Pittsburgh Mayor Bill Peduto challenges the fundamental laws of economics with his latest attempt to have government command the economy.
The mayor wants City Council to pass an ordinance – and it likely will — requiring companies receiving professional services contracts to pay their full-time workers at least $15 an hour. It would apply to those receiving contracts worth at least $100,000 and paid entirely with city tax dollars.
Sayeth the mayor: “This is city taxpayer money and we want to make sure that we are encouraging the companies that bid on the work to provide basic income to the lowest-paid workers.”
Gee, how about giving taxpayers the best value for their bucks, Mr. Mayor?
Sayeth the mayor: “City government has the ability to choose many different factors of who it decides to do business with. I can’t think of anything more important than having an agreement that the lowest-paid workers … are adequately paid.”
Gee, how about allocating a scarce resource – taxpayer dollars – in the most efficacious manner possible?
Sayeth the mayor: The legislation “shows my commitment to making sure Pittsburgh remains a city in which everyone can afford to live comfortably through sustainable wages.”
Never mind that raising the cost of labor will raise the cost of doing business in the city, which, of course, raises the cost to taxpayers. That’s the definition of unsustainable.
One can only wonder how quickly the command economists will begin to complain about rising contract costs, then blame “greedy” contractors – forced to pay above-market wages by local government – for not eating those increased costs.
Local government has many proper functions. Setting wage rates for private businesses is not one of them.
Allegheny County Chief Executive Rich Fitzgerald just doesn’t get it.
In yet again declining to make public any of the details of the region’s bid to lure Amazon’s second headquarters to Pittsburgh, the ACE posed this question:
“Do the Steelers put their playbook out when they are playing the Patriots or the Ravens? No. They want to keep their plays secret. Why wouldn’t we do the same thing?”
Well, for one, it is not in the proper purview of elected official to play secrets with the prospective disbursement of public dollars.
Mayor Peduto’s chief of staff cites a non-disclosure agreement with Amazon; it’s that agreement that warrants such a hide-and-seek game, Kevin Acklin argues. But as the Post-Gazette reminds, that agreement is applicable only to “Amazon-related confidential information.”
Other cities and regions that have bid for what Amazon is calling “HQ2” have released information on their bids. And the gut feeling of those administering the commonwealth’s Right-to-Know Act say that, for the most part, such bids are public information.
It’s troubling enough that our elected leaders are attempting to yet again turn taxpayers into venture capitalists. But it’s simply unacceptable that Allegheny County and City of Pittsburgh officials are hiding the details.
Public officials. Public money. Public information. Period.
The National Football League, of which the Pittsburgh Steelers are a founding member of long standing, says it deserves a lucrative tax break because new stadiums create jobs.
The break the NFL so fears losing is one that allows teams to use tax-free bonds to build new stadiums.
But the scholarly literature is legion that the NFL’s plaint largely is without merit.
Just this past May, Scott A. Wolla, a Ph.D. economist with the Federal Reserve Bank of St. Louis, recounted a survey in which 83 percent of economists agreed that providing taxpayer subsidies to build stadiums for professional sports teams “is likely to cost the relevant taxpayers more than any local economic benefits that are generated.”
As Wolla concluded, economists “stress that the estimations of the economic impact of sports stadiums are exaggerated because they fail to recognize opportunity costs.”
“Consumers who spend money on sporting events would likely spend the money on other forms of entertainment, which has a similar economic impact,” he reminds.
Rather than subsidizing the quite wealthy barons of sport, Wolla says “government could finance other projects such as infrastructure or education that have the potential to increase productivity and economic growth.”
Sadly, such sound advice routinely is ignored. That this lesson continually goes unlearned is a disservice to sound public policy.
Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
