New Laws May Make 2023 a Year of Unintended Consequences
I love Jason Riley. I have every confidence in our government f-cking up everything they touch. RR had it right.
Ironically, I suspect many of this nation's young have great confidence in the meatheads in Washington! Ergo, they trust (equals want) them to fix "stuff". Getting batted around a bit by the exemplary hard-working men and women who inhabit Congress for another decade should fix that.
New Laws May Make 2023 a Year of Unintended Consequences
Higher minimum wages, pot legalization and limits on school choice will harm the intended beneficiaries.
Jason L. Riley, WSJ
Jan. 3, 2023 6:02 pm ET
Last week, a judge in California placed a temporary hold on a law that would raise the state minimum wage for fast-food workers as high as $22 an hour. The law was signed by Democratic Gov. Gavin Newsom last summer and set to be implemented on Jan. 1. But a petition to overturn it by voter referendum in 2024 has gathered more than a million signatures, which prompted the restraining order.
For now, California is getting a reprieve, but the other 26 states that are hiking the minimum wage this year probably won’t be so lucky. Proponents of these measures say they reduce poverty, but history shows that they are more likely to reduce employment—particularly among younger, less experienced workers—by making job seekers too costly to hire.
Even people who keep their jobs after a minimum-wage increase often find themselves assigned fewer hours of work and thus making less money than they might have expected. That was the finding of a University of Washington analysis after Seattle hiked its minimum wage in 2015. “Increased wages,” the study concluded, “were offset by modest reductions in employment and hours, thereby limiting the extent to which higher wages directly translated into higher average earnings.”
Perhaps a bigger problem with using mandatory wage floors to address poverty is the dearth of people who earn minimum wage. In 2020, only 1.5% of all hourly workers earned the federal minimum wage, according to the U.S. Bureau of Labor Statistics. State minimum wages can be higher, but the portion of workers earning the state minimum is also quite small. In 2015, it was less than 8%. In other words, there simply aren’t enough people earning minimum wages to drive poverty trends. Moreover, most working people who are poor already earn higher than the minimum, and most of the people who do take home a minimum wage live in households that are well above the poverty line. What impoverished people need most are jobs, and minimum-wage increases that hamper job creation do more harm than good.
Unfortunately, government-imposed wage mandates aren’t the only misguided policies that will be unleashed this year. In November, Maryland and Missouri became the 21st and 22nd states to legalize the recreational use of marijuana. And last month, New York state began issuing “cannabis dispensary licenses” after settling a dispute over who qualified to skip to the front of the line. Lawmakers wanted to give preference to racial and ethnic minority applicants who had been convicted of drug crimes but didn’t specify whether the conviction had to have taken place in New York. It’s in the details.
Some of the same people who celebrated the crackdowns on companies that manufacture opioids or produce vaping products have decided that weed must be not only legalized but subsidized by taxpayers. New York has planned “a $200 million public-private fund to aid ‘social equity’ applicants to help redress the ravages of the war on drugs, especially in communities of color,” the Associated Press reported.
Never mind that thousands of low-income racial and ethnic minority children remain on waiting lists for charter schools in New York because lawmakers won’t cross the teachers union and increase the arbitrary limit on how many charters can open. Parents can take comfort in knowing that the politicians are putting the interests of former (and future) drug dealers ahead of the interests of children who want to attend better schools.
There are compelling reasons to decriminalize and regulate certain drugs—the Prohibition comparison is apt—but social equity isn’t one of them. If social-justice advocates want to address mass incarceration or racial disparities in arrest rates, marijuana legalization is barking up the wrong tree. In Colorado and Washington state, where marijuana was legalized in 2012, blacks are still arrested at significantly higher rates than whites for pot-related offenses.
In the popular imagination, prisons are teeming with unlucky young black and Hispanic men who were caught with small amounts of marijuana for personal use. In reality, prisons are full of violent offenders, who outnumber drug offenders by almost 4 to 1, and the drug offenders who are incarcerated typically are there for trafficking. Moreover, even if all drug offenders were released tomorrow, the racial disparities among remaining inmates would barely budge, and we’d still have the largest prison population in the developed world.
The social-justice activism that propels minimum-wage hikes, drug legalization, school-choice opposition and other policies aimed at minorities tends to do the most harm to the intended beneficiaries. The last thing that lagging groups need are policies that price them out of the labor force, trap them in underperforming schools and subsidize counterproductive habits and behaviors.
Appeared in the January 4, 2023, print edition as 'New State Laws May Make 2023 a Year of Unintended Consequences'.