This is cronyism of a certain sort, and our most vulnerable communities are in the crosshairs.
Acton Institute ([link removed] )
How the $15 minimum wage accelerates community decline ([link removed] )
By Joseph Sunde
stores-closed-wage ([link removed] )
As Congress debates the specifics ([link removed] ) of yet another stimulus bill, President Joe Biden ([link removed] ) and Sen. Bernie Sanders ([link removed] ) continue to push for the inclusion a $15 federal minimum wage ([link removed] ) – a policy that is only likely to prolong pandemic pain ([link removed] ) for America’s most vulnerable businesses and workers.
As if to confirm such fears, large corporations like Amazon ([link removed] ) and Walmart ([link removed] ) have been quick to voice their support for the increase. “It’s time to raise the federal minimum wage,” writes Amazon’s Jay Carney ([link removed] ) , boasting of their decision to increase wages in 2018. “We believe $15 an hour is the minimum anyone in the U.S. should be paid for an hour of labor. We also believe it’s good for business.”
But while it may be “good for business” for Amazon, such an increase will pose significant challenges for others, particularly smaller businesses ([link removed] ) and those operating in low-cost states ([link removed] ) . According to one study ([link removed] ) , “Roughly half the minimum-wage workforce is employed at businesses with fewer than 100 employees, and 40% are at very small businesses with fewer than 50 employees.”
According to the latest analysis ([link removed] ) from the Congressional Budget Office, the proposed Raise the Wage Act would eliminate an estimated 1.4 million jobs while increasing the federal deficit by $54 billion over the next 10 years. This doesn’t even account for the indirect ways ([link removed] ) such a policy is likely to drive automation ([link removed] ) , squeeze consumers with higher prices ([link removed] ) , and reduce gross domestic product ([link removed] ) .
As Timothy Carney explains in The Washington Examiner ([link removed] ) , it’s yet another example of “regulatory robbery,” wherein government and large corporations collaborate together to diminish opportunity and economic diversity. For those truly concerned about the roots of economic inequality and the pressing problems of poverty, this is a leading problem ([link removed] ) .
“Amazon and other giant corporations often lobby for costly labor regulations and mandates in order to kill their competitors,” Carney writes. “Uber has recently argued that states should require all gig companies to provide medical and disability coverage for injuries incurred on the job, and Walmart was an early supporter of Obamacare’s employer mandate in health insurance.”
There are many reasons ([link removed] ) to oppose such an increase. By taking a one-size-fits-all approach to prices, we ignore their functional role as signals for service ([link removed] ) . In doing so, we diminish our ability to specialize and imagine new possibilities and partnerships across the economic order.
But given the decline of American communities ([link removed] ) and the particular economic problems of the pandemic ([link removed] ) , the collusion among large corporations makes the destruction all the more painful and perverse. At a time when online shopping ([link removed] ) and fast-food behemoths ([link removed] ) are booming – and independent retailers and restaurants are struggling to survive ([link removed] ) – such an approach gets things backwards with remarkable precision, working to erode economic diversity and accelerate decline where help is needed most.
As Carney explains, the fruits will not be purely “economic” in nature. By using the government to kick “Main Street” businesses when they’re already down, our government is poking at things far more profound than mere “jobs,” “wages,” or static little storefronts:
So the corner store that somehow has survived the pandemic and decades of competition from Amazon may pay a local college student $7.25 an hour to stock shelves. If you outlaw that job, you may help Amazon, but you also hurt that college student and that mom and pop. What’s more, you hurt the community.
Brick-and-mortar stores on Main Street draw people to Main Street. When people walk up and down Main Street, they bump into neighbors, they stop in at the coffee shop. Their children run into other children. These unplanned and serendipitous encounters are the building blocks of tight-knit communities.
The car-centric, inhuman sprawl caused by Robert Moses, Walmart, zoning laws, and yes, Amazon, makes it easier for most people (those with cars and who don’t have car-seat-aged children) to shop and harder for others (those without cars and who have to buckle the baby, unbuckle, and rebuckle, re-unbuckle, et cetera). It has also eroded communities by reducing how much people know their neighbors.
For those who claim that these policies are designed to help the “little guy,” the irony abounds.
To be clear, such policies have also proved disastrous for employees of large corporations ([link removed] ) , as well as businesses in high-cost metropolitan areas like Seattle ([link removed] ) . What more damage might they achieve in areas that face greater vulnerabilities ([link removed] ) ? The possibilities for unseen negative effects are virtually endless.
Some would argue that these risks are mostly due to other “outside forces” — globalization, automation, and innovation — and in many ways they are. But it’s one thing if a business closes due to natural forces, based on authentic prices and uninhibited competition among freely operating enterprises and institutions. It’s quite another when such disruption is unnecessarily forced or accelerated by the hands of the federal government.
As the cheers of Amazon and Walmart make clear, this is not “creative destruction,” ([link removed] ) properly understood. This is cronyism of a certain sort, and our most vulnerable communities are in the crosshairs.
Acton Line Podcast
Brian Hooks on "Believe in People" ([link removed] )
February 10, 2021
20210210 ([link removed] )
As we look around the country and the world, we see towering barriers are holding millions of people back, and institutions that should help everyone rise that are not doing the job. We see crumbling communities and one-size fits all education.
Businesses rig the economy. Public policy stifles opportunity and emboldens the extremes. As a result, this country is quickly heading toward a two-tiered society.
People are looking for a better way.
In the new book, “Believe in People: Bottom-Up Solutions for the Top-Down World,” authors Brian Hooks and Charles Koch contend that today’s challenges call for nothing short of a paradigm shift – away from a top-down approach that sees people as problems to be managed, toward bottom-up solutions that empower everyone to realize their potential and foster a more inclusive society.
Such a shift starts by asking: What would it mean to truly believe in people?
In this episode, we speak with Brian Hooks, CEO of Stand Together and co-author of “Believe in People.” In the book, Hooks and Koch maintain that the only way to solve the really big problems – from poverty and addiction to harmful business practices and destructive public policy – is for each and every one of us to find and take action in our unique role as part of the solution.
Listen to the episode
([link removed] )
You might also like
Business Matters 2021 [Virtual]
Certain Principles for Uncertain Times ([link removed] )
Business Matters2021_1680x730-2 ([link removed] )
We are in the midst of volatile times. Between the COVID-19 pandemic, civil unrest, and political turmoil, we have seldom seen a more uncertain time for our businesses and for the world. Business leaders are being tested by switching to remote work, closing and reopening offices, adjusting to the changing needs of clients, laying off employees, and preparing for policy changes under a new presidential administration.
In such a time, what principles should we turn to? And rather than sacrificing ethical standards, how can leaders fulfill their responsibilities while holding fast to their ethical principles?
On February 25, join a virtual audience across the globe as leading experts and CEOs discuss the current challenges for businesses and equip you with principles to lean on as you navigate these uncertain times.
([link removed] )
Denmark’s government wants to read your sermons ([link removed] )
In the name of stamping out domestic subversion, politicians in Denmark have drafted a bill that would force clergy who preach in a foreign language to translate their sermons into Danish and send a copy to the government for review. Had they tried, lawmakers could not have come up with a bill that is simultaneously so invasive and ineffective.
([link removed] )
Facebook ([link removed] )
LinkedIn ([link removed] )
Twitter ([link removed] )
Instagram ([link removed] )
Acton Institute, 98 Fulton St E, Grand Rapids, MI 49503, United States, 616-454-3080