Friday, March 20, 2015
Junking states: Republican style
Insofar as Right-to-Work legislation under-prices a state’s labor – extracts less than consumers would be willing to pay – it draws down the income a state receives from the 49 other states, either from exports to or visitors from.
I understand there’s a lot of chicken/or egg-six/half-dozen in economics – but before legislators agree to Right-to-Work legislation, I think this concept would be a good place to start. If you build what they want, they will come and buy.
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Another conundrum: states will abate billions in tax giveaways in the hope of drawing thousands of jobs – but the very same states refuse billions in Medicaid giveaways (er, actually returning their own tax dollars) from the federal government which would fund tens of thousands of high quality medical jobs – not to mention bringing unquestionably needed health care.
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Illinois governor Rauner wants to squish the incomes of the bottom 50% of employees (keep the minimum wage low; wage war on unions public and private) who take 10-12% of overall income share – to make the state more competitive (with where: Bangladesh?). Poorer people get less education, become a lot less competitive, more educated people want to emigrate out of such an unproductive milieu.
Wisconsin governor Walker wants to cut straight to the chase on cutting education: $300 million off the state university.
Both Republican governors want to turn their big industrial states into South Carolina.