All's Fair in Love and Politics.

Ever since the implementation of a minimum wage in the early 1900's, Americans have been trying to raise it. Jennifer Avilez in her post Minimum Wage & Inflation seeks to promote this view by claiming that raising the minimum wage in Texas, which is equal to the mandated Federal wage of $7.25 per hour, will bring "more spending power" to the "6.3 million Texans" who receive that. In short, Avilez asks whether this is "fair" to those who do make that much seeing as the price of living is rising.

I'm here to claim that it is completely fair. Why would it not be? Do people deserve a certain standard of living no matter the type of job, no matter my previous experience? The true unfairness would be to force businesses to raise wages when they do not think it is economically viable.

Raising the minimum wage goes against much of basic economic theory, that is, the more you forcibly increase wages the less ability on the part of business owners and managers to higher more workers. So in effect, the people already hired do receive more income, however, less people are hired, creating more unemployment. Some do disagree with this view and report, as show here, that raising minimum wage has little to no negative effect overall on a city's unemployment. However, as explained here, the study that calculated the effects of the minimum wage increase in New Jersey in 1994, did not take into account the very small businesses and instead focused more on already established businesses that had more weight to throw around and little to lose with a slight increase in wage costs. The metaphorical David's of the business world were not so lucky though. When my current employers first established their businesses, they didn't even pay themselves, and they were working at a deficit for the first few years. A mandatory wage increase would have destroyed them. Avilez also points to inflation as being a problem. Stating that it should be regulated or at least have the minimum wage be gauged to correlate with inflation. I'm no economist, but inflation isn't something that is a causeless, controlling it isn't a matter of simple legislation, and increasing wages as inflation increases can only exacerbate the problem. For example, if the minimum wage was truly beneficial, then it would be reasonable to force businesses to have $100/hour salaries.

Lastly, this, like all other issues in politics and economics, is inseparable from a moral theory. Force is fundamentally antithetical to freedom and making rational, long term decisions. The average business owner is not trying to oppress their workers with poor wages and poorer work conditions. They know if you try to sell a minimum wage job you better have some extra benefits to back it up, e.g. HEB. I do not disagree that wages should be raised in order to be more competitive, especially in metropolitan areas where city living expenses cannot be managed solely by a minimum wage job. However, the means of raising them is where I stand firmly on free-market principles. Businesses raise wages in order to be more competitive. At my job, I was hired well above minimum wage with little experience and have worked my way up to what many consider a comfortable income for one person. All because my employers relied more on gaining competitive advantage by enticing good workers rather than placating a government mandate.

How Laissez-Faire is Texas?

Texas is often described as a limited government, pro-business heaven. But looking at the evidence of the government's hand in the economy reveals that Texas is not as Laissez-Faire as it would like to seem and I think that continually praising Texas' pro-business efforts have made it harder to see this and have a real, free-market economy.

A major component of a capitalist economy is the drastic separation between the State and Economics, that is, the government and business. However, Texas politics and legislation have had their hands in the economy from its earliest beginnings. In fact, in 1889 Texas was the second state in the union, Kansas being the first, to create Antitrust legislation, i.e. legislation that prevents large corporate mergers and "anti-competitive" actions. Antitrust laws seek to dismantle "monopolies", an over-generalized term that applies to any business or company that has a "large market share." Texans created these laws in order, they believed, to protect business interests in the state as well as enshrine competition. But by trying to "promote competition" they took away what really makes a competitive market, freedom to act and protection of individual rights. Now the person who could have been making the best product at the cheapest price, or the two businesses that wanted to merge, are now restricted by law from doing so because these actions are labeled as "monopolistic."

As Erica Grieder states in her book, Big, Hot, Cheap and Right, which was summarized in the article we read, Texas is not so much "pro-business", rather its actions have been "pro-Texas-business." This idea is enumerated in the Texas Politics online textbook in chapter 9, Section 2, The Politics of Political Economy, where it cites the Texas Enterprise Fund and the "rhetorical nods to the preeminence of markets and competition." Apparently, shortly after the Rainy Day Fund was established, Texas used around 100 million dollars to create an incentive for tech businesses to do come do their thing in the lone star state. This was followed by the 200 million dollar Emerging Technology Fund, "designed to encourage the development of high tech public-private partnerships." Now, I don't know about you, but if that's the often lauded free-market capitalism in action, then call me a Bolshevik.

It was put succinctly by Carine Martinez-Gouhier in this post on Economic incentives in Texas. Gouhier states that a handful of tech companies denied the monetary incentives by the City of Austin, claiming the regulations that would follow from accepting such an incentive is antithetical to promoting their business. Yet many, like Dropbox, said they still wanted to continue to expand into Texas precisely because of its greater economic freedom and that the "short-term" benefit of incentive funds cannot be the deciding factor for long term business. 

My whole point here is not to criticize Texas' efforts to create a firm, limited government and a positive business climate. Instead, my hope is to bring to light that we are not as capitalistic as we may seem; we are much more entrenched in a mixed economy, like the rest of the union, than I believe we'd like to think. The first step to creating a more Laissez-Faire environment is to assess what we are doing now, be honest with what is going on, and try to reel back regulation and incentives on business, offering, instead, a free-market as incentive enough for growing Texas business.

Go Big and Go Broke

In his blog post Tuition Costs, Aaron Taylor Bonnette claims State and National government should do more in the way of helping students pay for college expenses through direct subsidy methods rather than the increasingly destructive effects of student loans.

This problem of student debt and rising tuition costs are much more of a cultural issue than a policy issue. So many people are told at a very young age that college is for everyone. In reality it's not. Studies have shown that in this day and age you are not as likely as your parents to have a well paid job after graduating with your bachelors degree. As well, because of this "even you!" attitude, many people who cannot afford college nor need it are unthinkingly pushed into the higher education system that requires a lot of money and time and does not guarantee a profit after all that investment. Alternative options are getting a low cost associate's degree and working on your own to teach yourself valuable skills, like say electrical engineering or even physical therapy training. Heck, even my hairstylist makes 50K+ a year and she has a rather inexpensive beauty school degree.

Actually, the government currently provides an amazing amount of student loan debt relief and Obama wants to continue to grow this forgiveness more so in the future. Currently, as explained in this article by Economics Professor Jefferey Dorfman, those with student loan debt not only pay very little interest compared to private loans, the government will forgive your debt after 20 years if you make a certain amount of money and partake in a "pay as you earn" program, 10 years if you work in a public service job. Again these things exacerbate the problem of encouraging people to go to college when it is not economically viable causing in increase in the need for more faculty and staff, therefore increasing prices.

Speaking from experience, I was offered an opportunity to attend the University of California at Berkeley, a rather prestigious school in my mind. I decided against it when I saw the 45,000 dollar price tag on the tuition. This caused me to seriously consider whether 45,000 dollars a year would be a valuable investment for a degree in something that may or may not pay off in the long run. I decided against it and instead chose UT where it was much cheaper and I can pay my way through college without any debt, working around 25-30 hours a week (Something I think anyone can do). Students get so wrapped up their senior year in getting into the best schools, especially private ones that cost exorbitant amounts of money when other, much cheaper options are definitely viable.

In the end, with all things political, there is an ethical base where one can look to make policy decisions. Bonnette claims "...state and national government should provide more funding to universities and provide more scholarships and grants to perspective students in order to give everyone a chance to get the education they deserve." Someone has to pay for this and that means that the State should take on either more debt or increase taxation, therefore making those who are not in college pay for those who are because they "deserve" it. We need to seriously question this idea of a right to an education and maybe then we can see that it is not in Texas' interest to increase student subsidies just as much as it's not in my interest to pay for someone else's education while I'm also paying for mine.

Health Insurance is Still Not a Right

A fairly recent story that hit national news was the Hobby Lobby fight against the Affordable Care Act mandate requiring that the insurance a company provides must also provide coverage of contraception. This ended in a victory for Hobby Lobby and other closely-held businesses or family run businesses, that is, businesses with very few owners, where the Supreme Court ruled that these types of businesses could be exempt from providing such contraception from employee medical insurance plans under a religious freedom principle.

Now why am I talking about this on a Texas blog? Because, I believe Texas should use everything in its legal power to fight the mandated Affordable Care Act. The fact that Hobby Lobby had to fight a mandate of the Affordable Care Act using religion of all things as a defense shows that individual liberties and the liberties of those who own businesses, large or small, have been seriously undermined. People, by nature of their individual rights, should be free to choose what healthcare plans they wish to take part in or offer to their employees as a bargaining tool, if they wish to or not. Under the individual mandate, you are penalized financially for not having some sort of healthcare plan, as well if your employer offers a healthcare plan then they must follow certain guidelines whether they agree with it or not. You see, the ACA supports freedom until you want to say "No" and at that point you can't call it freedom.

Back to Texas. What can we do? For starters we can follow in South Carolina's footsteps and try to create legislation that effectively nulls the mandates of the ACA. For example, Texas voters and legislation can support Gov. Perry, something I don't say often, in the fight against receiving medicare funds that would expand the program, which  is causing more national debt, more of a welfare state and a significant decrease in quality medical care. Legislators can also provide tax deductions that combat the individual mandate tax as well as prohibit the use of state employees and agencies to implement such laws, effectively leaving the job in the hands of the federal government which cannot feasibly implement them.

In a speech given by Dr. Leonard Peikoff, former President of the Ayn Rand Institute, entitled Healthcare is Not a Right, he describes that the battle over healthcare reforms is indeed a moral issue. That those who claim that "Healthcare is a Human Right" or in this case "Health Insurance is a Human Right" are effectively stating that some people, namely doctors, businesses that offer healthcare plans, and insurance companies, should sacrifice time, effort and finances for something that may or may not agree with because many people cannot afford healthcare plans that are so complicatedly inflated by government controls on the healthcare industry and on the insurance industry. In short, when someone claims they have a right to something that is produced by others they claim a "right" to their life. As a proud Texan and a prouder individualist, I say governmental force on innocent citizens is something to be fought and it is within our power to do so.

The Blue pill or the Red pill?

A major problem in Texas is our Teen Birth Rate; We regularly rank in the top 10 (even top 5) of number of teenage pregnancies (pregnancies that occur between 15-19). So, naturally, there is a lot of debate over how we can solve this problem. One way, argues freelance writer Natalie San Luis in her Burnt Orange Report post, is through state support of Free to Low-cost birth control programs like the one Colorado has implemented since 2009.

This question is prime real estate for an old-fashion Liberal vs Conservative showdown. Luis is writing for a liberal blog and is a self-declared feminist, so her audience is probably going to be those who are already a little left-leaning. Her argument breaks into 3 points. 1. It's hard for low-income families to get birth control. 2. Programs like this actually save money! and 3. Lower cost of birth control = Fewer abortions.

Similarly, I'll break my counter argument into 3 parts:

1. Show me the money!
Luis states "Since 2009, Colorado has covered the cost for more than 30,000 IUD's (Intrauterine Device) for low-income women in the state." which raises the question: how much was Colorado spending on this? Turns out, not much. According to this article in The Denver Post, The Colorado Family Planning Initiative was "funded by a private anonymous donor for five years" (Later clarified in this article to be a foundation made by Warren Buffet). Taxpayers sure do save money when someone else is footing the bill. What this shows is that private individuals and institutions can and often do just as much good, if not more, than government spending in terms of benefiting others and saving money. Luis makes no mention of this private funding and makes no mention of taxpayers having to pay for these costs. So where would this money come from?

2. "The Talk" can be scary.
A significant cause of high pregnancy rates in Texas often occur because of poor sex-ed. This usually stems from nervous parents/children and conservative school reforms that try to avoid sex talks rather than understand the issues. Luis doesn't seem to want to encourage the battle on the home front when she says "Teens who don't want to tell their parents that they are sexually active—because it could require an uncomfortable and potentially dangerous conversation." That's precisely where parents should be taking action. Luis states that the barrier placed in Texas law that teens must have parental consent for birth control makes it harder for them to get access to it. Speaking from experience, those under the age of 17 are not the most rational of people, and allowing young adults to do things like receive an IUD without parental consent or knowledge really steps over the boundaries of parental rights.

3. Less babies, but more Sex.

The last issue I see arising is the increase in sexual activity. I'm all for proper sex education (that pushes the idea of safe, protected sex and the option of abstinence), but at the same time, state funding of any private sector issue often does not produce the best outcome. With more birth control many young adults and their
"I'm invincible!" mindsets might not see a need for using condoms or other safe sex prevention methods, thus raising the STD rate among young adults and their partners. My point is that, again, sex-education is more important than loosened barriers for birth control, and being open about your sexual activity can help the child and parent best combat possible pregnancies and STD's among teens.

Mandatory is a strong word.

If there is one thing that alarms me most when it comes to politics, it is the word "mandated" or "mandatory" because it is the direct antonym to freedom. In Patricia Zavala's Texas Tribune article Mandatory Workers' comp is right for Texas Zavala holds up freedom of choice and governmental force as two options over the debate regarding Workers' compensation in Texas, claiming the latter as the better option for Texas.

A little background, Texas is the only state that does not have a mandatory law or regulation requiring that private businesses partake in insurance for workplace injuries. Zavala is speaking to those with a more liberal ideology, that government solves issues in the private sector, for she is making a call to arms in future workers' comp legislation. Zavala's rhetoric is a bit alarmist though. She states "We have the most dangerous construction industry in the country." However, thanks to the Texas Tribune's two-side representation of issues, we can see the counter article by Rod Bordelon, Commissioner of Worker's Compensation in Texas, dispute that rather harsh description. "Our state has some of the nation’s lowest workers’ compensation costs, and injury rates are down significantly — well below the national average." says Bordelon, contradicting this "most dangerous" claim Zavala makes. She also states that "only about 40 percent of construction workers in Texas are protected by workers’ compensation policies." Looking into the study she quotes, it claims to not have all the information from private businesses that may have alternative types of worker's comp plans. As well, much of the information received in that study is by poll and survey rather than hard numbers, to which I believe Bordelon has more access. 26%, says the study, of workers do not know whether or not they have workers comp. That seems like a lot of leeway to make either side seem arguable.

Nevertheless, let's assume that only 40% of workers have some sort of compensation plan. Is that necessarily important? Caveat Emptor, or "Buyer Beware" is not just a principle for the customer, it's also for the employee because one is trading one's time and energy for pay or other benefits. This principle makes one claim, that it is up to both parties to make their own judgments through cost-benefit analysis in every trade they make. In the case of Workers' comp, it is the worker who must decide whether or not working for a business that does not offer work related injury insurance is a good choice (Maybe this business offers more pay because it's not paying the costs of such insurance plans). When you look at it in this light, maybe it's not such a good idea to "mandate" workers comp, it takes away the employee's and the businesses' ability to choose what is a profitable deal. Let me say I am not against workers' comp, I think it is a very valuable bargaining tool for workers who work in dangerous fields such as construction. My issue is with the divide between Force and Freedom, and when breaking down an issue into its premises, it makes it rather easy to decide which side you're on.

Keeping the Belt Tight

It seems even with an influx of cash, Texas still does not want to get cozy with the idea of spending more when it comes to Government. As Ross Ramsey explains in this Texas Tribune article, Texas' increased wealth due to Oil and Natural gas (and probably a positive business climate) is more or less not going to be considered in future budgeting endeavors. Instead the budget board and the governor’s budget office has asked that state agencies to prepare their 2015 budgets with 5% less of what they are spending now (then 10% less the following year) excluding education costs and some social services like Medicaid. The reason: The chance of only having that amount to work with in the future. It seems like Texas is trying to be prepared with a little bit of conservative dieting. This article sheds light on how, in a state primarily conservative and viewing government spending with a critical eye, budget planners and lawyers are going to cover their bases all they can when it comes to tax dollars, and "for budget cutters, it's not about revenue."