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October 8, 2018 Rule of Law

Wealth transfers won’t raise working families’ prospects

John Horak
By John Horak

The HBJ wrote a story Aug. 28 (“Report: Despite rising wages for working class, more help needed”) describing a policy report published by Connecticut Voices for Children, a New Haven-based nonprofit that pushes progressive policies.

The report, “The State of Working Connecticut — Wages Stagnant for Working Families,” argues that despite recent signs that the state's economy is growing and wages for low-wage workers are increasing, working families continue to struggle to reach a decent standard of living.

The proposed solution: Increase the minimum wage to $15 per hour and restore the Connecticut earned income tax credit.

I am not writing to take issue with the statistics cited in the paper (from the progressive Economic Policy Institute), the interpretation of the statistics, or with the minimum wage or earned income tax credit for that matter.

I am writing about the uncomfortable similarity between the method Voices for Children relies upon in its policy report, and the method relied upon by the individuals now frequently seen at highway off ramps in the area holding cardboard signs asking motorists for money. In both cases, a hardship is described (in a policy report or on a cardboard sign) with an appeal to transfer money from some people (employers, taxpayers or motorists) to other people (those with the hardships).

I am not being glib. I don't know anyone who wants to silence the voices of needy children, or who takes pleasure in struggling families, or who doesn't want to see working people prosper. I am suggesting that systems based on transfers are messy, inexact and divisive — compared with methods that enable economic growth generally and afford able people wanting to work an opportunity to a decent standard of living, if not prosperity.

Let me state it this way: Why does an organization with the resources and brain power of Voices for Children rely on the “hardship-transfer” method when it could help more people by finding ways to bring more businesses into the state. For example, why not publish a policy study detailing what it would take to cause a corporation like General Motors to re-open the Ball Bearing plant in Bristol that was closed in 1997?

I suspect that Voices for Children is caught in an intellectual feedback loop of its own making, an economic algorithm that eventually leads to the destruction of the system it purports to assist.

It's all there in the position paper, as follows:

First, on the one hand, the position paper bemoans the fact that business and economic growth have not been enough to raise wages — the irony of which is breathtaking given the hostility to business and free enterprise inherent in the progressive movement. You can't have it both ways.

Second, the paper bemoans the fact that we have lost more public-sector jobs than we have gained in private-sector jobs, to which my response is hallelujah — may the trend continue! Where do the progressive voices think the money to pay state workers comes from? State government lives off the profits that our businesses earn.

Third, the paper blames decades-long poor policy choices that have left us “struggling with a budgetary crisis.” I agree, but the poor choices were largely progressive choices that have hurt the business climate while leaving us overburdened with obligations to government.

Let me close by being completely transparent. I have never given money to the highway people. The only time I talked with one was after passing a billboard on I-84 on which Whole Foods was advertising job openings at $15.50 per hour.

The young highway man I mentioned this to told me he had lost his wallet and without identification could not apply for a job. He was still there a few days later. Maybe his hardships were real, but maybe not, and that's the problem.

John M. Horak is the director of TANGO Nonprofit Education and Consulting. His opinions are his own.

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