Month: October 2013

If You Like It, Maybe You Can Keep It

By William Newell

“If you like your health care plan, you can keep your health care plan.” These words have come back to haunt President Obama. Contrary to his statement, many Americans enrolled in individual health plans have lost or will lose their current plans due to regulations imposed by the Affordable Care Act. White House spokesperson Jay Carney admitted “it’s true” there are plans that won’t be eligible under the health care law.

According to Forbes, more people have been notified of their plan’s cancellation in three states than have signed up for an online health care exchange account in all 50 states. Many people have seen rates increase, yet are not eligible for the ACA’s insurance rate subsidies. NBC News relayed the saddest part of it all: The Obama Administration likely knew for three years that this would happen and that possibly 80 percent of people in the individual health insurance market could lose their current plans.

This situation highlights the fact that leaders must present the policies they promote in a way that is genuinely reflective of their content. When politicians make outlandish promises and fail to meet them, it undermines public trust and the government’s effectiveness. It just goes to show, when a politician says something that seems too good to be true, it probably is.

William Newell is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization. He is a graduate of Willamette University.

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Ken Ivory to Speak on Transferring Public Lands

Join Cascade Policy Institute as we welcome Utah’s Ken Ivory to share his insights on how to solve many of the western states’ problems through the transfer of public lands.

Ken Ivory (R-UT, District 47) was elected to the Utah House of Representatives in November of 2010. Ken campaigned as a candidate of the “Dad Party.” Ken and his wife, Becky are the parents of four children. Given the daunting challenges that face the state and the nation, Ken took time from his business, mediation, and estate planning law practice to “secure the blessings of liberty” to his posterity.

Ken Ivory will explain why the Transfer of Public Lands is a solution big enough to fund education; to better care for the lands; to protect access; to create jobs; and to grow local, state, and national economies. If we fail to secure our state’s rights to transfer public lands, it will not be because doing so is illegal, unconstitutional, or impossible. If we fail to enforce this “solemn compact” of statehood, it will be because our leaders lack the knowledge or the courage to do what has already been done before.

As the current president of the American Lands Council, Ken educates legislators and community leaders throughout the country about their jurisdictional rights and duties to manage, protect, and care for the lands within our borders. Ken is the author of Where’s the Line? How States Protect the Constitution.

Hors d’oeuvres, a dessert buffet, and a no-host bar will be provided.

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Does a Higher Minimum Wage Always Benefit Workers?

By Erin Shannon

The debate over raising the minimum wage is everywhere. Fast food workers around the country have been striking for higher pay, Oregon’s minimum wage is set to increase to $9.10 per hour in January, and Seattle Mayor Mike McGinn is demanding that Whole Foods pay workers there more than the company’s current average wage of $16.15 per hour. But while Oregon’s neighbors to the north already have the highest minimum wage in the country at $9.19, a dramatic minimum wage battle is set to take place in SeaTac, Washington. Voters there will decide in November whether the city will increase the minimum wage for workers in SeaTac’s hospitality and transportation industries to $15 per hour.

Proponents of SeaTac’s Proposition 1 argue a mandated higher minimum wage than the state’s current minimum of $9.19 per hour is necessary to help lift low-wage workers out of poverty. Plenty of research shows that forcing a big increase in the minimum wage would have the opposite effect, hurting small businesses and pricing many low-wage workers out of their jobs.

But the most compelling arguments against a super-high minimum wage come from homegrown Washington businesses with real-world experience.

Take, for instance, some of Seattle’s most popular restaurants. Restaurant owner Tom Douglas voluntarily raised the wages of the employees of his 14 restaurants to $15 an hour last month. Douglas says the wage increase was a personal and business decision that he can afford after years of profitable success with his restaurants.

But Douglas readily points out that if he were forced to pay the equivalent of such high wages when he opened for business in 1989, he would be out of business today: “You know, if I were to try and do what I’m doing now when I first started out 24 years ago, I would be bankrupt. I couldn’t have done it. So I think there is a time and place for this and I think there is a sense that in my mind that, you know, you have to be the business owner that wants to do it. I’m not a big believer in the whole government mandate.”

Seattle fast-food favorite, Dick’s Drive-In, provides another convincing argument. Dick’s has made the choice to reward its 180 fast-food employees with reasonable pay and great benefits. The Seattle Times reported that Dick’s offers workers a starting wage of $10 per hour, as well as merit raises, employer-paid insurance, up to $8,000 for child care or college tuition, a 401(k) retirement program with employer match, paid time for volunteer service, and up to three weeks paid vacation.

Government has not forced Dick’s to provide generous wages and benefits; the company does it because it chose a business philosophy that works for them. Dick’s Drive-In founder Dick Spady ran his business according to two rules: “The No. 1 job of a business is to make a profit. If you don’t, it’s not worth anything. No. 2 thing is to take care of your people. They’re the key to success.”

These two rules continue to drive Dick’s business model. But the company’s vice president and the founder’s son, Jim Spady, recently told The Seattle Times that forcing businesses to pay a high minimum wage, such as the proposed $15 per hour, will hurt small businesses, especially new ones. These businesses rely on less experienced or low-skill workers and do not have the profit margin to withstand a massive forced wage increase.

Spady points out that many minimum- or low-wage companies, like Dick’s, are “transitional employers,” where the vast majority of workers start with no experience, develop valuable work skills, and end up moving on to somewhere else. “The way to improve the wages of the poorest people is to encourage them to upgrade their skills, not to pass a law that requires we pay X dollars an hour….So if you force law-abiding businesses to pay more, they will—or they will automate their processes so they use way less labor….So what these high minimum wage laws do is they help a few people get better wages, but a lot of current people will lose their jobs.”

Forcing employers to pay starting workers $15 per hour may make some people feel good, but it will have consequences. It may force many employers out of business, or reduce the number of jobs and hours available. In the case of Dick’s, it may result in the loss of many of that company’s popular employee benefits. Or it may result in young or inexperienced workers being squeezed out of the market by their more experienced counterparts. These workers don’t earn $15 an hour; they get zero.

The real-world consequences of minimum wage increases may vary, but they will happen. And none of them will help low-wage workers. No matter what happens in SeaTac this November, Oregon lawmakers should keep that in mind.

Erin Shannon is Director of the Center for Small Business at Washington Policy Center in Olympia, Washington. She is a guest contributor at Cascade Policy Institute, Oregon’s free market public policy research organization. A version of this article originally appeared in the Puget Sound Business Journal.

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October Chaos for Cover Oregon

Three weeks after launch, Oregon’s online health insurance exchange Cover Oregon hasn’t enrolled a single person. $82 million has been spent on a website which has received more than 430,000 visits and 3.7 million page views, and yet still cannot process applications.

According to Shelby Sebens of Northwest Watchdog, Cover Oregon spokesperson Ariane Holm “said she anticipates Cover Oregon’s website will be fully functional by the end of October. She also said residents can download an application and mail it back in or file it electronically. Or they can call Cover Oregon to start the application process.”

The Oregonian has reported on numerous reasons for the delays, including last-minute federal rulemaking that set back Oregon’s website programming. Oregon hasn’t been alone with these problems: HealthCare.gov, the national website for the Affordable Care Act, cost more than $400 million dollars and has been experiencing well-publicized, thorough dysfunction since October 1.

One would think functioning websites wouldn’t be too much to ask for the official ObamaCare rollout, the date of which was the focus of both national and statewide awareness campaigns. October’s online chaos seems to bode ill for the future of Americans’ health care experiences. Hopefully, people will rethink having increased centralized government control over a health care system which comprises nearly one-fifth of the U.S. economy.

Kathryn Hickok is Publications Director at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Global Quest For Freedom

Featuring

Donald J. Boudreaux, economics professor at George Mason University and former president of the Foundation for Economic Education, returns following accolades for his previous two Freedom Seminars engagements. He is an enthusiastic and knowledgeable speaker with a passion for freedom and optimism for the future. He has lectured in the United States, Canada, Latin America, and Europe. Don is published in The Wall Street Journal, Investor’s Business Daily, Regulation, Reason, The Freeman, The Washington Times, The Journal of Commerce, and the Cato Journal. He is the author of Globalization (Greenwood Press, 2008) and has a widely followed blog with Russ Roberts entitled Cafe Hayek. His PhD in economics is from Auburn University and his law degree is from the University of Virginia.

 

Karol Boudreaux is currently director of investments for the Omidyar Network, a philanthropic firm dedicated to harnessing the power of markets to create opportunity for people (especially in developing countries) to improve their lives. Prior to Omidyar Network, Karol was an Africa land tenure specialist at USAID. Before joining USAID, she conducted academic research that concentrated on property and land tenure systems, natural resource management, and many varieties of entrepreneurship in sub-Saharan Africa. A former instructor at the George Mason University School of Law, Karol was also a senior research fellow at the Mercatus Center at GMU where she managed a research project on enterprise-based solutions to poverty. Karol received a juris doctorate degree from the University of Virginia, where she concentrated on international law. She has a bachelor’s degree from Douglass College at Rutgers University.

Click here to register.

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Why Cities and Counties Should Consider Leaving TriMet

Please join us for Cascade’s monthly Policy Picnic led by Cascade President John Charles on Wednesday, November 20th, at noon.

Portland’s regional transit monopoly, TriMet, has reduced service five times in the past four years and forecasts much deeper cuts beginning 2017. The agency has no long-term financial plan to address its unsustainable operating costs. However, there is an escape route for affected jurisdictions: leaving the transit district. Six communities have left TriMet since 1988, and four have established their own districts. All of them provide better service at lower cost than TriMet. In this session, we will discuss TriMet’s financial condition and examine the experience of the four opt-out transit districts.

Admission is free. Please bring your own lunch. Coffee and cookies will be served. Space is limited to sixteen guests on a first come, first served basis, so sign up early.

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Surveying Government Planners Won’t Help

The State of Oregon is sending a survey to economic and community development “practitioners,” including city managers, county executives, elected officials, and local business owners. It asks what economic development projects the state should take on.

A state spokesman says, “We want stories and experiences and recommendations on how to get better.” Given that “free money” is always welcome, the inevitable huge response surely will be taken as a sign that finally the state can make the proper decisions about how to invest other people’s money, namely the taxpayers’.

Milton Friedman once said: “Nobody spends somebody else’s money as carefully as he spends his own.” When it’s your money, you make the best decisions you can because you not only reap the rewards, but you bear the losses when things don’t work out. However, when government officials spend taxpayer money, they simply don’t have the same incentives. They may have every intention of doing a good job, but whether they do or not they don’t personally earn the profits or suffer the losses. They simply send out another survey and try again some other time.

The best way to improve the economy of our state is to remove government planners from our personal and business lives. Then watch as our own freely made decisions in a self-organizing society and free-market economy do what they always do—cause our economy to flourish, grow, and create the kinds of progress central planners can never achieve.

Steve Buckstein is founder and Senior Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Drug Cartels, Not Cold Medicine Patients, Are the Enemy in Oregon’s Meth War

It seems that despite the best efforts of Oregon policymakers and law enforcement, methamphetamine (meth) abuse continues to ravage the Beaver State.

Recent media coverage has unveiled a newer, darker side of the Oregon drug scene—Mexican drug cartels trafficking meth into our state. In the past, they were a fringe sideshow; more meth was produced locally. That has changed. They are now the dominant supplier. And the meth problem has become less predictable, more expensive, harder to spot, and generally more violent.

The infiltration of drug cartels is the logical outcome of the state’s steady decline in local meth production. Since 2005, Oregon, along with surrounding Washington and California, began to see a drastic drop in the number of meth labs busted in the state. Compounding that trend, policymakers adopted a strict new law in 2006 that required residents to obtain a prescription in order to purchase cold and allergy medicines containing pseudoephedrine, a precursor to meth production. The impetus for the new restriction was the belief that by restricting the sale of pseudoephedrine, meth would be kept out of the hands of criminals, and meth abuse in our state would be impacted.

The outcome has turned out to be quite the opposite. As local meth production declined, generally for reasons separate from Oregon’s pseudoephedrine prescription law, violent Mexican drug cartels have been able to infiltrate so much of the state that they have become impossible to ignore. As was pointed out recently by The Oregonian in an exposé on the topic, the Mexican meth now flowing into the state has the added benefit of also being cheaper and more potent than any other meth on the market. As a result, meth abuse, and related meth crime, hasn’t decreased in the least. Indeed, the 2013 Oregon High Intensity Drug Trafficking Area’s Threat Assessment and Counter Drug Strategy report surveyed law enforcement across the state who said that meth remains the number-one cause of property crime and violent crime. Meanwhile, the Office of National Drug Control says that Oregon meth seizures have been trending upward since 2008; and the Drug Enforcement Administration (DEA) conservatively estimates that 80% of the country’s meth now comes from over the southern border.

But all of these facts still don’t change the minds of those who are convinced that Oregon’s prescription laws for pseudoephedrine successfully cured the state of its meth problem. Oregon’s experience is referenced often as the model solution. Even a recent federal Government Accountability Office (GAO) study cites Oregon’s success in enacting proactive legislation as the reason for its progress. In reality, however, Oregon’s prescription law is not responsible for the state’s drop in meth labs, and its meth problem is anything but solved.

Last year, Cascade Policy Institute performed a study to determine whether Oregon’s prescription mandate was the reason for the state’s reduction in meth labs. The findings were enlightening. Our study concluded that while Oregon had seen a dramatic drop in meth labs between 2004 and 2010, it was not a result of a prescription mandate. We were able to draw that conclusion by looking at regional trends and timelines. Other western states including California and Washington saw similar declines without the passage of prescription laws. And by breaking the data down by year, we found that the vast majority of Oregon’s decline in meth production took place prior to the passage of any prescription law.

Our research was meticulous, reliable, and verifiable. It has since been confirmed by other researchers, including most recently by Siddharth Chandra of Michigan State University. Dr. Chandra conducted his own study in response to the above-mentioned GAO report, criticizing it for its methodology. Noting that the report fails to account for regional trends, he determines that the GAO falsely attributes a decline in meth labs to Oregon’s strict prescription laws. His conclusions are accurate and consistent with Cascade’s.

The fallacy of the Oregon experience has lived on long enough. It is time for policymakers across the country to understand that Oregon’s prescription law for pseudoephedrine has failed to achieve its goals. Meanwhile, honest Oregonians who simply want to buy effective cold medicine over the counter have been forced to suffer due to tight restrictions on their personal freedoms. If progress is to be made in the fight against methamphetamine abuse, an honest discussion must take place. It is time to admit the failure of prescription laws for pseudoephedrine.

Steve Buckstein is Founder and Senior Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

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Why Was Moody Avenue Shut Down―Again?

Last week, TriMet proudly announced that the tracks for Milwaukie light rail had successfully been laid in the South Waterfront district to allow light rail to cross SW Moody Avenue next to the new OHSU construction project. When finished, there will be a light rail stop at that location, and the train will then go up and over the new Willamette River bridge.

What TriMet did not say in its press release is that SW Moody had already been torn apart, raised 14 feet, and rebuilt over an 18-month period ending June 2012. The tab for this retrofit was $52 million. The whole point of raising the road was to allow the Milwaukie light rail line to cross it at grade. Thus, the light rail tracks should have been laid when the entire road was being rebuilt during 2011.

The most recent retrofit shut down Moody Avenue for three weeks and required the complete removal of the Portland streetcar tracks for the third time in three years. This was a severe inconvenience to South Waterfront workers and a waste of taxpayer money.

TriMet has yet to publicly say how much this second retrofit cost, nor has the agency explained why it was done 15 months after the first rebuilding. An explanation is in order.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

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What Would Jefferson Say to the Little Sisters of the Poor?

In 1804 an Ursuline nun in New Orleans asked Thomas Jefferson to clarify in writing her religious community’s right to retain their property and to continue their ministries without government interference following the Louisiana Purchase. As French Catholic Louisiana was being incorporated into the Anglo-Protestant United States, the nuns were concerned about the status of their institutions under U.S. law. President Jefferson assured her that the government would not interfere with the sisters’ property, ministries, and way of life. In a letter dated May 15, 1804, he wrote:

“I have received, holy sisters, the letter you have written me wherein you express anxiety for the property vested in your institution….The principles of the constitution and government of the United States are a guarantee to you that it will be preserved to you, sacred and inviolate, and that your institution will be permitted to govern itself according to its own voluntary rules, without interference from the civil authority.”

Jefferson confidently promised that the American Constitution would protect the nuns and that the government would leave them alone. So why don’t Catholic sisters today even qualify for a religious exemption from ObamaCare’s insurance mandate that requires contraception and abortion coverage? It may seem unbelievable, but according to the Obama Administration’s definition of “religious employer,” sisters are not included.

Last year the Department of Health and Human Services (HHS) directed almost all employers to include coverage of contraceptives and abortion-inducing drugs in their employee health insurance policies, or else pay a fine of $100 per employee, per day. HHS subsequently published a final rule that requires many health insurers to charge all enrollees to cover the cost of elective abortions.

The “HHS Mandate” has a narrow conscience exemption that applies only to organizations whose purpose is solely to inculcate religious values and which employ and serve primarily members of their own faith. The exemption does not include religiously affiliated or faith-based institutions which serve all people without discrimination (like hospitals, colleges, schools, and social service agencies). And it doesn’t apply to communities of nuns.

Because of this, the Becket Fund for Religious Liberty filed a lawsuit September 24 in federal district court in Denver on behalf of the Little Sisters of the Poor. The Sisters are a nearly 200-year-old religious community dedicated to caring for the elderly poor. They run 30 homes in the U.S. (four in the West) and care for nearly 13,000 people in 31 countries.

“We cannot violate our vows by participating in the government’s program to provide access to abortion-inducing drugs,” said Sister Loraine Marie, a superior of one of the American provinces of the Little Sisters community.

“The Sisters should obviously be exempted as ‘religious employers,’ but the government has refused to expand its definition,” said Becket Fund senior counsel Mark Rienzi. “These women just want to take care of the elderly poor without being forced to violate the faith that animates their work. The money they collect should be used to care for the poor like it always has―and not to pay the IRS.”

According to the Becket Fund, the lawsuit “is the first of its kind both because it is a class-action suit that will represent hundreds of Catholic non-profit ministries with similar beliefs and because it is the first on behalf of benefits providers who cannot comply with the Mandate.”

Jefferson explained to the Ursuline nuns that American law would protect them and their institutions, regardless of the differences among American citizens:

Whatever the diversity of shade may appear in the religious opinions of our fellow citizens, the charitable objects of your institution cannot be indifferent to any; and its furtherance of the wholesome purposes of society, by training up its younger members in the way they should go, cannot fail to ensure it the patronage of the government it is under. Be assured it will meet all the protection which my office can give it.

“I salute you, holy sisters, with friendship and respect.”

Like the Ursuline nuns of Jefferson’s time, the Little Sisters of the Poor seek to secure their right to live out their faith through service to those in need. Catholic sisters do not give up their religious freedom when they establish nursing homes―or any other ministry. We can imagine what Thomas Jefferson might think of American women having to sue the Obama Administration to defend their First Amendment rights. But can we doubt he would be dismayed by how intrusive and coercive the federal government has become since the day he wrote so cordially to a group of French nuns about the safeguards of the American Constitution?

Kathryn Hickok is Publications Director at Cascade Policy Institute, Oregon’s free market public policy research organization.

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