Some surprising words of wisdom from Ron Unz

Conservative activist Ron Unz would not exactly be my go-to person for economic analysis, but Mike Konczal draws attention to a 2012 article of Unz’s making the conservative case for increasing the minimum wage. Some choice quotations (footnotes omitted):

On what the “jobs of the future” really are: Since economists and policy analysts tend to have advanced degrees and many leading journalists these days are Ivy League alumni, their employment perceptions may often diverge from reality.

Consider that only 20% of current jobs require even a bachelors’ degree. More than 30% of Americans over the age of 25 have graduated college, so this implies that one-third or more of today’s college graduates are over-educated for their current employment, perhaps conforming to the stereotype of the college psychology major working at Starbucks or McDonalds.

On the economic effects of a minimum-wage increase: [T]he net dollar transfers through the labor market in this proposal would generally be from higher to lower income strata, and lower-income individuals tend to pay a much larger fraction of their income in payroll and sales taxes. Thus, a large boost in working-class wages would obviously have a very positive impact on the financial health of Social Security, Medicare and other government programs funded directly from the paycheck. Meanwhile, increased sales tax collections would improve the dismal fiscal picture for state and local governments, and the public school systems they finance.

On the EITC subsidy as a poor substitute for increased low-end wages: Although popular among politicians, the EITC is a classic example of economic special interests privatizing profits while socializing costs: employers receive the full benefits of their low-wage workforce while a substantial fraction of the wage expense is pushed onto the taxpayers. Private companies should fund their own payrolls rather than rely upon substantial government subsidies, which produce major distortions in market signals.

Even leaving aside the absurdity of young people spending years of their lives studying business theory or psychology to obtain jobs which traditionally went to high school graduates, the financial cost is enormous. A generation or more ago, expenses at solid state institutions and similar colleges were fairly low, and could mostly be financed by small grants, parental savings, and part-time student jobs. […] Last year, the total volume of outstanding student-loan debt passed the trillion dollar mark, now exceeding either credit-card or auto loan debt.

On the “education bubble”: The aggressive marketing tactics of for-profit colleges and the student loan industry have disturbing parallels with the sub-prime lenders who played a destructive role in the Housing Bubble. […] If college enrollments were reduced to those who actually wanted or needed a college education, supply and demand would begin deflating our Higher Education Bubble, forcing a sharp drop in ever-escalating educational costs. Since government loans and subsidies would be targeted at a much smaller pool of students, they could be made more generous, reducing the debt burden on those who do still seek a degree.

He implicitly describes the role of for-profit colleges and student-loan marketers as that of “parasitic side-beneficiaries”. Strong stuff, especially for a conservative. Read the whole thing.

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