Tag Archives: D.C.

Wal-Mart cancels plans to build three stores after D.C. leftists raise minimum wage 50%

From Fox Business, a story that shows how completely clueless left-wing politicians are about economics.

Excerpt:

Wal-Mart Stores (WMT) no longer plans to build three stores in the nation’s capitol, after the city’s council voted to force large retailers to pay starting wages that are 50% higher than the minimum wage there.

The world’s largest retailer also said it will consider its options related to three other Washington, D.C., stores that are still under construction.

The bill, called the Large Retailer Accountability Act of 2013, was approved by an 8-to-5 vote, even though Walmart had warned that the company would leave the district.

“Nothing has changed from our perspective: we will not pursue Skyland, Capitol Gateway, and New York Avenue and will start to review the financial and legal implications on the three stores already under construction,” Walmart spokesman Steven Restivo said, referring to the locations of the planned stores.

“This was a difficult decision for us—and unfortunate news for most D.C. residents—but the Council has forced our hand.”

The district’s new law requires retailers with sales of more than $1 billion and with stores of at least 75,000 square feet to pay their workers starting salaries of at least $12.50 an hour, compared to the minimum wage of $8.25.

Unionized businesses are exempt from the measure. Large stores that already have a presence in D.C., including Target (TGT) and Macy’s (M), have four years to comply.

Now for most of my readers who understand economics, what happened here is going to be pretty obvious. But sometimes people get specialized in other areas and neglect the study of economics. The danger then is that they will be moved to support policies that appeal to their hearts. But it’s very important to understand that policies that sound good, like raising wages, often have unexpected negative results.

Here is George Mason University economics professor Walter Williams to explain the problem with increasing the minimum wage, starting with the basics of economics.

Excerpt:

Are people responsive to changes in price? For example, if the price of cars rose by 25 percent, would people purchase as many cars? Supposing housing prices rose by 25 percent, what would happen to sales? Those are big-ticket items, but what about smaller-priced items? If a supermarket raised its prices by 25 percent, would people purchase as much? It’s not rocket science to conclude that when prices rise, people adjust their behavior by purchasing less.

It’s almost childish to do so, but I’m going to ask questions about 25 percent price changes in the other way. What responses would people have if the price of cars or housing fell by 25 percent? What would happen to supermarket sales if prices fell by 25 percent? Again, it doesn’t require deep thinking to guess that people would purchase more.

This behavior in economics is known as the first fundamental law of demand. It holds that the higher the price of something the less people will take and that the lower the price the more people will take. There are no known exceptions to the law of demand. Any economist who could prove a real-world exception would probably be a candidate for the Nobel Memorial Prize in Economic Sciences and other honors.

[…]University of California, Irvine economist David Neumark has examined more than 100 major academic studies on the minimum wage. […]About 85 percent of the studies “find a negative employment effect on low-skilled workers.” A 1976 American Economic Association survey found that 90 percent of its members agreed that increasing the minimum wage raises unemployment among young and unskilled workers. A 1990 survey found that 80 percent of economists agreed with the statement that increases in the minimum wage cause unemployment among the youth and low-skilled. If you’re looking for a consensus in most fields of study, examine the introductory and intermediate college textbooks in the field. Economics textbooks that mention the minimum wage say that it increases unemployment for the least skilled worker.

When considering what economic policies to adopt, it is not enough to do what feels good. Liberals and conservatives agree that it is good to help the poor. Liberals think that higher minimum wage rates help the poor, and conservatives think that lower minimum wage rates help the poor. This is not a topic that is up for debate, though, because economists across the idological spectrum agree on this one – and for the reasons outlined above and illustrated in the Wal-Mart case.

Take a look at this post from moderate Harvard University economist Greg Mankiw.

He writes:

I believe it is better to introduce students to economics with topics about which there is more of a professional consensus. In chapter two of the book, I include a table of propositions to which most economists subscribe, based on various polls of the profession. Here is the list, together with the percentage of economists who agree:

    1. A ceiling on rents reduces the quantity and quality of housing available. (93%)
    2. Tariffs and import quotas usually reduce general economic welfare. (93%)
    3. Flexible and floating exchange rates offer an effective international monetary arrangement. (90%)
    4. Fiscal policy (e.g., tax cut and/or government expenditure increase) has a significant stimulative impact on a less than fully employed economy. (90%)
    5. The United States should not restrict employers from outsourcing work to foreign countries. (90%)
    6. The United States should eliminate agricultural subsidies. (85%)
    7. Local and state governments should eliminate subsidies to professional sports franchises. (85%)
    8. If the federal budget is to be balanced, it should be done over the business cycle rather than yearly. (85%)
    9. The gap between Social Security funds and expenditures will become unsustainably large within the next fifty years if current policies remain unchanged. (85%)
    10. Cash payments increase the welfare of recipients to a greater degree than do transfers-in-kind of equal cash value. (84%)
    11. A large federal budget deficit has an adverse effect on the economy. (83%)
    12. A minimum wage increases unemployment among young and unskilled workers. (79%)
    13. The government should restructure the welfare system along the lines of a “negative income tax.” (79%)
    14. Effluent taxes and marketable pollution permits represent a better approach to pollution control than imposition of pollution ceilings. (78%)

When you raise the price of anything – including labor – fewer people will buy it. Wal-Mart will still spend the money on new stores and new employees, just not in Washington, D.C. – not with those laws. Notice that number one on his list is the case of rent control, where government good-intentioners try to hold the price of rent down. What happens next? Well, it the price goes down then everyone wants to buy more of whatever just went on sale. But the people providing what just went on sale stop making it because they can’t make a profit. The unexpected consequence is that there is a housing shortage. The quantity of housing decreases, and the quality of housing decreases. The quality decreases because demand is so high that property owners no longer have to maintain the properties, since demand has skyrocketed. Economics is something that everyone should study, so that we don’t just have good intentions, but also have good results.

 

Senator Marco Rubio’s speech at the conservative CPAC 2012 conference

If I had to choose one Republican who gives great speeches on what it means to be a conservative, I would pick Marco Rubio. (25 minutes)

Here’s an article from Human Events about the speech, for those who can’t watch it or listen to it.

Excerpt:

Rubio ranked the strength of the American people alongside the importance of economic and military strength, for it is our people – not our government – who have made us great.  He sees critical institutions of society, which contribute to the strength of citizens and families, under assault by the Obama Administration.  “We have a President who, just a few days ago, issued a mandate ordering religious institutions to follow his ideals… telling religious-based organizations that they must, by mandate of the federal government, pay for things that religion teaches is wrong.  You may not agree with that religion’s teachings, but that’s not the point.  The point is that the First Amendment still applies.  Religious freedom still exists.”

He confessed he isn’t sure what the foreign constitutions Justice Ginsburg admires might have to say on the matter, but he knows what the United States Constitution says: “The federal government does not have the power to force religious organizations to pay for things that organization thinks is wrong!”

On the scale of history, only a “moment” has passed since world wars were fought against totalitarian evil.  What followed could hardly be described as “world peace,” and cleaning the blood from the edge of the statist hammer has not softened its essential nature.  “Today millions of people around the world are part of the middle class because of the rise of democracy and free enterprise.  Did that happen on its own?  Is that the natural state of man?”  Rubio suggested a study of humanity’s long history beneath the boots of oppressors answers that question.

Democracy and free enterprise spread, not because they are humanity’s default condition, but because “the most powerful nation in the world believed in these things, fought for these things, spoke out for these things… and most importantly, was an example of these things.”  The power of the American example transcends military and political force, because “all around the world, there are people who know there is someone just like them, living here, doing things they cannot.”

“What happens if we diminish, because we can no longer afford to be the leader of the free world?” Rubio asked.  “What happens if we diminish because our leaders decide they don’twant to be the leaders of the free world anymore?  What happens if we retreat?  What happens is that we’ll leave a space, and that space will be filled by someone else.”  The likely candidates for our successor as global hyperpower are totalitarian states like Russia and China… whose measure Rubio took by noting that they’ve vetoed United Nations efforts to rein in Syria’s dictator, Bashar Assad, because they reserve the right to use such brutal tactics against their own people.

Rubio understands that the clash of civilizations cannot be won from an easy chair, or a death bed.  “The greatest thing we can do for the people of the world is be America,” he concluded.  “That’s what’s at stake here.  That’s what November will be about.”

It would be a shame if all the people who flee to America, to escape from socialist decay and totalitarian repression, found the very things they fled awaiting them on our shores.  It pays to take a moment and see our exceptional nation through the eyes of those tired, poor, huddled masses, as Marco Rubio has done.

You can listen to an MP3 of the speech here. (12 Mb)

He’s only 40 years old. We have a deep, deep bullpen.

Supreme Court narrowly sides with private schools against government

From the Wall Street Journal.

Excerpt:

The Supreme Court’s big school choice decision yesterday is notable mainly for its insight into the progressive mind. To wit, no fewer than four Justices seem to believe that all wealth belongs to the government, and then government allows citizens to keep some of it by declining to tax it.

At issue in Arizona Christian School Tuition Organization v. Winn was a state tax credit for donations to organizations that offer scholarships for private schools, including (but not exclusively) religious schools. A group of taxpayers sued, claiming that religion was being subsidized on their dime, in violation of the First Amendment’s establishment clause.

The district court tossed out this novel church-state theory, only to have it revived by the Ninth Circuit Court of Appeals. Yesterday’s 5-4 decision was another well-deserved rebuke to the nation’s leading judicial activists who dominate that appellate court.

[…]And what do you know, four Justices assume precisely that. Both of President Obama’s nominees joined the four dissenters, and newcomer Elena Kagan delivered a fiery 24-page apologia for that position, claiming that “the distinction” between appropriations and tax credits “is one in search of a difference.” There’s a good debate to be had about tax credits (see below), but one question for Justice Kagan: Is the government also establishing religion by not imposing a 100% tax rate on churches, mosques and synagogues?With one more vote, the current Court’s liberal minority would surely ban school choice involving any religious schools. The Arizona decision shows again that the Court is only a single vote away from many decisions not all that far removed from those of the Ninth Circuit.

You can also listen to a 5-minute podcast on the decision from the Hugh Hewitt show right here.

Note that Obama’s two new appointees sided against Christian schools and private schools. Yet some brain-damaged Christians actually vote for Democrats, and claim to be Christians. (And they claim to want to get married and to raise children who will presumably be Christians, too!). School choice is as central an issue to informed Christians as is opposition to no-fault divorce, same-sex marriage and abortion.

Must-see videos on education policy

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Republicans in Florida, Indiana and Pennsylvania push school choice

First, education reform in Florida.

Excerpt:

Michelle Rhee, who gained national attention as the chancellor of schools in Washington, D.C., called Monday for giving students government-funded vouchers to attend private schools, rating principals based on student achievement and getting rid of teacher tenure.

The release of the blueprint was the first formal action of Ms. Rhee’s new advocacy group, StudentsFirst, which she launched in December, after leaving her job heading D.C. schools in October. Ms. Rhee said she was in discussions with the governors of Florida, New Mexico, New Jersey, Tennessee, Nevada and Indiana to adopt part, if not all, of the agenda.

[…]The nation’s two largest teachers’ unions criticized Ms. Rhee’s agenda.[…]The detailed plan Ms. Rhee released Monday focuses on overhauling teacher pay and evaluation plans, giving parents more say in their child’s education and spending tax dollars more wisely.

In addition to doing away with tenure, it calls for ending the practice of paying teachers based on years of service and on the master’s degrees they collect. Ms. Rhee said pay should be based on whether teachers boost student achievement.

She also is calling for districts to get parental consent before placing children in the classrooms of low-performing teachers. Ms. Rhee said firing ineffective teachers can be time-consuming and expensive.

“Too many districts hide the fact that they have ineffective teachers and we are saying, ‘If you can’t change the laws, then you have to give parents the information,’ ” she said.

The blueprint also prods states and districts to adopt “parent trigger” laws that let parents force a major overhaul of a school if more than half of them sign a petition. They could vote to turn the school into a charter school or force the district to get rid of most of the teaching staff.A similar policy was used in Compton, Calif., last year.

Ms. Rhee’s document also calls for an end to what she calls ineffective policies that waste taxpayer money, such as class size reduction policies in the higher grade levels. Her plan, she said, wouldn’t increase spending but would ensure taxpayer money was spent more wisely.

StudentsFirst’s initial foray into policy could be in Florida, where Republican Gov. Rick Scott, who was elected to office in November, appointed Ms. Rhee to his transition team. In a news release, Mr. Scott praised Ms. Rhee’s agenda and said he supported her call to eliminate tenure and expand the number of charter schools, public schools run by independent groups.

And education reform from Indiana. (H/T Heritage Foundation)

Excerpt:

Gov. Mitch Daniels urged the state legislature to finally act on significant reforms to public education and local government in his annual State of the State speech Tuesday, repeating a call for the expansion of charter schools, merit pay for teachers and the elimination of township government.

[…]Now empowered by a Republican majority in both legislative chambers, Daniels said “it’s going to be a session to remember.” He was escorted to the podium by several lawmakers of both parties, including Sen. Earline Rogers, D-Gary.

He said Indiana should let students finish their high school studies a year early and be given scholarships for college studies. Teachers should be rewarded based on student performance, he said, adding that one in three Hoosier children can pass the national math or reading exam.

Meanwhile, he said 99 percent of Indiana teachers are rated “effective.”

“If that were true 99 percent, not one-third, of our students would be passing those national tests,” Daniels said.

Families who can’t find the right public or charter public school, he said, should be able to apply state dollars toward “the non-government school of their choice.”

And finally, education reform in Pennsylvania. (H/T Heritage Foundation)

Excerpt:

Political momentum is building for taxpayer-funded school tuition vouchers, as hundreds of people clogged the Capitol rotunda Tuesday to support the idea of “school choice.”

[…]During the recent campaign, Lt. Gov. Jim Cawley told the boisterous crowd, Gov. Tom Corbett “repeatedly said that things would change in education. Today we start that process of putting children first. State government should be open to and promote charter schools, home schools, private schools and cyber schools” as well as traditional public schools, he said.”I’m more excited and encouraged about the possibility of educational change than I’ve ever been,” said Sen. Jeffrey Piccola, R-Dauphin, who has been advocating state-funded tuition vouchers for 15 years.

[…]His bill, Senate Bill 1, would create a three-phase program for making state-funded vouchers available to low-income students who now have no choice but to go to public schools that consistently score poorly on state proficiency tests.

[…]The Senate Education Committee will hold a hearing on the bill in mid-February, and it could get a Senate vote in March. Since Republicans control both the Senate and House, and since Gov. Tom Corbett supports the school choice idea, the bill is likely to be enacted. But opponents could file a court challenge.

Last week was “School Choice Week“, and there were a lot of events promoting school choice. Republicans noticed these events and participated in them. And now Republicans are making a push to sign bills that help poor students to get better educations. Democrats are opposed to school choice because they are supported by teacher unions who want guaranteed jobs for teachers regardless of performance.

I like that the Republicans are making pushes to cut spending, ban taxpayer funding of abortions, and introduce school choice. These are all issues that I strongly agree with, because they are all pro-child. Children shouldn’t have to pay for the debts their parents run up, children shouldn’t be killed in the womb, and children shouldn’t get a crappy education just so that badly performing schools can stay open. These policies make sense to me. Next, they should introduce a federal law for charter marriages, and introduce a federal voucher program for pre-marital counseling.

Must-see videos on education policy

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What issue could propel the Republicans to victory in 2012?

The issue is school choice. Are the Republicans aware of this issue?

You bet they are.

Excerpt:

The D.C. Opportunity Scholarship Program, as it is known, was launched in 2004 as the first federally funded program providing K-12 education grants. Though supporters say it gives poor students an alternative to the city’s underperforming public school system, teachers unions and other opponents say it draws sorely needed money away from the public system.

Lawmakers opposed to the program succeeded in eliminating it after Sen. Dick Durbin, D-Ill. — who could not be reached for comment Tuesday — attached an amendment to a 2009 spending bill. President Obama stepped in and agreed to allow students currently enrolled to graduate. But the program is no longer accepting new applicants.

Lindsey Burke, a Heritage Foundation analyst also on Boehner’s guest list, said she hopes the proposed legislation finds an audience on the Hill.

“We know that demand is very high for the program,” she said. She said there were four applicants for every available scholarship when the program was accepting students and that graduation rates were far better than in the public system.

Under the program, low-income parents in the District of Columbia were eligible for grants worth up to $7,500 annually to send their kids to private school. According to statistics provided by the Children and Youth Investment Trust Corporation, the average household participating in the program earned just over $25,000 a year. There are still more than 1,000 students enrolled in the Opportunity Scholarship Program.

Washington, D.C., has one of the most troubled public school systems in the country; its students consistently lag behind national averages on standardized testing. According to the scholarship program data, 93 percent of enrolled students would have otherwise attended an underperforming school in the District.

How much does it cost to provide a POOR education to one of these children?

Excerpt:

The most common per-pupil figure used for D.C. Public Schools is an estimated $13,000. That figure is used by all of Washington’s major daily newspapers – The Washington Times, The Washington Post and the Washington Examiner. Local radio and TV stations quote that number as well. But the actual dollar amount is $24,600 – which is “roughly $10,000 more than the average for area private schools,” as Andrew Coulson of the Cato Institute pointed out in his April 4 blog, “The Real Cost of Public Schools.”

Mr. Coulson did not use “new math” to come up with $24,600. He used simple arithmetic. Total funding for D.C. Public Schools this fiscal year (including federal dollars) was $1.216 billion. He divided that by the official enrollment figure of 49,422 and the sum became $24,606.

Also, Mr. Coulson averaged the published tuition costs for private schools in the region and came up with four figures: average tuition paid ($11,627); median tuition paid ($10,043); estimated average per-pupil spending ($14,534); and estimated median per-pupil spending ($12,534). Using simple math, we learned that average per-pupil spending at D.C. area private schools is $10,000 less than at D.C. Public Schools.

And more from the Washington Examiner.

Excerpt:

In a presentation at the Heritage Foundation, Dr. Patrick Wolf, a University of Arkansas researcher who has studied school choice programs, including OPS, for the Department of Education, said that the data shows that public charter schools and voucher programs educate a higher percentage of disadvantaged and minority children on average than traditional public schools.

About 90 percent of OPS recipients are African American and 9 percent are Hispanic, Wolf says, with 17 percent diagnosed with disabilities. Their families’ average income of $17,356 is well below the federal poverty line. But they still managed to do slightly better than their peers in the District’s public schools.

You can get better performance for much less money, even with more disadvantaged children – it just takes vouchers.

The money for the vouchers would naturally come from closing down the schools that cannot satisfy parents, who will use the voucher to go elsewhere to buy their children’s education. Instead of a monopoly where customers are forced to pay for a product they don’t want just because of where they live (because they are POOR and cannot afford to live elsewhere), parents will have a choice of where to send their children, and schools will have to compete to please parents by providing a good product to buy – a quality education. It will turn the public school system from a monopoly into a free market, where the customer (parents) will be king, and the children will benefit. Only underperforming teachers and their allies in the Democrat party stand to lose.

If Republicans take steps to enact robust school choice using voucher programs NOW, then propose a national voucher program in the 2012 election, then they will win the 2012. This is the winning issue. We need to put the children first and put the underperforming adults last.

Must-see videos on education policy

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