Just Economics succeeded in getting the City of Asheville to pass a living wage ordinance for city hires. It now wants the living wage to extend to persons contracted by the city. In her staff report, Brenda Mills said such an ordinance may be in violation of statutes for various situations, and the only application she felt with any certainty could be viable would be for lawn and maintenance contracts between $5000 and $30,000. Only five employers fell under this category.
The room was full of little ACORNs. I only say that because last year when this issue was discussed, the grassroots Just Economics of WNC had the same pamphlets on its web site as ACORN did. What was anticipated to be another ten degrees for the boiling frog or several of the camel’s body parts in the tent, turned out to be one of council’s finest hours.
Dr. Carl Mumpower said the words sound warm and fuzzy and they could make a politician feel like he is doing something magnanimous, but it would be an illusion. Proponents were ignoring what made America great and what separated it from other nations: a relatively free market. He added that people who have traveled around the world somewhat know the US enjoys a relatively high standard of living. However, government keeps trying to regulate it away.
A living wage was a special deal because taxpayers would have to spend their hard-earned income on paying people who contracted with the city more than others could afford to pay. Even minimum wage laws tend to harm those they try to help because people fare best when allowed to look out for and contract in accordance with their own interests.
Regulation doesn’t work. The United States is inundated with $15-20 million persons from third world countries who come here because employers want to pay them low wages under the table because they don’t feel they can afford a living wage. 50-75% of the black male population in this country drops out of high school because society feels it doesn’t need them. Employers can hire cheap labor from south of the border. The illegal pool of immigrants prevents teens, who don’t need a living wage for house payments, from getting entry-level training jobs.
That normally would have been it, except Kelly Miller said there were two theories of economics. One was espoused by Keynes, the other by Milton Friedman. Keynes’ philosophy failed in Russia and everywhere else it was tried. Thomas Sowell has commented on unintended consequences of minimum wage laws. When unemployment is high, as it is, people with master’s degrees will be lined up to get living wage jobs. Minimum wage laws hurt those they claim to help by glutting the market for low-skill jobs.
As if that wasn’t enough, Jan Davis added that, as one who has to make payroll for a small business, he knew people would not do business with the city because they’d have to let employees go, and then they’d be stuck with too few people to do a job. In this economy, with people losing jobs and healthcare costs escalating, it is the wrong time to tell people they have to pay more or get rid of employees.
Miller tried to hold discussion off for six months with a motion proposed by city staff. Instead, council decided to give the issue free range for the next, decidedly more progressive, city council.
