Economics ‘boobris’

Economics ‘boobris’

Those bereft of economics understanding have been hailing Gov. Tom Wolf’s decision to increase the earnings threshold for which salaried employees must be paid overtime.

Currently, salaried employees who make up to $23,600 annually are eligible for overtime. But by Jan. 1, 2022, that threshold will rise to $47,892.

“This … will put more money into the pockets of hardworking people and will help expand the middle class in Pennsylvania,” the governor said.

That sentiment was echoed by Allegheny County Chief Executive Rich Fitzgerald. “We know that the confidence (beneficiaries of the higher threshold will experience) will result in money being spent in their local communities, which benefits us all,” he said.

Never mind that the more likely result will be some salaried workers returned to hourly status and see their hours reduced. And never mind that some social service nonprofits would not be able to afford the increase, which could lead to a decrease in their good works.

Some “government beneficence,” eh?

Here’s a pretty stark object lesson in the perils of government using public dollars to fund private industry, from the Wisconsin State Journal:

“A newly released memo projects the public cost for a planned Foxconn manufacturing plant near Racine could near $4.5 billion – nearly 50 percent more than the $3 billion cost initially cited by the project’s chief proponent at the state Capitol, Gov. Scott Walker.”

Those costs are said to reflect the cost to state taxpayers, largely through tax credits, over 15 years, and costs to local taxpayers near the site.

Foxconn is a Taiwanese company. It is promising to build a $10 billion liquid-crystal display plant that will create up to 13,000 jobs.

The same memo, from Wisconsin’s nonpartisan Legislative Fiscal Bureau, also notes that Foxconn likely would not have located in Wisconsin without the public incentives.

But why should such projects be like a bogus sweepstakes in which participants have to pay a premium for their “prize”? No matter the touted “benefits” – typically oversold – taxpayers all too regularly are improperly turned into venture capitalists by their “leaders.”

The bottom line remains this: That’s never acceptable.

Could Amazon be Pittsburgh’s Foxconn? A Post-Gazette story ponders if the Internet retailing giant, already armed with bids from a long list of 20 finalists to host its second headquarters outside of Seattle, will squeeze those finalists for even more freebies.

From the newspaper story:

“Greg LeRoy, executive director of Good Jobs First, a Washington, D.C.-based nonprofit promoting accountability in economic development, fears that round 2 of the Amazon sweepstakes will pressure cities and states ‘to give away more of the store.’”

Of course, Pittsburghers haven’t even been extended the courtesy to know what public resources city and Allegheny County officials have pledged to Amazon.

And county ACE Fitzgerald continues to refuse to release what clearly is public information.

“I talk to developers every day. Those discussions aren’t public,” he told the P-G. “This won’t be either. Discussions will be private until we make an agreement. At that point, they will become public.”

But those discussions with developers should be public. Just as the discussions with Amazon should be. If public money is being pledged in any form, the public has a right to know beforehand, not after the fact.

The public – you know, the people who pay for these schemes – have every right to full transparency. To claim otherwise is “boobris,” a dopey arrogance that considers the tax-paying public to be nothing but the Menckenian “booboisie” – supposedly stupid, uneducated and somehow to be disrespected for being “unaware” that “government knows best.”

The public can ill afford such perverted public policy.

Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).