Fast Food Protests

Teenage Wageland

In a near-unanimous vote, the Los Angeles City Council has decided to increase the city’s minimum wage from $9 to $15 an hour, a 67 percent change to be phased in over the next five years. Once a measure can be formalized, Mayor Eric Garcetti promises to sign it into law. But if Los Angeles insists on raising the minimum wage, it should exempt workers 22 and younger. Otherwise, the higher minimum will price teens and students out of jobs and prevent them from getting valuable work experience.

Some argue that Los Angeles can easily absorb this increase, because compensation levels in the city are relatively high. According to the Bureau of Labor Statistics, the median hourly wage for the Los Angeles-Long Beach-Glendale metro area was $18.32 in 2014. But the presence of many high-paying professions masks the destructive effects the new minimum wage will have on industries that offer entry-level positions. Median wages for local dishwashers, bar backs, ticket takers, and fast-food workers run between $9.00 and $9.10. It’s naïve to assume that all these positions will survive the increase. Businesses don’t have to pay the minimum wage to workers they choose to let go or don’t hire in the first place. Many positions will be automated, or employers will give additional responsibilities to more experienced workers.

 

Read the rest at City Journal.

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The Supreme Court Protects Taxpayers For Once

In a rare victory for taxpayers, the Supreme Court ruled affirmed on Monday that states cannot doubly tax income earned in other states. From the Washington Post:

The court voted 5 to 4 to affirm a 2013 Maryland Court of Appeals ruling that the state’s practice of withholding a credit on the county segment of the state income tax wrongly exposes some residents with out-of-state income to double taxation. Justices said the provision violated the Constitution’s commerce clause because it might discourage individuals from doing business across state lines.

The issue of when a state can impose a tax on an individual has historically been a complicated one considering how transient people are. We often travel through, work at, and establish residency in different states. Especially in major cities on state borders like Washington, DC or New York, New York, an individual may work in one city and live in another.

As such, the Supreme Court established a four-pronged test in the 1977 case Complete Auto Transit, Inc v. Brady to determine when a state can levy a tax. Namely, a tax can survive a Commerce Clause challenge if it “[1] is applied to an activity with a substantial nexus with the taxing State, [2] is fairly apportioned, [3] does not discriminate against interstate commerce, and [4] is fairly related to the services provided by the State.”

Maryland’s tax violated 2 and 3. By failing to offer a full credit for taxes paid in other states, Maryland’s income tax effectively acted as a tariff, discouraging residents from making money in and thereby doing business with other states. This is a major victory against double taxation and comes at a particularly important time.

With the growth of the internet and America’s continually shifting economy toward the service sector, states keep looking for ways to impose taxes on people making money outside of their borders. It’s a welcome sign that the Supreme Court will not put up with such schemes — at least so far.

Read the rest at Rare.

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Book Review: “Disinherited: How Washington Is Betraying America’s Youth”

In “Disinherited: How Washington Is Betraying America’s Youth,” fellows Diana Furchtgott-Roth and Jared Meyer of the Manhattan Institute for Policy Research paint a daunting portrait of a once-venerable nation selling out its future for an untenable present — and present clear, moderate reforms to reverse the perilous path on which they find our country. Disinherited seeks to make a direct and concise case to a generation of Americans that their future is being solid piecemeal to elder generations. Their story is strongly told both through the anecdotes of individuals and the substantial empirical evidence they have accumulated.

Disinherited opens its first chapter with co-author Jared Meyer (no relation) recounting a conversation with his grandparents, one that should be familiar to most millennials and Gen Xers: the Social Security discussion. Meyer’s grandfather, like many of his generation, feels that he deserves his Social Security, regardless of the cost of the program. Millennials, while paying higher Social Security taxes, never expect to receive a cent back. That dissonance between Meyer and his grandfather, and their expectations of provision, pervades the American consciousness and underlies our inability to plan for the future by advancing our youth.

Furchtgott-Roth and Meyer attack the key problems of this age — underfunded entitlements, the U.S. education system and youth unemployment — by weaving a tapestry of daunting macro statistics and everyday American difficulties. Their style of argument here is effective, as the stories make the incomprehensible sums of trillions and billions understandable in the context of the budget for an individual person, humanizing the abstract costs of misgovernance.

For example, as the authors point out, the Social Security and Medicare systems currently account for two-thirds of the present federal budget, with a total fiscal gap of $205 trillion between future obligations for those programs and future revenues. As the authors kindly point out, “[t]his is 12 times the GDP and 16 times official debt held by the public. In simpler terms, we are broke.”

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Obamacare Is a Horror Story for Young Americans

Obamacare has enmeshed many Americans in a bureaucratic nightmare. True, the law has helped some uninsured people obtain coverage. But millions of people have seen their health-insurance plans canceled, because the plans did not meet the requirements of the Affordable Care Act. Others, particularly young Americans, have seen premiums rise to pay for the roster of newly added benefits.

Tommy Groves (not his real name), a young professional working at a small firm in Washington, D.C., was among the nearly 5 million Americans who received termination-of-coverage letters from their health-insurance providers because their plans did not comply with the ACA’s requirements. While about half the states offered to extend canceled plans for another year, later increased to two years, the District of Columbia required its residents to get new insurance.

Tommy had no choice but to grudgingly visit D.C. Health Link and attempt to sign up for an insurance plan on the ACA exchange. He did not get very far. Besides the embarrassing computer difficulties that became infamous on the state and federal exchanges, massive technological problems with “back-end functionality” also plagued the site. D.C. Health Link was unable to verify Tommy’s identity, and after hours of back-and-forth on the phone with an ACA help center, he was told to send in a paper application.

After many phone calls and countless hours on hold over a period of weeks, and despite multiple assurances to the contrary, Tommy was informed that his paper application had been lost. Finally he was directed to a place where he could sign up in person.

This attempt, too, did not succeed, as the “navigators” there had been instructed not to accept paper applications any longer. After he had spent hours more on the phone with D.C. Health Link over several additional weeks, the online system was finally able to verify his identity, and he met the deadline for purchasing health insurance. “I don’t want other people who are thrown off their employer’s health insurance to go through what I did,” Tommy told us.

“It was miserable and a complete waste of my time. Nobody listens to you. Nobody takes responsibility. The only advice I give people who are going to be stuck dealing with the health-care exchanges is, ‘Get ready for the bureaucracy.’”

Tommy’s premium for his “silver plan” went up to $225 a month from his $175 pre-ACA rate. Both plans cover the health-care services he wants, but his new plan includes services that he does not need, such as maternity care, pediatric dental care, mental-health coverage, and substance-abuse treatment. His deductible increased from $1,400 to $1,500 for in-network coverage, and from $2,800 to $3,000 for out-of-network coverage. Tommy is now paying more for coverage that is less valuable to him, and all after he was forced to spend dozens of hours on the phone.

Read the rest at National Review Online.

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Here’s Another Reason We Should be Worried About Internet Censorship

Net neutrality might not be the only threat to Internet freedom. Yesterday, the head of the Internet Corporation for Assigned Names and Numbers (ICANN) — the California-based nonprofit that manages the net’s domain names — expressed confidence that his group would operate free from U.S. government oversight by the end of the year.

Since its inception in 1998, the US Department of Commerce has contracted with ICANN, in effect protecting free expression on the Internet. Individuals today can register domains and create websites without censorship from foreign governments like Russia and China. Of course, these censorship-happy states have the power to control the Internet inside their sovereign territory, like the Great Firewall of China. However, China cannot censor a website about, say, Tibet Independence, if it is operated outside of its jurisdiction.

That just might change come September when ICANN transitions to what the corporation’s president Fadi Chehade calls a “global multistakeholder community” model in overseeing its operations, allowing input from multiple governments. This is particularly concerning given that Russia and China have repeatedly proposed that the United Nations take control of the Internet. While such a plan seems unlikely for the time being, ICANN’s change could allow input on Internet control from countries that want to censor the Web.

Granted, many tech experts see ICANN’s transition to be a positive move, especially considering the U.S. government’s track record of spying on foreign governments and even its own citizens. According to the Wall Street Journal, Alan Marcus, senior director of the World Economic Forum, supports the transition since “the NSA tarnished the U.S. stewardship” of the Web.

Thus, it remains to be seen how ICANN’s transition will play out. Nevertheless, one thing is clear: the corporation needs to lay out a clear model of governance that protects the freedoms that have made the Internet so great.

Reprinted with permission from Rare.