Fact Based, Data Driven Policy

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  • #3922

    First, this:

    Laffer Curve test results

    The Laffer Curve theory says “tax rate cuts will always lead to more growth, employment, and income for citizens.” California raised taxes, Kansas cut them. Yet jobs grew twice as fast in California. Average wages also increased more in California.

    We’ve been implementing this in various forms since Reagan, and to this day, regressive economic policy bolstered by supply side economic theory remains dominant in the national dialog. But…

    …real world data does not support the theory. Various studies have shown that employment and income may both rise with increases in the minimum wage.

    The best data comes from counties that border one another but belong to different states, with one state raising its minimum wage and the other not.

    A rigorously designed analysis of 504 such bordering counties by economists found “strong earnings effects” — meaning workers were paid significantly more in those counties which raised minimum wages — with “no detectable employment losses from the kind of minimum wage increases we have seen in the United States.”

    We will get an excellent real world test of this once data become available breaking out the rest of California’s wealthy Santa Clara County from the county seat of San Jose, which raised its minimum wage $2 an hour to $10 last year and added 15-cents more this year.

    It is not enough to simply reiterate tired and failed ideas. The burden of proof rests with those who want to continue implementing them. We now have a lot of history we can look at to better understand the outcomes, and that history isn’t favorable at all.


    Ultimately, real world results trump theory. Actual changes in the number of jobs and what they pay should be used to set policy, not ideology, assumptions and expectations.

    Damn straight!

    Every single one of us should be calling for fact based, data driven policy. Actually learning from our history to better ourselves is a non-partisan, entirely American thing to do.

    And we want it better right? Or do we?

    Seems to me, the political dialog isn’t so much about better options. Not at all. Frankly, we understand those well enough to make progress.

    So why isn’t that happening?


    But but but but but.


    I was talking with a customer today who brings disadvanted children to their business to get them to do odd but rewarding jobs, like pruning and shaping shrubs. Some of these children have no concept of a work ethic because their parents and grandparents were on welfare and didn’t work. It’s nice that this man donates his time to help them gain some self esteem, and beyond sad that do-gooder price controls will lock them out from doing real work, making an income, gaining more self esteem, and eventually developing skills worthy of better pay. But it’s politically advantageous to have a persistent dependent class.


    The economic data does not support your policy preferences.

    Seems to me, this person is looking for free landscaping services, or very inexpensive ones.

    He can pay them, or do it himself, or pay another business for the upkeep on his property.

    Nothing builds a work ethic and self esteem like getting paid.

    They also are likely looking for more and better customers too.

    It really sucks to have so many people underpaid. Demand is low and price competition is fierce.

    They will enjoy the product of more and better able to pay for value types of demand and will make a nice profit on those better wages paid.


    F&B, if welfare pays so much, why aren’t you on it? You make it sound so glamorous and easy.


    From the point of view of the man who gives odd jobs to underprivileged youth, there is an element of risk. These youth might not do a good job, they might get hurt on the job, or they might act in unprofessional ways. In my opinion, the risk is mitigated because he is paying them less than what experienced workers would command. I imagine that he would have a breaking point, where he would say “screw it, I’m just hiring professionals.”

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