November 2012 — Laissez FaireLaissez Faire

From the New York Times:

After three years of working at the McDonald’s restaurant on 51st Street and Broadway, Alterique Hall earns $8 an hour — and is yearning for something better.

So when he heard about an unusual campaign that aims to unionize dozens of fast-food restaurants in New York in the hope of raising wages to $15 an hour, Mr. Hall, 23, was quick to sign on.

“It’s time for a change,” he said, “It’s time to put on the gloves.”

Mr. Hall has enlisted in what workplace experts say is the biggest effort to unionize fast-food workers ever undertaken in the United States, a campaign that will be announced publicly on Thursday. The effort — backed by community and civil rights groups, religious leaders and a labor union — has engaged 40 full-time organizers in recent months to enlist workers at McDonald’s, Wendy’s, Domino’s, Taco Bell and other fast-food restaurants across the city.

Over the decades there have been occasional efforts to unionize a fast-food restaurant here or there, but labor experts say there has never before been an effort to unionize dozens of such restaurants. The new campaign aims in part to raise low-end wages and reduce income inequality, and is also an uphill battle to win union recognition.

Ruth Milkman, a sociology professor at the City University of New York, said there had been so few efforts to unionize fast-food workers because it was such a daunting challenge.

“These jobs have extremely high turnover, so by the time you get around to organizing folks, they’re not on the job anymore,” she said. Nonetheless, she said the new effort might gain traction because it is taking place in New York, a city with deep union roots where many workers are sympathetic to unions.

Jonathan Westin, organizing director at New York Communities for Change, a community group that is playing a central role in the effort, said hundreds of workers had already voiced support for the campaign, called Fast Food Forward.

“The fast-food industry employs tens of thousands of workers in New York and pays them poverty wages,” Mr. Westin said. “A lot of them can’t afford to get by. A lot have to rely on public assistance, and taxpayers are often footing the bill because these companies are not paying a living wage.”

I was about to spend a bunch of time explaining why this is foolish, but it just occurred to me, Yaron has already taken care of that. See yesterday’s Yaron Answers. Also check out chapter 19 of Henry Hazlitt’s classic Economics In One Lesson (available for free here).

Yaron recently was interviewed on the Stansberry Radio show where he discussed Objectivism, healthcare and a free market revolution. You can listen to the whole thing here.

John Cochrane notes that some people have been “advocating that even a 91% federal income tax rate, on top of state, sales, etc, as we had in the 1950s, (not counting all the loopholes!) will actually be good for the economy and also raise lots of revenue.” I’ve definitely heard that. But as Cochrine notes, it’s a fantasy. “Europe has been running a very useful set of experiments on what happens if you address yawning deficits with high income, wealth and property taxes.” He goes on to quote a recent article in the Telegraph.

Almost two-thirds of the country’s million-pound earners disappeared from Britain after the introduction of the 50p (percent) top rate of tax, figures have disclosed.

In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs.

This number fell to just 6,000 after Gordon Brown introduced the new 50p top rate of income tax shortly before the last general election. . . .

It is believed that rich Britons moved abroad or took steps to avoid paying the new levy by reducing their taxable incomes.

George Osborne, the Chancellor, announced in the Budget earlier this year that the 50p top rate will be reduced to 45p from next April.

Since the announcement, the number of people declaring annual incomes of more than £1 million has risen to 10,000.

However, the number of million-pound earners is still far below the level recorded even at the height of the recession and financial crisis. . . .

Far from raising funds, it actually cost the UK £7 billion in lost tax revenue

Whole thing here.

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