Economic truths

Economic truths

Organized labor and its government skid-greasers in Southwestern Pennsylvania and across the commonwealth long have advocated for an ever-higher state minimum wage.

Now set at $7.25 hourly, the Democrat Wolf administration would like to raise it, in phases, to $15. Even some in the Republican-controlled General Assembly have indicated they’d entertain an increase, though not nearly as high as the administration’s proposal.

But before anyone in state government forms a union of lemmings to jump off that cliff, they should consider into what they’d be jumping. Let’s call it the Sea of Economic Reality.

You might recall how Internet retailing giant Amazon – roundly criticized for driving brick-and-mortar retail (large and small) out of business – was granted a modicum of redemption by “progressives” when, effective last Nov. 1, it enacted a $15 hourly wage floor for all its Whole Foods employees.

Other employees were given $1 hourly raises while “team leaders” were given raises of $2 an hour. (Which, by the way, is proof that arbitrarily setting a wage floor pressures existing higher pay rates even higher.)

Of course, something else happens that is most axiomatic when wages are raised arbitrarily and not based on productivity. Yes, class, that’s right – reduced hours and/or fewer jobs.

The Guardian newspaper in England reports that Whole Foods employees have told it “they have experienced widespread cuts that have reduced schedule shifts across many stores, often negating wage gains for employees.”

And the reductions hardly have been insignificant. The newspaper cites the experiences of Whole Foods employees in Oregon, Illinois and Maryland. The most graphic example came in Illinois where an employee told The Guardian that part-time hours were slashed from 30 to 21 hours weekly.

The laws of economics are immutable. Arbitrary actions, those not based on sound economics, have deleterious consequences. It’s that basic. It’s that simple. It’s that fundamental.

The Post-Gazette reports that Highwoods Properties of Raleigh, N.C., is seeking a $10 million state Redevelopment Assistance Capital Program grant to construct an office building at an undisclosed location in downtown Pittsburgh.

A second developer, McKnight Realty Partners, is seeking $5 million from the same program to, as the P-G reports it, “redevelop what it is calling a ‘high-profile building’ Downtown for offices, retail and restaurants.”

A company spokesman declined to identify the building citing a nondisclosure agreement.

Hold the phone! Why should taxpayers have any skin in these games? Worse, where’s the propriety in demanding public subsidies but shielding the projects from public scrutiny? There is none.

Public officials long have turned omission into an art form. The latest case in point comes in a recent radio interview in which a former Pennsylvania Department of Transportation regional press secretary who’s now a state representative whistled past the graveyard of the real problem facing the Pennsylvania Turnpike Commission and its massive $11 billion debt.

The Turnpike Commission has been forced to borrow heavily to meet the terms of a state mandate that hundreds of millions of dollars in turnpike proceeds be delivered annually to pay for non-turnpike highway projects and mass transit. That’s in direct contravention of federal law and, based on that, now the subject of a lawsuit by two turnpike-using groups, including truckers.

The Turnpike Commission has suspended any payments to PennDOT pending the outcome of the lawsuit. That, in turn, has created a funding crunch for these “public purpose” sucker fish.

But the PennDOT flack turned legislator more than intimated that the problem somehow was created by the Turnpike Commission. And that was a gross misrepresentation of the public policy matter at hand.

Granted, the commission has had its share of problems and scandals over the years. But this mess was created by greedy pols and highways and mass transit officials who view turnpike operations as a perpetually filled dairy cow’s udder.

By all means, let’s discuss the matter. But let’s employ all the facts in the process.

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).