Three Economic Reasons to Ignore Saturday’s “Moral” March

There are a lot of reasons to not attend this Saturday’s HKonJ “Moral March on Raleigh.”

First, there is a 90 percent chance of rain in Raleigh, on Saturday. Not an ideal weather situation for an outdoor event.

However, and more importantly, the policies that the crowd will be clamoring for are dangerous for our nation and North Carolina. It is important to make clear, in this time of political screaming matches, that the conversation should be about good policy and not personality or gimmicks.

The North Carolina chapter for the NAACP appears to be the primary sponsor of the event, and I agree that this nation needs a serious conversation over issues of race.  However, this event has taken a “Big Tent” approach, as opposed to the stated mission of the NAACP which is “to ensure the political, educational, social, and economic equality of rights of all persons and to eliminate race-based discrimination.”

Instead the “Moral March on Raleigh” (This name is laughable when you get into the substance of the event. Does morality really boil down to increasing government control of our daily lives? Or is this name simply well message-tested?), is focused on all issues from the progressive left of North Carolina. The website for the March includes Mobilization Packets, which are broken down into the following policy areas:

• Criminal Justice
• Democracy and Human Rights
• Economy
• Education
• Environment
• Health Care and Women’s Rights
• Immigration Rights
• Labor
• Peace

 

I am not going to be heavy-handed – like some on the progressive left – and say that all of the policies in these packets are wrong because I believe in reasoned debate on real issues.

However, these Mobilization Packets contain some real policy head turners. Below are my top 3 economic policy reasons to ignore the “Moral March on Raleigh.”

 

1) The March will call for the state to “Raise the state minimum wage to $15 per hour and allow for inflation, requiring State Contractors to pay all employees and Subcontractors a ‘living wage’ plus benefits.”

For just a moment, let’s skip over the fact that a “living wage” is nearly impossible to define. What are the implications of a $15 per hour minimum wage?

In North Carolina, the economic impact could be catastrophic. A 2016 report by the Heritage Foundation found that raising the state minimum wage to $15 per hour (beyond the federal minimum) would result in 367,000 lost jobs in North Carolina. That is because raising the minimum wage increases mandatory labor costs, and multiple studies have found that this type of policy causes businesses to reduce lower-skill labor in their workforce.[i]

An additional 367,000 unemployed workers is not a moral economic vision for North Carolina.

2) The March will call for “Termination of the assault on teachers and other public employees such as first responders and law enforcement, and acknowledge their right to collective bargaining.”

The Marchers are going to have a difficult time convincing the public that an “assault on teachers” exists, particularly when teachers have received multiple pay increases over the past few years.

However, why should North Carolinians want collective bargaining (read: unionization) of public employees? The very nature of government-provided services — such as policing, putting out fires and K-12 education of our children — gives government a monopoly or near monopoly. Allowing public employee collective bargaining raises the prospect of future workers strikes, and striking public employees could therefore hold the public hostage and harm the common good.

Allowing collective bargaining for employees opens North Carolina up to fiascos like the infamous Chicago Teacher Strike in 2012, when schools were closed for eight days due to a teacher strike over school day length and performance evaluations.

Exposing North Carolina communities to the risk of public service strikes is not a moral vision for North Carolina.

 

3) The March will call for the state to “Expand Medicaid-close the coverage gap.”

Medicaid was created in 1965 as a health insurance program for low- income individuals, but instead has ballooned into a broken, costly program. Its eligibility has expanded over the years to include the disabled, children and pregnant women. States have little control over the program, and essentially function as the administrative arm of the federal government.

Under Obamacare, states have the choice to expand Medicaid eligibility to individuals earning up to 138 percent of the federal poverty level. The equates to approximately $28,179 for a family of three.

However, expanding Medicaid is not a morally good policy option for North Carolina.

Why?

First, Medicaid often provides sub-standard care, which leads to worse health outcomes for enrollees. Yes, more people will have insurance, but insurance is not healthcare. Multiple studies show that Medicaid patients have worse health outcomes than other insured patients. At best, according to a study published in the New England Journal of Medicine, “Medicaid coverage generated no significant improvements in measured physical health outcomes.”

Second, Medicaid expansion is expensive. Medicaid expansion under Obamacare means that the federal government pays 100 percent of the expansion cost for three years, then the state takes on 10 percent of the cost after the third year. Expanding Medicaid in North Carolina means adding at least 400,000 new enrollees to Medicaid rolls, which means significant additional cost to the state budget. Paying for this new cost will have to come from a revenue increase – likely from increased taxes – which means more people will be out of work and move to Medicaid for insurance. Thus, Medicaid is too expensive of a risk for North Carolina and keeps low-income families in a vicious cycle of poverty.

Medicaid expansion is not a moral vision for North Carolina.

The Moral March, it appears, is struggling to find a moral vision for North Carolina. Forcing people out of work, holding communities and families hostage to union bosses, and expanding government health insurance with questionable cost-benefit is not moral or compelling. It’s simply a vision to expand government power and the special interest groups that want to control it.

 

[i] “The Own-wage Elasticity of Labor Demand: A Meta-regression Analysis,” European Economic Review, Elsevier, Vol. 80(C) (2015), pp. 94–119.