No Free Burgers…

If there’s one thing that conservative and liberal economists agree about, it’s that old bromide about there being no free lunch.

That widget you are manufacturing contains raw materials, its construction takes labor, and its distribution and marketing must be paid for. Your facility and utilities cost money.  Those costs–plus some profit–have to be reflected in the price, or you’ll go broke.

You may be able to gain a market advantage by shifting some of your costs to others–we all know of cases where pollution created during production is discharged into the air or water to be paid for by the community at large, rather than by being properly disposed of and the cost of that disposal factored into the product’s sales price–but if it’s a cost of doing business, someone has to pay it.

Market theory assumes that the widget manufacturer will pay all the costs of production,  and then pass those costs on to the ultimate consumer, as part of the price.

Increasingly, however, taxpayers are assuming those costs.

Case in point: we are subsidizing the wages of a quarter of the people who have jobs today. A recent study from UC Berkeley and the University of Illinois found that fully 52% of fast-food workers receive public assistance–mostly Medicaid and food stamps–to the tune of $7 billion dollars a year. (McDonald’s workers alone got $1.2 billion of that.) One Wisconsin Wal-Mart costs taxpayers over a million dollars a year.

The United States now has the highest proportion of low-wage workers in the developed world. And as the report noted, every dollar taxpayers spend subsidizing corporations so they can continue paying their workers poverty wages is a dollar not spent on early childhood programs, or schools, or roads, or any other social good.

We need to have a national conversation about who is paying for that burger.

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Fun with Numbers

In a column right before the end of the year, Brian Howey shared statistics about Indiana. They’re revealing.

Hoosiers rank 39th in per capita income, with residents making 87.2 percent of U.S. income at $38,119, and 33rd in household income at $46,974, down from $47,399 in 2011 (32nd). In 2002, we ranked 24th at $53,482. That is a 13.6 percent decline in the last decade, ranking us 48th.

The Indiana General Assembly passed and then-Gov. Mitch Daniels signed right-to-work legislation in February 2011. Union membership declined from 11.3 percent of the workforce in 2011 (302,000 workers, or 15th in the nation) to 9.1 percent in 2012 (246,000 workers). Only 10 percent of the workforce is represented by a union, ranking us 15th, down 2.4 percent from 2011.

Indiana ranks 10th in bankruptcies over time in 2012, and sixth in the rate per 1,000 people.

Apparently, the folks who opposed Right to Work were right when they characterized the measure as “Right to Work for Less.”

Howey’s long list also included these interesting numbers: Indiana ranks 17th in college enrollments–we are educating lots of students in our colleges and Universities. But we rank 42d in the percentage of Hoosiers holding Bachelor’s degrees, and 44th in the percentage of Hoosiers with any sort of degree.

We educate them and they leave.

Maybe our intrepid legislators should ask why it is that educated folks don’t stay in our state. Could it be that those low taxes translate into poor public services and a low quality of life?

Today is the start of a shiny new year. Wouldn’t it be nice if those we elect to office would decide to work together this year to improve Indiana’s dismal numbers, and the quality of life in the Hoosier State?

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RIP

Andy Jacobs died this weekend. The brand of politics he practiced predeceased him.

I was the Republican candidate who ran against Andy in 1980.  It was a hard-fought campaign, but hard-fought didn’t imply the sort of mud-throwing and character assassination we have become accustomed to. Andy suggested that some of my positions were uninformed; I argued that he was ineffective. When Andy retired from Congress, Bill Hudnut and I were among those invited to “roast” him, and I admitted that during the heat of the campaign I had called him a name…I had called him a Democrat.

Andy didn’t hold grudges against political opponents. His friendship with Bill Hudnut–who actually defeated him before he won back his Congressional office– is legendary. Not too many years after I ran against him, my youngest son served as his Congressional Page.  Andy and I would go on to have an occasional lunch together, and from time to time, he would comment favorably, via email, on columns I’d written.

We probably agreed more than we disagreed. When the Iraq War started, he and I shared the stage at a protest rally on Monument Circle. I seldom saw him after that, and I knew his health was deteriorating.

Indianapolis will miss Andy Jacobs.

The whole country is poorer for the loss of generosity of spirit and the politics of principle he characterized.

RIP.

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The American Dream is Moving

Ameica’s love affair with the suburbs began after World War II, and has thrived for most of my adult life. I’ve never really understood the desire for a tract house on a quarter-acre lot, or a McMansion set even farther away from the nearest neighbor. I’m a congenitally urban person–and I’ve always been a bit envious of European cities, where those who could afford it live in the center of well-maintained and loved cities, and those who are less fortunate are relegated to the suburbs.

Only in America does such an enormous percentage of the middle-class live in such low densities on so much land.

I have always chalked up this predilection for grass to the “to each his own” category, and assumed my own urban preferences would always mark me as a minority. But if two books I read last week are to be believed, we may be seeing a welcome shift–an increased appreciation for the many charms and conveniences of city living.

In The End of the Suburbs: Where the American Dream is Moving, the authors point to several significant signs that times are changing. The most recent census data suggests that–after 50 years of pretty constant growth–the suburbs have stalled. Recently, cities and high-density suburbs have grown twice as fast, with the largest cities growing faster than their suburbs for the first time in a hundred years.

Meanwhile, home values have inverted. During the Great Recession, housing values held up much better in urban centers than in suburban ones. And construction activity has reversed, with higher percentages of building permits being issued for “walkable, urbanized” locations and for multi-family developments than for traditional suburbia.

Poverty, too, has migrated. As of 2010, a record 15.3 million suburban residents were living below the poverty line, up 53% from 2000. Crime, of course, often follows poverty; new crime data shows that homicides have fallen sharply in cities while rising in the suburbs. (Indianapolis is an exception–as I’ve noted previously, our murder rate is substantially higher than New York’s.)

What’s driving the changes?

Household size has been steadily shrinking. People marry later, or not at all, and women wait longer to have fewer children. The suburbs were built for families with children, but Ozzie and Harriet have moved to an assisted living facility, and their grandchildren, according to the data, “hate the burbs.” Seventy-seven percent of Millennials express a preference for urban living.  They also don’t care about driving: in 1980, 66% of all seventeen-year-olds had a driver’s license. In 2010, the figure was 47%. According to the data, they don’t want cars and they don’t want cul-de-sacs. Meanwhile, the price of oil continues to rise, and concerns about the environment have sparked an “anti-stuff” revolution.

Finally, the authors note that suburbs were poorly designed. They spread people far from each other, from their routine destinations, and from their jobs, making residents totally dependent on cars that get more expensive to operate every year. The suburbs’ low density complicates efficient provision of services, and fails to generate enough tax revenue to pay for the infrastructure needed to support them.

This book, together with The Metropolitan Revolution: How Cities and Metros are Fixing Our Broken Politics and Fragile Economy, provided plenty of thought-provoking data, and I’ll continue to share some of it in subsequent posts. Perhaps the most compelling finding, highlighted in both books, was the importance of public transportation in attracting new residents, jobs, and young people–and enabling economic development.

Both books shared lots of success stories. The common threads running through those successes included visionary leadership, collaborations between governments,  nonprofits, universities and the business community, and good public transportation.

It won’t surprise you to find that Indianapolis wasn’t mentioned.

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The Problem with Ideological Purity

A recent post at Political Animal made a point I’ve pondered frequently as I’ve watched the GOP morph from political party to religious cult.

After a brief discussion of the attack on Obamacare’s contraceptive mandate, the post considered the implications of the GOP’s refusal to bend even when voters are likely to punish them for that intransigence:

The most striking fact when it comes to women and birth control is this one: 99 percent of sexually active women use it.

Pundits have often pointed out that historically, neither party tends to dominate the political system for very long. The reason for this is that, like how corporations exist to make money, political parties exist to win elections, and if the party keeps taking positions that alienate huge fractions of the electorate, then they’ll change those positions.

But the GOP isn’t doing this. After the 2012 defeat, driven in large part by being absolutely crushed in practically every minority demographic, Republicans halfheartedly tried to choke down an immigration reform bill to at least stop the bleeding. President Obama signaled his support, and the Senate passed a half-decent measure. But now reform looks dead because House Republicans refuse to let the Senate bill come up for a vote. For the GOP, it’s almost the worst of all worlds: a bill supported by all the prominent Democrats goes down due to extremist Republican intransigence. Now Democrats get to blame the GOP for breaking their promise, and quite possibly increase their share of the minority vote. It would have been better to not do anything.

Something similar looks to be happening for women’s issues. Ken Cuccinelli just went down in the Virginia governor’s race largely due to his antediluvian views on women’s rights. The party as a whole would be best served by this debate just going away. But extremists have strongly-held beliefs, and don’t particularly care about clear-eyed electoral cost-benefit calculations.

Here in Indiana, the culture-warrior contingent of the state GOP remains adamant about the need to pass HJR6, despite pretty convincing evidence that their position is costing them support–especially among the younger voters they will increasingly need.

Politics is the art of compromise. Religion, of course, is a matter of faith. To describe today’s Republican party as “Faith Based” is accurate–but it is not a compliment. It’s another way to suggest that the party’s current course is suicidal.

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