NEWS

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July 19, 2006

Towards a coherent employment policy

To feed your hankering for top editorials of the day, I found this gem in the Tribune (note the great lead, of course nothing compared to this one, but still great):

Last week, Chicago offered United Airlines $5.25 million in tax incentives to set up its world headquarters downtown. Some 350 corporate jobs will move from the northwest suburbs to the city. Chicago wants those jobs.Next week, the Chicago City Council is going to tell Wal-Mart and other very large retailers: Pay your workers at least $13 an hour in wages and benefits, or go away. We don't want your jobs.Now, we're just going to guess that most Chicagoans who are unemployed wouldn't qualify to be, say, a senior vice president for a major airline. Not many people are.We'd guess, though, that many of the unemployed would be willing to start on the ground floor of a large retail store.So what in the heck is Chicago doing?Chicago may want the prestige of having an airline's world headquarters in the Loop. We won't argue with that. (We might argue with the price tag. With help from the state, the total package approaches $7 million.)But why, in light of the United deal, would the city chase away jobs that unemployed Chicagoans could get?
I've been beating this drum for a long time. But, there is more here than the Tribune pointing out how misguided these liberals are. There is a simple principle at work here, that government's, whether they be national or local, should maximize employment. That can mean bringing in United, but it should also mean that Wal-Mart should be allowed to enter. Unfortunately, the employment debate is driven by liberal reactionists on one side and self-interested profiteers on the other. As a result, government's suck at creating lower-level job opportunities and once they create those opportunities they are even worse at keeping the profiteers in check.At the start, concerned, liberal citizens are hesitant to let in big stores like Target or Wal-Mart. This is bad, especially when the response is to artificially force up wages and impose huge costs on new businesses.But, when those stores do enter, profiteers build up political clout and block out competition, hold down wages, and hike up prices. This is also bad.When people take me on from the left, this is what they are referring to. But why don't the liberals take control of the debate. Why can't they view the profiteers as tools towards progress, or at least recognize that this doesn't have to be a zero-sum game? Of course, you can't let business run amuck. But the debate should be about how to efficiently achieve this. If that happened, a major aspect of the class warfare that needlessly divides and hurts this country would melt away. Then we could find better things to argue about.Update: Here is my response to Will Baude's remarks.