Saint Paul: The Racism of Charity

I live, as has been noted, in Saint Paul, Minnesota. Beautiful city, clogged with funky history, vastly more interesting than neighboring Minneapolis.

Much less flaky, too. Generally.

But the Green candidate for mayor just logged 20% in the city primary, and the DFL is more strongly controlled by the Kos/Soliah wing of the party than ever.

Worse, one of the ideas that keeps the hive buzzing is generating ever-more traction in the St. Paul DFL; the "living wage".

King, thankfully, kicks holes in the idea.

King notes not only the weakness of the idea - but its great hypocrisy: It is generallly limited to companies that do business with the city.

We know that if the living wage ordinance was applied to all jobs -- whether or not with government contractors, whether or not the business is subsidized -- that it would create massive unemployment. It would be a minimum wage, as I argued before. The proponents get this, so they propose instead to restrict the scope of the ordinance to just the subset of firms that do business with government. What should be the harm? The better question to ask is qui bono -- who benefits from it? First off, to answer Downing's question on "why contractors", simply ask who the alternative to contractors would be? Answer: Government workers, represented by public employee unions. These are huge beneficiaries of living wage ordinances for government contractors; they would restrict the ability of the private sector to compete with union workers to provide public services.

That, indeed, is the key provision that enables the DFL to push it; it can't cut into the public employee unions' stock of jobs to be doled out.

It cuts down on the competition.

But more to the point is that, as an anti-poverty program, trading business subsidies for poverty reduction is a bad bargain. The poor are unlikely to be able to get the jobs provided; the biggest problem for the poor isn't a low wage but insufficient hours of work. It also takes away from the starter jobs the poor need to develop job skills that allow them to move up the wage ladder.

Unless, of course, they do it through the city - and the city's public employee union. More union employees. Fewer entrepreneurs.

And who are the people being cut out at the lower level?

See how it works?

Posted by Mitch at September 21, 2005 04:27 AM | TrackBack