What we can see here is exactly what Randall O’Toole of Cato has been saying for years — that light rail projects tend to actually hurt total transit use as they scavenge resources from other modes, like buses. This is because light rail costs so much more to move a passenger, both in terms of capital investment and operating cost, so $X shifted from buses to rail reduces total system capacity and ridership substantially. We have seen this in Phoenix, as light rail costs have forced closing or reduced services in a number of bus routes, with obvious results in the ridership numbers.
[…]
The problem with light rail (and the reason it is popular with government officials) is that it is an upper middle class boondoggle. There can be no higher use of transit than to provide mobility to poorer people who can’t afford reliable automobiles. Buses fulfill this goal better than any mode of transit. They are flexible and can reach into many corners of the city. The problem with buses, from the perspective of government officials, is that upper middle class people don’t like to ride on them. They like trains. So the government builds hugely expensive trains for these influential, wealthier voters. Since the trains are so expensive, the government can only build a few routes, so those routes end up being down upper middle class commuting corridors. As the costs mount for the trains, the bus routes that serve the poor and their dispersed commuting destinations are steadily cut.
Warren Meyer, “Phoenix Light Rail Fail, 2019 Update”, Coyote Blog, 2019-11-13.
December 17, 2020
QotD: Light rail systems are almost always an upper middle class boondoggle
December 16, 2020
QotD: Distorting the history of America’s “Gilded Age”
To some extent, during the late 1800s — a period historians call the “Gilded Age” — American politicians learned from the past. They had dabbled in federal subsidies from steamships to transcontinental railroads, and those experiments dismally failed. Politicians then turned to free markets as a better strategy for economic development. The world-dominating achievements of Cornelius Vanderbilt, James J. Hill, John D. Rockefeller, and Charles Schwab validated America’s unprecedented limited government. And when politicians sometimes veered off course later with government interventions for tariffs, high income taxes, anti-trust laws, and an effort to run a steel plant to make armor for war — the results again often hindered American economic progress. Free markets worked well; government intervention usually failed.
Why is it, then, that for so many years, most historians have been teaching the opposite lesson? They have made no distinction between political entrepreneurs, who tried to succeed through federal aid, and market entrepreneurs, who avoided subsidies and sought to create better products at lower prices. Instead, most historians have preached that many, if not all, entrepreneurs were “robber barons”. They did not enrich the U.S. with their investments; instead, they bilked the public and corrupted political and economic life in America. Therefore, government intervention in the economy was needed to save the country from these greedy businessmen.
Burton W. Folsum, “How the Myth of the ‘Robber Barons’ Began — and Why It Persists”, Foundation for Economic Education, 2018-09-21.
December 14, 2020
QotD: Goodhart’s law
Any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes.
Or as it has been reformulated:
Goodhart’s law is an adage named after economist Charles Goodhart, which has been phrased by Marilyn Strathern as: “When a measure becomes a target, it ceases to be a good measure.” One way in which this can occur is individuals trying to anticipate the effect of a policy and then taking actions which alter its outcome.
Set a target for tonnes of shoes and you get one tonne shoes. Set a target for 100 shoes and you get 100 left feet. Set a target for being on time and people fiddle their definition of time.
It is, by the way, entirely fine to insist that airlines play fair with telling us how long a flight will take. You said it will take 4 hours, then 4 hours should be about the time it takes. Yes, sure, we understand, airports, crowded places. Idiot passengers forget to board, luggage must be taken off. Winds vary, thunderstorms happen, French air traffic controllers actually turn up to work today, their one day in seven. Sure, there’re lots of variables. But if you say it’s about four hours then it should be about four hours. Great.
But to complain that they pad their number a bit is ludicrous. We’re holding their feet to the fire, insisting that an underestimate will lead to financial costs. Thus, obviously, they will overestimate. That’s not really even Goodhart’s Law, that’s just human beings. But then, as we know, those who would plan everything don’t deal well with the existence of people, do they?
Tim Worstall, “Goodhart’s Law Applies To Economies, To Everything – Why Not Scheduled Airline Flight Times?”, Continental Telegraph, 2018-08-27.
December 13, 2020
How the Romans Stole Silk Production Secrets from China
Kings and Generals
Published 31 Jan 2019Go to https://www.wix.com/KingsAndGenerals to get started on your website today!
Check out our new website at http://kingsandgenerals.orgSilk production was one of the biggest secrets of China and one of the most lucrative industries of the age. So it is not a surprise that the Roman emperor Justinian was eager to learn this secret. In this video we will discuss the start of the silk production, its importance and the story of how Justinian managed one of the first industrial thefts in history
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December 12, 2020
Trains and Oil | California History [ep.8]
The Cynical Historian
Published 4 Jul 2019After a long hiatus, here is the return of the History of California series. For those who haven’t seen the previous episodes, here’s the playlist: https://www.youtube.com/playlist?list…
Today we’re going over the history of transcontinental railroads, monopolistic practices, and crude oil production in California.
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references:
eds. Richard Francaviglia and David Narrett, Essays on the Changing Images of the Southwest (Arlington: University of Texas at Arlington, 1994). https://amzn.to/2JwNiHkWilliam H. Goetzmann, Army Exploration in the American West, 1803-1863, new ed. (1959; Lincoln: University of Nebraska, 1979). https://amzn.to/2K8tslY
Paul Sabin, Crude Politics: The California Oil Market, 1900-1940 (Berkeley: University of California Press, 2005). https://amzn.to/2W16gtt
Jules Tygiel, The Great Los Angeles Swindle: Oil, Stocks, and Scandal During the Roaring Twenties (Berkeley: University of California Press, 1996). https://amzn.to/2ASH7Z0
Richard White, Railroaded: The Transcontinentals and the Making of Modern America (New York: W.W. Norton, 2011). https://amzn.to/2zkURO3
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Wiki: The history of the Southern Pacific stretches from 1865 to 1998. For the main page, see Southern Pacific Transportation Company; for the former holding company, see Southern Pacific Rail Corporation. The Southern Pacific was represented by three railroads. The original company was called Southern Pacific Railroad, the second was called Southern Pacific Company and the third was called Southern Pacific Transportation Company. The third Southern Pacific railroad, the Southern Pacific Transportation Company, is now operating as the current incarnation of the Union Pacific Railroad.The story of oil production in California began in the late 19th century. In 1903, California became the leading oil-producing state in the US, and traded the number one position back-and forth with Oklahoma through the year 1930. As of 2012, California was the nation’s third most prolific oil-producing state, behind only Texas and North Dakota. In the past century, California’s oil industry grew to become the state’s number one GDP export and one of the most profitable industries in the region. The history of oil in the state of California, however, dates back much earlier than the 19th century. For thousands of years prior to European settlement in America, Native Americans in the California territory excavated oil seeps. By the mid-19th century, American geologists discovered the vast oil reserves in California and began mass drilling in the Western Territory. While California’s production of excavated oil increased significantly during the early 20th century, the accelerated drilling resulted in an overproduction of the commodity, and the federal government unsuccessfully made several attempts to regulate the oil market.
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Hashtags: #history #California #trains #oil
November 29, 2020
QotD: The succession problem of totalitarian leadership
There were two main reasons for the decline, both structural. The first, of course, is Communism itself. A totally ideologized society is a society totally committed to make-believe. You could fill a good-sized book listing the catastrophes make-believe caused the USSR. Just to take the most obvious: Hitler did everything but send the Goodyear Blimp over Moscow, towing a banner announcing his invasion plans. But since everyone who accurately reported the goings-on in Poland ended up in the Gulag, the Wehrmacht walked right on in.
The second has to do with the nature of totalitarian leadership. Obviously sharing power is out of the question, so every Boss who finally claws his way to the top ruthlessly purges everyone who could conceivably challenge him. The purged are replaced by yes-men and toadies, who immediately enact mini-purges of their own inside their new departments. It doesn’t take more than a few rounds of this for smarter functionaries to learn to dig themselves in very, very deep, disguising themselves in a kind of protective stupidity. A few more rounds, and “protective stupidity” drops the modifier, as anyone with anything on the ball has decamped for the safer — and, not coincidentally, very soon much more profitable — havens of technical management.
It doesn’t take long before your “leadership” is nothing but ideology-addled dimbulbs. Sound familiar?
Severian, “How Dumb Are Liberals?”, Rotten Chestnuts, 2020-07-31.
November 24, 2020
The History of Fabric Is the History of Civilization
ReasonTV
Published 23 Nov 2020Virginia Postrel’s new book explores economics, politics, and technology through textiles.
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Full text and links: https://reason.com/video/2020/11/23/t…Follow us on Twitter: https://twitter.com/reason
Reason is the planet’s leading source of news, politics, and culture from a libertarian perspective. Go to reason.com for a point of view you won’t get from legacy media and old left-right opinion magazines.
—————-The Fabric of Civilization: How Textiles Made the World, a new book by former Reason editor in chief Virginia Postrel, is a rich, endlessly fascinating history of the remarkable luck, invention, and innovation that made our fabric-rich world possible.
The book aims to make the mundane miraculous. Consider cotton. Most of the cotton we grow today is descended in part from a plant species that evolved in Africa and somehow got over to what is now Peru, where it mixed with New World strains.
“The fact that we have cotton at all, that it exists anywhere, is amazing,” says Postrel. “It happened long before there were human beings, but much more recently than when the continents were together. So we don’t know. It could have gotten caught up in a hurricane. It could have floated on a piece of pumice. So it’s this random, very unlikely happening that had tremendous world-changing consequences.”
The story of textiles is rife with attempts at protectionism and prohibition. In 17th and 18th century Europe, countries banned the importation of super-soft, super-colorful cotton prints from India known as calicos because they threatened domestic producers of everything from lower-quality cotton fabric to luxury silks. “For 73 years, France treated calico the way the U.S. treats cocaine,” Postrel says. “There was this huge amount of smuggling, and they were constantly ratcheting up the penalties [so] that they got quite grotesque, at least for the major traffic.” Some of “the earliest writings of classical liberalism are in this context, people saying not only is this not working, but … it is unjust to be sentencing people to the galleys in order to protect silk makers’ profits.”
Postrel also documents how the Luddites, the 19th century English textile workers famous for smashing the power looms threatening to put them out of work, owed their jobs to an earlier technological breakthrough: the spinning machines that emerged in the late 1700s.
“If you go back to that earlier period, when spinning machines were introduced, the same thing happened,” she says. “They had their own period of rebelling against the new technologies and saying they’re putting people out of work.”
The book also upends some contemporary myths, such as the claim that commercial production of hemp for clothing was a casualty of the war on drugs. “Hemp historically was a very coarse kind of fabric for poor people who didn’t have an alternative,” says Postrel. “It was replaced by cotton for good reasons. Cotton was also affordable, but it was soft and washable and just a much better fabric.”
“Human beings live in history and we inherit the legacies, positive and negative, of that history,” says Postrel, whose previous books include The Power of Glamour, The Substance of Style, and The Future and Its Enemies. Discussing the large themes of her work she says, “All you can do is start from where you are and try to do better from where you are.”
Narrated by Nick Gillespie. Edited by Isaac Reese.
Music: “Thoughts,” by ANBR
Photos: World History Archive/Newscom; The Print Collector Heritage Images/Newsroom; The “Réale” returning to port, Med/CC BY-SA 3.0; Smithsonian National Museum of African American History and Culture/CC0; Battle of Grand Port, Rama/Wikimedia Commons/CC BY-SA 2.0 FR; Fine Art Images Heritage Images/Newscom; Seton, M., Müller, R., Zahirovic, S., Gaina, C., Torsvik, T., Shephard, G., Talsma, A., Gurnis, M., Turner, M., Maus, S., and Chandler, M., 2012, Global continental and ocean basin reconstructions since 200 Ma: Earth-Science Reviews, v. 113, no. 3-4, p. 212-270
QotD: Canada’s economic Stockholm Syndrome
We’re stuck with a system in which producer interests — most notoriously the dairy cartel that operates under the name of “supply management” — hold the rest of us hostage. Dismantling the dairy cartel is an act that would significantly increase consumers’ buying power, but this is a measure that the Conservatives have all but ruled out under any circumstances, and the NDP has made maintaining the cartel a condition for supporting any sort of trade agreement.
Why would the [major parties] stubbornly insist on sticking to a policy that makes consumers worse off at the expense of producers? Because it’s a popular position. It’s one of the marvels of the Canadian electorate. Show Canadians a special interest group that uses its government-granted privileges to fleece consumers, and they’ll embrace it as a “national champion,” a “uniquely Canadian way of life” or some equally vapid catch-phrase.
This is from the Wikipedia entry for Stockholm Syndrome:
Stockholm syndrome, or capture–bonding, is a psychological phenomenon in which hostages express empathy and sympathy and have positive feelings toward their captors, sometimes to the point of defending them.
What we suffer from is the economic policy equivalent. Call it “Canada Syndrome”: a tendency for consumers to identify with the producer interests that are holding them hostage.
Stephen Gordon, “Our Stockholm Syndrome about supply management”, Maclean’s, 2013-03-05.
November 21, 2020
Schwebebahn: Why Wuppertal’s Trains Are Much Cooler Than Yours
The Tim Traveller
Published 12 Apr 2018Wuppertal has possibly the world’s most badass public transport: a 120-year-old swingin’ suspension railway. But the question is: why? When everyone else was busy building trams and undergrounds, what made Wuppertal say “NOPE”, and build this instead?
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Tom Scott Video:
https://www.youtube.com/watch?v=F4KZL…Kaiserwagen photo:
By Own work – JuergenG, CC BY-SA 3.0, https://commons.wikimedia.org/w/index…
From the comments:
The Tim Traveller
10 months ago
Hi all – just a quick note on this video: I think a few people are mishearing me at 0:43 where I say this is “the world’s oldest suspension railway… it’s also one of the world’s only suspension railways”. I did not call it “the world’s only suspension railway” — there are others, including one not too far away from here at Düsseldorf Airport, another in Memphis, US, and some more in Japan. TLDR: it’s the oldest one but not the only one. Thank you for your attention 🙂
November 20, 2020
The political danger if the “chumps” unite
In City Journal, James B. Meigs describes what he calls the “Chump Effect” in American politics:
Senator Elizabeth Warren speaking at the Iowa Democrats Hall of Fame Celebration in Cedar Rapids, Iowa, on 9 June, 2019.
Photo by Lorie Shaull via Wikimedia Commons.
Last January, a small but telling exchange took place at an Elizabeth Warren campaign event in Grimes, Iowa. At the time, Warren was attracting support from the Democratic Party’s left flank, with her bulging portfolio of progressive proposals. “Warren Has a Plan for That” read her campaign T-shirts. The biggest buzz surrounded her $1.25 trillion plan to pay off student-loan debt for most Americans.
A man approached Warren with a question. “My daughter is getting out of school. I’ve saved all my money [so that] she doesn’t have any student loans. Am I going to get my money back?”
“Of course not,” Warren replied.
“So you’re going to pay for people who didn’t save any money, and those of us who did the right thing get screwed?”
A video of the exchange went viral. It summed up the frustration many feel over the way progressive policies so often benefit select groups, while subtly undermining others. Saving money to send your children to college used to be considered a hallmark of middle-class responsibility. By subsidizing people who run up large debts, Warren’s policy would penalize those who took that responsibility seriously. “You’re laughing at me,” the man said, when Warren seemed to wave off his concerns. “That’s exactly what you’re doing. We did the right thing and we get screwed.”
That father was expressing an emotion growing more common these days: he felt like a chump. Feeling like a chump doesn’t just mean being upset that your taxes are rising or annoyed that you’re missing out on some windfall. It’s more visceral than that. People feel like chumps when they believe that they’ve played a game by the rules, only to discover that the game is rigged. Not only are they losing, they realize, but their good sportsmanship is being exploited. The players flouting the rules are the ones who get the trophy. Like that Iowa dad, the chumps of modern America feel that the life choices they’re most proud of — working hard, taking care of their families, being good citizens — aren’t just undervalued, but scorned.
The word “chump” probably derives from an ancient Norse term for a stump or large chunk of wood. The modern word “blockhead” comes to mind, which — no coincidence — was Lucy’s favorite label for the too-trusting Charlie Brown in the Peanuts comic strip. Lucy never tired of snatching away the football; Charlie fell for it every time. We all know the feeling: when you’re inching forward in the freeway exit lane, say, and another driver flies past and swerves onto the ramp at the last second; when your child has to complete her college-entrance exams within a designated time period, but your neighbor’s child gets twice as long because of a suddenly diagnosed “learning disability”; when you pay extra to have your pet travel in the airplane’s cargo hold but the yipping poodle across the aisle, an “emotional-support animal,” gets to ride on its owner’s lap for free. You didn’t know that you could get an emotional-support card just by claiming an anxiety disorder and paying a fee to an online agency? What are you — a chump?
November 17, 2020
“We are so well off here in the United States that our poverty line begins 31 times above the global average. Thirty. One. Times.”
Alyssa Ahlgren ponders the fact that we North Americans take our unprecedented-in-human-history prosperity very much for granted:
I’m sitting in a small coffee shop near Nokomis trying to think of what to write about. I scroll through my newsfeed on my phone looking at the latest headlines of Democratic candidates calling for policies to “fix” the so-called injustices of capitalism. I put my phone down and continue to look around.
I see people talking freely, working on their MacBooks, ordering food they get in an instant, seeing cars go by outside, and it dawned on me. We live in the most privileged time in the most prosperous nation and we’ve become completely blind to it. Vehicles, food, technology, freedom to associate with whom we choose.
These things are so ingrained in our American way of life we don’t give them a second thought. We are so well off here in the United States that our poverty line begins 31 times above the global average. Thirty. One. Times. Virtually no one in the United States is considered poor by global standards. Yet, in a time where we can order a product off Amazon with one click and have it at our doorstep the next day, we are unappreciative, unsatisfied, and ungrateful.
Our unappreciation is evident as the popularity of socialist policies among my generation continues to grow. Democratic Congresswoman Alexandria Ocasio-Cortez recently said to Newsweek talking about the millennial generation, “An entire generation, which is now becoming one of the largest electorates in America, came of age and never saw American prosperity.”
Never saw American prosperity. Let that sink in. When I first read that statement, I thought to myself, that was quite literally the most entitled and factually illiterate thing I’ve ever heard in my 26 years on this earth. Now, I’m not attributing Miss Ocasio-Cortez’s words to outright dishonesty. I do think she whole-heartedly believes the words she said to be true. Many young people agree with her, which is entirely misguided. My generation is being indoctrinated by a mainstream narrative to actually believe we have never seen prosperity. I know this first hand, I went to college, let’s just say I didn’t have the popular opinion, but I digress.
Let me lay down some universal truths really quick. The United States of America has lifted more people out of abject poverty, spread more freedom and democracy, and has created more innovation in technology and medicine than any other nation in human history. Not only that but our citizenry continually breaks world records with charitable donations, the rags to riches story is not only possible in America but not uncommon, we have the strongest purchasing power on earth, and we encompass 25 percent of the world’s GDP. The list goes on.
November 12, 2020
QotD: It’s impossible to plan the economy
Government is so ill-equipped to judge the future that it sold €6 billion’s worth of property off for £1.6 billion – that’s what we need to be true for that £4.5 billion loss, no? This is not a world in which we can trust government to plan our economy, is it?
And which government exists in reality? Well, the complaint is that second. And the people complaining are largely those who insist that we should act as if we’ve government of the first type. No, they don’t note the discord in that logic either. Governments aren’t very good at economic decisions therefore governments must make more economic decisions for us all. If you can manage to believe that you too can join the Labour Party.
Tim Worstall, “That Ministry Of Defence Housing Deal Proves It’s Impossible To Plan The Economy”, Continental Telegraph, 2018-07-13.
November 10, 2020
The amazing mental gymnastics that lead to the US Supreme Court’s unanimous decision in Wickard v. Filburn in 1942
Antony Davies and James R. Harrigan explain how a farmer growing wheat on his own land to feed his own cattle somehow transmogrified into an interstate commerce activity that could be regulated by the federal government:
Panorama of the west facade of United States Supreme Court Building at dusk in Washington, D.C., 10 October, 2011.
Photo by Joe Ravi via Wikimedia Commons.
… who ended up being tasked with deciding what Article One, Section Eight actually meant? Herein lies the wrinkle that enables all manner of constitutional mischief in the United States. The institution that ended up deciding what the federal government is empowered to do is itself a branch of the federal government. And it should come as no surprise that when push comes to shove, the Supreme Court routinely finds in favor of empowering the federal government.
This sort of mischief flowered fully in the decade following ratification of the 21st Amendment. In 1942, the Supreme Court decided a case, Wickard v. Filburn, in which farmer Roscoe Filburn ran afoul of a federal law that limited how much wheat he was allowed to grow.
A careful reader might, and should, ask where the federal government’s right to legislate the wheat market is to be found — because the word “wheat” is nowhere to be found in the Constitution. Be that as it may, the federal government’s aim was clear enough. It was to keep the price of wheat high enough for farmers to remain profitable. The Agricultural Adjustment Act of 1938 put an upper limit on how much wheat farmers were allowed to grow, which would serve to keep prices high by limiting supply.
Roscoe Filburn had grown 12 more acres of wheat than the law allowed. But not only did he not sell the excess wheat outside of his home state, but he also didn’t sell it at all. He used the wheat from those 12 acres to feed his cattle. Filburn was very clearly not engaging in commerce, let alone interstate commerce, yet the Supreme Court found (unanimously) that because Congress had the authority to regulate interstate commerce, Congress also had the authority to prohibit Filburn from growing those 12 acres of wheat for his own use. The Supreme Court’s “reasoning”?
Had Filburn not fed his cattle that excess wheat, he would have been forced to purchase wheat on the open market. And even if he purchased wheat that was grown within his home state, doing so would have made less wheat available within his home state for other wheat buyers. Consequently, some wheat buyers within his home state would then have had to buy wheat from outside the state. Therefore, Filburn’s non-commercial activity was, according to the Supreme Court, interstate commerce.
The mental gymnastics that went into this ruling made just about any activity interstate commerce by definition. Since Wickard, any time Congress has wanted to exercise power not authorized by the Constitution, lawmakers have simply had to make an argument that links whatever they want to accomplish to interstate commerce. Why? Because they know they can get away with it.
QotD: The Smartphone, the Eater-of-Gadgets
[…]
But in an entertaining inversion, one device of the future actually works on smartphones now. Because I thought it would be funny, I searched for “tricorder” in the Android market. For those of you who have been living in a hole since 1965, a tricorder is a fictional gadget from the Star Trek universe, an all-purpose sensor package carried by planetary survey parties. I expected a geek joke, a fancy mock-up with mildly impressive visuals and no actual function. I was utterly gobsmacked to discover instead that I had an arguably real tricorder in my hand.
Consider. My Nexus One includes a GPS, an accelerometer, a microphone, and a magnetometer. That is, sensors for location, magnetic field, gravitational fields, and acoustic energy. Hook a bit of visualization and spectral analysis to these sensors, and bugger me with a chainsaw if you don’t have a tricorder. A quad- or quintcorder, actually.
And these sensors are already completely stock on smartphones because sensor electronics is like any other kind; amortized over a large enough production run, their incremental cost approaches epsilon because most of their content is actually design information (cue the shade of Bucky Fuller talking about ephemeralization). Which in turn points at the fundamental reason the smartphone is Eater-of-Gadgets; because, as the tricorder app deftly illustrates, the sum of a computer and a bunch of sensors costing epsilon is so synergistically powerful that it can emulate not just real single-purpose gadgets but gadgets that previously existed only as science fiction!
[…]
I specified “personal” radios because radios have something in common with personal computers; their main design constraints are actually constraints on a peripheral stage. For a computer you’ll be using for hours at a time you really want a full-sized hard keyboard and a display bigger than a smartphone’s; for a really good radio, the kind you supply sound for a party with, you need speakers with resonant cavities that won’t fit in a smartphone enclosure.
Digital cameras are another diagnostic case. The low-end camera with small lenses is already looking like a goner; the survivors will be DSLRs and more generally those with precision optics too large and too expensive to fit in a phone case.
These two examples suggest Raymond’s Rule of Smartphone Subsumption: if neither the physics nor the ergonomics of a gadget’s function require peripherals larger than will fit in a smartphone case, the smartphone will eat it!
Eric S. Raymond, “Smartphone, the Eater-of-Gadgets”, Armed and Dangerous, 2010-07-16.
November 9, 2020
Maine conducts brave and daring experiment with an $18 per hour minimum wage
It’s a bold move, says Jon Miltimore, let’s see if it pays off:
While Florida, which on Tuesday passed a $15 an hour minimum wage referendum, was the only state to have the minimum wage on the ballot in 2020, some localities also voted on the issue.
One of those cities was Portland, the largest city in Maine. The referendum sought to increase the minimum wage from $12 an hour to $15 by 2024. The measure also mandated that workers receive time and a half during a civil emergency (like, say, a pandemic).
Despite opposition from the city’s mayor, seven members of the city council, and dozens of Portland businesses, the measure passed with 60 percent of the vote. That means as early as next month the minimum wage will be $18 an hour, since Maine has declared a civil emergency. (The time-and-a-half will kick in on the $12 minimum wage.)
Businesses already ravaged by stay-at-home orders from the coronavirus have expressed worry about how they will manage to stay in the black.
“In the last 7 months business has dropped from 30 to 50 percent and food costs have skyrocketed. This added increase on a business already depressed due to the pandemic is tough,” one Portland business owner who declined to speak on camera told WCSH, an NBC-affiliate. “We may have to either cut employee hours or cut back on business hours.”
Cutting employee hours is just one of the ways employers negatively respond to laws that artificially raise the price of labor. Other responses include cutting other forms of compensation, such as health care or 401k benefits, replacing workers with robots, and simply assigning employees to do more work.
These are hardly the only unintended consequences. For example, economists David Neumark and William Wascher found that higher minimum wages decrease the number of teens enrolled in high school because they encourage high-skilled teens to drop out; this in turn displaces low-skilled workers.
