Tag: California

Should Low-Skill Workers Eat Cake?

Yesterday, the governors of California and New York signed legislation to raise their states’ minimum wage over the next few years to $15 an hour throughout California and much of New York. Similar proposals are percolating in other state and local governments, and Democratic presidential candidate Bernie Sanders has called for a national minimum wage of $15/hour.

Predictably, critics of raising the minimum wage are arguing that the higher wage floor will hurt employment for low-skill workers, the very people the wage floor is intended to help. A worker will be employed only if the value of his output is greater than the cost of employing him—a cost that includes wages, employer payroll taxes (e.g., Social Security, Medicare, unemployment insurance), training and outfitting costs, the new health care mandate and other benefits, etc. According to these opponents, the higher wage floor will reduce employment for low-skill workers and encourage employers to find non-labor ways to accomplish low-skill tasks (e.g., ATM machines, self-serve gas pumps, vending machines, automated phone answering systems).

Wage-increase supporters dismiss this concern, claiming there’s no proof that a higher wage floor hurts employment. A very large body of empirical research indicates otherwise, however, with the negative effects falling mainly on workers below age 25 (which isn’t surprising, as 77% of workers earning the federal minimum wage are below age 25, and they have few demonstrated work skills). Wage-increase supporters can argue the research isn’t unanimous, but given the one-sidedness of the extensive empirical evidence, that argument sounds a bit like climate change denial—if not creation science.

More thoughtful wage-increase supporters have begun offering a different argument: Yes, they concede, raising the minimum wage can hurt low-skill employment. But that harm is a worthwhile tradeoff for better wages for the remaining low-skill work: some workers may lose their jobs or some work hours, but others will get a raise.

This argument is important and interesting—in a Marie Antoinette* sort of way.

And on the Seventh Day You Can Rest (If You Want)

For 122 years, the California Labor Code has said that employees in all industries are “entitled” to a day of rest “one day therefrom in seven.” The statute also provides that “No employer shall cause his employees to work more than six days in seven.” Mendoza, a former Nordstrom employee, is arguing to the California Supreme Court that the Labor Code should be construed as flatly prohibiting employers from allowing an employee to work on the seventh day of a workweek. To make that argument work he must also convince the Court that the Labor Code prohibits employees from voluntarily choosing to work on a day otherwise scheduled for rest. This radically paternalistic argument not only flies in the face of the plain language of the statute, but it would hurt employees who may wish work on the seventh day of a workweek for innumerable reasons. In a brief filed in support of Nordstrom, Cato, joined by the National Federation of Independent Business, the Reason Foundation, and a handful of California employees, argues that there are many legitimate reasons why an employee might want to work on the seventh day of a workweek: to meet financial goals, to accommodate personal schedules, or simply to maintain flexibility to work when he wants.

Mendoza also argues that employers must require written waiver from employees before allowing them to work on the seventh day of a workweek. But nothing in the Labor Code suggests that there is any requirement for a waiver to be in writing, or for employers to maintain records whenever an employee should elect to work on a day otherwise scheduled for rest. We argue that it would be improper to read language into the statute that would impose such burdensome requirements on employers—both because it would violate first principles of statutory construction and because it would open unwitting businesses up to lawsuits. Moreover, such a paperwork requirement would be wholly impracticable when, for example, an exempt employee might choose to check a few emails on a Sunday evening, something that could be construed to violate the day of rest law.

Finally, we argue that the plaintiff advocates a theory that would hold his employer liable for conduct that California state regulators had long permitted in official agency guidance. Just as there would be significant due process concerns with Congress passing a statute to retroactively hold businesses liable for conduct that was permissible at the time, there would be serious constitutional problems with giving a statute a retroactive interpretation that would impose ruinous penalties on individuals or businesses that acted in good faith reliance on best available guidance at the time. The California Supreme Court should not heed Mendoza’s paternalistic arguments and upset 122 years of treating California’s workers like responsible adults.

Supreme Court to Consider Ending Forced Public-Sector Union Dues

Today, the U.S. Supreme Court announced that it would hear Friedrichs v. California Teachers Association, which asks the court to consider whether compulsory public-sector union dues violate the First Amendment right to free speech–which includes the right to be free from compulsory speech. The Cato Institute filed an amicus brief supporting the petitioners’ request that SCOTUS hear the case.

In 26 states, public-sector unions can force non-members to pay dues anyway. As I noted last year: 

The unions contend that these compulsory dues are necessary to overcome the free rider problem (non-union members may benefit from the collectively-bargained wages and benefits without contributing to the union), but plaintiffs in Friedrichs v. California Teachers Association point out that numerous organizations engage in activities (e.g. – lobbying) that benefit members and non-members alike without giving such organizations the right to coerce non-members to pay. That’s especially true when the individuals who supposedly benefit actually disagree with the position of the organization. 

Big Brother Wants to Watch You Drive

In 2008, the Washington legislature passed a law mandating a 50 percent reduction in per capita driving by 2050. California and Oregon laws or regulations have similar but somewhat less draconian targets.

The Obama administration wants to mandate that all new cars come equipped with vehicle-to-infrastructure communications, so the car can send signals to and receive messages from street lights and other infrastructure.

Now the California Air Resources Board is considering regulations requiring that all cars monitor their owners’ driving habits, including but not limited to how many miles they drive, how much fuel they use, and how much pollution or greenhouse gases they emit.

Put these all together and you have a system in which the government will not only know where your vehicle is at all times, but can turn off your vehicle if it decides you are driving too much or driving in a way that emits too many grams of carbon dioxide or is otherwise offensive to some bureaucratic imperative.

I sometimes think privacy advocates are a paranoid bunch, seeing men in black around every corner and surveillance helicopters or drones in the air at all times. On the other hand, if a technology is available–such as the ability to record cell phone calls–the government has proven it will use it.

Consider all of the lovable progressives out there who think the government should “punish climate change liars,” meaning people who have differing opinions on scientific issues. It’s not much a stretch to think that, any time they happen to be in power, they will use the available technology to make people stop driving. After all, just how important can that extra trip to the supermarket be compared to the absolute imperative of preventing the seas from rising a quadrillionth of an inch?

Of course, the elected officials and bureaucrats who run this system will exempt themselves from the rules. After all, nothing is more important than their work of running the country and making sure people don’t abuse their freedom by engaging in too much mobility.

As California writer Steven Greenhut points out, we already have red-light cameras, and some “eastern states have suspended drivers from using toll lanes after their transponders showed them to be speeders.” They’re not invading our privacy, the greens will argue, they are just making sure that our actions aren’t harming Mother Earth.

Of course, for many it really isn’t about greenhouse gas emissions. Mobility allows (or, as anti-auto groups would say, forces) people to living in low-density “sprawl” where they can escape taxation by cities eager to subsidize stadiums, convention centers, and light-rail lines. All they have to do is ramp down people’s monthly driving rations–something like a cap-and-trade system that steadily reduces the caps–and suburbanites will eventually find that they have to move back to the cities.

No doubt some will argue that even those who drive the most fuel-efficient cars should be subject to the same driving limits because suburban homes waste energy too. Or that people will be safer from terrorists if they are all jammed together in cities close to emergency facilities than if they are spread across the countryside. Or that suburbanites are parasites on the cities and should be reassimilated back into the cities’ benign embrace and taxing districts.

Whatever the argument, the point is that if the technology is there, the government will use it. If people really want to buy cars that monitor their every move and are capable of communicating those moves to some central infrastructure, they should be allowed to do so. But allowing the government to mandate these things is simply asking to have well-meaning, and sometimes not-so-well-meaning, government bureaucrats control how we travel and where we live.

Krugman’s ‘Gotcha’ Moment Leaves Something to Be Desired

I’ve had some fun over the years by pointing out that Paul Krugman has butchered numbers when writing about fiscal policy in nations such as FranceEstoniaGermany, and the United Kingdom.

So I shouldn’t be surprised that he wants to catch me making an error. But I’m not sure his “gotcha” moment is very persuasive. Here’s some of what he wrote for today’s New York Times.

Gov. Jerry Brown was able to push through a modestly liberal agenda of higher taxes, spending increases and a rise in the minimum wage. California also moved enthusiastically to implement Obamacare. …Needless to say, conservatives predicted doom. …Daniel J. Mitchell of the Cato Institute declared that by voting for Proposition 30, which authorized those tax increases, “the looters and moochers of the Golden State” (yes, they really do think they’re living in an Ayn Rand novel) were committing “economic suicide.”

Kudos to Krugman for having read Atlas Shrugged, or for at least knowing that Rand sometimes referred to “looters and moochers.” Though I have to subtract points because he thinks I’m a conservative rather than a libertarian.

But what about his characterization of my position? Well, he’s right, though I’m predicting slow-motion suicide. Voting for a tax hike isn’t akin to jumping off the Golden Gate bridge. Instead, by further penalizing success and expanding the burden of government, California is engaging in the economic equivalent of smoking four packs of cigarettes every day instead of three and one-half packs.

Can Litigation Save American Education?

Next week, the case of Vergara v. California goes to trial. The question being litigated is whether or not the state’s laws on teacher tenure (“permanent employment”), dismissals, and last-in-first-out layoffs disproportionately harm poor minority kids, thereby violating California’s constitution.

Plaintiffs in the case feel they have the evidence to prove this point (see the links above), and so far the courts have acknowledged that their view is at least plausible. Certainly these laws are incompatible with efforts to maximize the quality of the teaching workforce. And it does seem as though they do the most damage in districts and schools serving the most disadvantaged kids. But will a victory by the plaintiffs in this lawsuit do substantial and lasting good?

That’s less obvious. For one thing, these employment practices can be found in many places where they are not codified in state statutes.They are employment guarantees and benefits of the sort that are often sought and obtained by teachers’ unions in collective bargaining with districts. So getting rid of the laws won’t necessarily get rid of the practices.

More broadly, over a dozen states have explicit constitutional provisions demanding that they create “uniform” education systems—a more stringent equality requirement than is contained in California’s constitution—and it’s not at all obvious that this seemingly strict legal guarantee has made any difference in the quality of educational opportunity in those states.

It’s easy to empathize with the desire to see state legal precedents enforced, and bad laws overturned. But neither state constitutions nor legal precedents have been able to secure either the uniformity or the quality of American education systems, and there is no reason to expect that to change no matter how the Vergara case is decided. More than half a century after the victory in Brown v. Board of Education, poor African-American kids are  still disproportionately likely to be assigned to lousy schools. I wrote about this 11 years ago, and little has changed since then. Lawsuits can redress specific legal wrongs, like compelled segregation, but they can’t produce educational outcomes that require the coordination and relentless dedication of thousands or even millions of people, year after year.

For those who really want to maximize the quality of education offered to disadvantaged and minority students—indeed to all students—the best hope is to study the different sorts of education systems that have been tried around the world and across history, and then ensure universal access to the best among them: a free educational marketplace.


California Thinks Your Time Is Worthless

California’s S.B. 375 mandates that cities increase the population densities of targeted neighborhoods because everyone knows that people drive less in higher densities and transit-oriented developments relieve congestion. One problem, however, is that transportation models reveal that increased densities actually increase congestion, as measured by “level of service,” which measures traffic as a percent of a roadway’s capacity and which in turn can be used to estimate the hours of delay people suffer.

The California legislature has come up with a solution: S.B. 743, which exempts cities from having to calculate and disclose levels of service in their environmental impact reports for densification projects. Instead, the law requires planners to come up with alternative measures of the impacts of densification.

On Monday, December 30, the Governor’s Office of Planning and Research released a “preliminary evaluation of alternative methods of transportation analysis. The document notes that one problem with trying to measure levels of service is that it is “difficult and expensive to calculate.” Well, boo hoo. Life is complicated, and if you want to centrally plan society, you can either deal with difficult and expensive measurement problems, or you will botch things up even worse than if you do deal with those problems.

The paper also argues that measuring congestion leads people to want projects that might actually relieve congestion, such as increasing roadway capacities. This would be bad, says the paper, because increased capacities might simply “induce” more travel. The fact that such increased travel might actually produce some economic benefits for the state is ignored. Instead, suppressing travel (and therefore suppressing economic productivity) should be the goal.

The document suggests five alternative measures of the impacts of densfication on transportation:

  1. Vehicle miles traveled;
  2. Auto trips generated;
  3. Multi-model level of service;
  4. Auto fuel use; and
  5. Motor vehicle hours traveled.

There are many problems with these alternatives. First, they really aren’t any simpler to reliably calculate than levels of service. Second, they ignore the impact on people’s time and lives: if densification reduces per capita vehicle miles traveled by 1 percent, planners will regard it as a victory even if the other 99 percent of travel is slowed by millions of hours per year. Third, despite the “multi-modal” measure, these measures ignore the environmental impacts of transit. For example, they propose to estimate automotive fuel consumption, but ignore transit energy consumption.

Worst of all, the final “measure” proposed by state planners is to simply presume, without making any estimates, that there is no significant transportation impact from densification. After all, if you add one vehicle to a congested highway and traffic bogs down, can you blame that one vehicle, or is everyone else equally to blame? If the latter, then it seems ridiculous, at least to the planners, to blame densification for increased congestion when the existing residents contribute to the congestion as well. By the same token, if an airplane is full, and one more person wants to take that flight, then the airline should punish everyone who is already on board by simply delaying the plane until someone voluntarily gets off.

The real problem is that planners and planning enthusiasts in the legislature don’t like the results of their own plans, so they simply want to ignore them. What good is an environmental impact report process if the legislature mandates that any impacts it doesn’t like should simply not be evaluated in that process?

All of this is a predictable outcome of attempts to improve peoples’ lives through planning. Planners can’t deal with complexity, so they oversimplify. Planners can’t deal with letting people make their own decisions, so they try to constrict those decisions. Planners can’t imagine that anyone wants to live any way but the way planners think they should live, so they ignore the 80 to 90 percent who drive and want to live in single-family homes as they impose their lifestyle ideologies on as many people as possible. The result is the planning disaster known as California.