According to an article in the Des Moines Register, The American Association of University Women (AAUW) issued their annual report on the “pay gap” between women and men. According to the report, women in Iowa earn about $10,000 less per year than men. This article, and the related report, are excellent examples of misuse of meaningless statistics. (See link below.) Comparing the median pay for all women with the median pay for all men tells us nothing about whether or not sex discrimination is taking place. A valid analysis would compare the pay of women and men who do the same work for the same employer. The report by the AAUW did not do that.
This report tells us more about the bias of the AAUW than it does about bias in the workplace. As you reported, Kim Churches, chief executive officer of AAUW, said, “It’s unacceptable. There is no gender differentiation when it comes to quality, skills, and talent. It’s time to close this gap and give every woman in Iowa and across the country the salaries they deserve.” She advocated for more regulation.
Based on the facts given in the article, and assuming that women and men can and do perform equally, then it is fair to presume that the AAUW would agree that if any woman wants to earn the same pay as a man, then they should go for the same jobs that men go for. When the relevant qualifications, working conditions, and job duties are accounted for, the difference in pay between women and men reduces dramatically. The pay gap has been reducing for years. Our current laws are working. We don’t need to add more regulations.
In today’s Des Moines Register, the guest opinion by Kollan Kolthoff was very vague in his call for “common sense reform” of the licensing of cosmetologists. (See link below.) He wrote, “…leaders from within the industry are uniquely aware that there are problems that need to be addressed.” I presume the industry leaders he refers to are existing licensed cosmetologists and licensed schools of cosmetology. After a person has completed the 2,100 required hours of education and paid as much as $20,000, it is very understandable that they would not want to see license requirements significantly lowered – thereby indirectly lowering the value of what they have already paid for. Similarly, licensed schools of cosmetology have a very strong financial incentive to maximize the number or hours of schooling required for a license.
He also wrote Iowa needs reform that, “…protects consumers against the deregulation of licensed beauty professionals.” Deregulation does not and should not mean a lessening of regulation to keep consumers safe. Deregulation should focus on removing regulations that have the primary purpose of protecting the income of existing cosmetologists and schools of cosmetology.
The same issues apply to a large number of occupations that require a license from the state. Most calls for licensing, and opposition to deregulation, come from existing businesses and licensees, not from the general public. Our elective representatives should establish a process to review and reduce licensing requirements in Iowa so that only public safety is is taken into account when requiring Iowans to get a license from the state before being able to work in any particular job.
Only government could create a situation like we have with the casinos and the dog racing industry. Casinos want to pay the dog racing people $92 million so that they won’t be required to continue to subsidize dog racing.
In any kind of free market situation, the casinos would either shut down the dog tracks or sell them to a private investors, if any could be found. In a free market, casinos would have competition. But, in Iowa, the casinos are protected from competition by government. Recently the Racing and Gaming Commission ruled against a couple of proposed new casinos because they would “cannibalize” other casinos. So, casino profits are protected and dog owners get bailed out. This is cronyism at its best.
The only good thing about this whole situation is that taxpayers are not on the hook.
“Iowa has enjoyed tremendous economic benefits by being a leader in both wind power development and wind manufacturing.” So wrote Mike Prior, Milford, interim executive director, Iowa Wind Energy Association, in a letter to the editor on 2/4/2012, (“Wind energy is important jobs provider”) He went on to extol the many benefits that Iowans have enjoyed as a result of the funding that taxpayers have provided to those in the industry. He urged that we, “… continue to invest in Iowa’s future.”
Good economic analysis must consider both what is seen and what is not seen. We see the jobs. We see the payments to farmers. What we don’t see are the other jobs that would have been created if people had been left to spend or invest their own money. Other jobs would have been created that would not be dependent on government handouts. Instead, we hear a never-ending story about how we must continue to provide taxpayer support or the investment and jobs will be lost. This is very typical when government creates new “incentives” and makes “investments” in what should be left to the private sector.
Welfare for wind energy producers is like all other special interest giveaways: the benefits are large and concentrated among the few who who are politically connected, and and costs are relatively small and disbursed among many taxpayers. This is a classic case in public choice theory. Those who directly benefit have a great incentive to lobby government to continue the subsidies, and those who pay the taxes don’t have a strong incentive to oppose any specific program.
We need legislators who will stand against political favors for special interest factions who press their political power for their own self interest.
Link to Register article: http://www.desmoinesregister.com/apps/pbcs.dll/article?AID=2014302040081
It is not surprising that the Iowa Chamber Alliance advocates that the State of Iowa should provide more money to provide economic incentives for businesses to expand or locate in Iowa. (See The Des Moines Register, “Study: Iowa is losing its edge on incentives” 3/7/2013.) The economic incentives paid by States and municipalities to businesses have become obscene.
Our governments should not be in the business of trying to figure out which businesses or industries might be successful in adding good jobs in Iowa. When governments subsidize businesses, including farmers, we taxpayers take the risks and private individuals reap the benefits. This is not free-market capitalism, this is crony capitalism – where businesses that have political power are given special favors by governments.
It would be ideal if our U.S. Congress, using their Constitutionally granted Commerce Clause powers – to regulate commerce among the States, would prohibit the States from making any payments, or providing any subsidies that are not generally available to all businesses in the State. States would still be allowed offer general incentives, like lower taxes, but they would be prohibited from competing based on special incentive given to individual businesses.
Contrary to the letter to the editor in the Des Moines Register by Doris Render on 11/23/2012, “Taxpayers subsidizing low-wage businesses”, all private businesses, including those that pay low wages, add wealth to our community. People take jobs at Walmart because their next best option is a job that pays less, or possibly no job at all. There is no reason to believe that if our government stopped providing welfare benefits to poor people, that employers would start paying higher wages and benefits. Government welfare helps poor people, it does not subsidize business.
If businesses like Walmart were forced by government to pay higher wages and benefits, then prices will go up correspondingly. Those higher prices will hurt low income families the most. Sure, those who keep their jobs will benefit from a higher minimum wage. But those who are most vulnerable, those with the least skills, will lose their jobs as automation and foreign competition become more economical because of the higher wages.
History has proven that government attempts to control wages and prices are doomed to failure. Even today, our slow economic recovery is due in no small part to our government’s attempts to prop up housing prices and force all employers to pay for health insurance. Good intentions are no excuse for bad policy. The unintended consequences of government actions must always be considered when government uses force, (i.e. laws and regulations), to manage our economy.
Link to Register article: http://www.desmoinesregister.com/article/20121123/OPINION04/311230033/Letter-to-the-editor-Taxpayers-are-subsidizing-low-wage-businesses?Opinion&nclick_check=1
Contrary to the letter by Jack Hatch, the Obama administration and Congress were wrong in the way they handled the auto manufacturer’s bailout. (See The Des Moines Register, 11/3/2012, “Auto bailout saved many Iowa jobs, too”) Romney is correct that we should have followed established bankruptcy laws. The bankruptcy process would have allowed the companies to remain open and the jobs to not be lost. The companies could have reorganized their debt and equity and emerged from bankruptcy stronger. What actually happened was that politically favored creditors, such as unions, were given unfair preferences, and some unfavored creditors were cheated out of their lawful security. It is quite likely that Iowa manufacturers would have continued to supply their parts to the industry even if the law had been properly followed.