into space, President Dwight D. Eisenhower signed the National Aeronautics and Space Act into law. The National Aeronautics and Space Administration, or NASA, was born. And the space race was underway.
In the following decades, the world would see the first man in space, the first spacewalk, and astronauts landing on the surface of the moon. Across eight different programs, the United States would fly 239 space missions, with 135 of those representing the space shuttle program.
On August 31, 2011, the United States’ shuttle program was officially ended, and the United States government was out of the business of space exploration and travel.
Today, private companies like Elon Musk’s SpaceX, Richard Branson’s Virgin Galactic and Jeff Bezos’s Blue Origin are leading the way into the final frontier. Elon Musk has announced his plan is to have 1 million people living in a colony on Mars by the year 2050.
As a new space race to settle on Mars and, perhaps, beyond takes flight, significant ethical questions remain unclear and unanswered.
In this episode, we talk with Joel Sercel, an entrepreneur and space technologist, who argues that we need to start building international consensus on questions surrounding bioethics, property rights, laws governing space travel and space settlements, and stewardship of God’s creation outside of the Earth’s atmosphere.
The Poverty Cure Summit, an Acton Institute virtual event, provides an opportunity for participants to listen to scholars, human service providers, and practitioners address the most critical issues we face today which can either exacerbate or alleviate poverty. These speakers will join panel discussions to discuss the legal, economic, social, and technological issues pertaining to both domestic (U.S.) and global poverty. Rooted in foundational principles of anthropology, politics, natural law, and economics, participants will gain a deeper understanding of the root causes of poverty and identify practical means to reduce it and promote human flourishing.
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Deutsche Bank’s work-from-home tax is economic insanity ([link removed] )
As if 2020 could not get any worse, this week intellectuals unleashed another pandemic: a new proposed tax. Deutsche Bank suggested that the government lay a 5% “privilege” tax on employees who work from home, on the grounds that they “disconnect themselves from face-to-face society.” This misguided scheme would engage in useless social engineering, disregard the needs and wishes of female employees, harm vulnerable workers, require a massive invasion of privacy, and subsidize failing business owners to cut low wages even further. More vexing yet, if it wished, Deutsche Bank could create even more funds than its proposed work-from-home tax would raise simply by making one corporate decision.
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