Santa Fe “Living wage” law reduces employment
Santa Fe has made news recently with plans to increase the City’s minimum wage to as much as $10.32. This is certainly not a cause for celebration. Rather, as the Hoover Institute points out in a new brief, “As the wage demanded increases, the jobs offered in the labor market will decline.”
The paper goes on to note that, “after the wage level was increased, unemployment rates did move sharply upward. Some of today’s workers will be lucky enough to ride the living-wage tide upward, but others are likely to be cast aside.” These and other regulations have not made the City a high-unemployment city, but Santa Fe continues to grow less-quickly than other cities in the state.
Of course, it is only intuitive that forcing businesses to pay more for employees will reduce employment, but it bears repeating.
A Watchdog for Conservative Ideals
Our friends to the West at the free market think tank Goldwater Institute recently received some good publicity in, of all places, The New York Times. The article clearly showed the Institute to be a principled, conservative voice for free markets and limited government.
It detailed some of the organization’s successes, including upsetting Sen. John McCain. While we at the Rio Grande Foundation don’t have the same resources, or the same conservative political climate as our neighbors to the West, an organization like Goldwater gives us a model and a clear understanding of just how effective a state think tank can be.
If you agree and want to help us truly become the “Goldwater of New Mexico,” donate to the Rio Grande Foundation here.
The latest on the EPA’s New Mexico power grab
William Yeatman of the Competitive Enterprise Institute previously wrote a paper on the issues surrounding the Four Corners Power Plant and the EPA.
He recently posted an update on the situation on his blog here.
Improving education key to surviving economic transition
Recently in the Business Journal Winthrop Quigley discussed the transition taking place in our economy. Key to that transition is an educated, innovative work force. The problem is, as I pointed out in the following letter to the editor, our education system — especially in New Mexico — is woefully inadequate for preparing tomorrow’s work force.
Albuquerque Journal Business Outlook
Winthrop Quigley, in a wide-ranging analysis of the current economy through the lens of Nobel laureate economist Joseph Stiglitz, makes the point that the US economy is in a state of transition that has exacerbated our current economic woes. He further notes that the US workforce is lagging behind in terms of needed skills. This, as our country and world shift away from a manufacturing economy and towards an information and knowledge economy.
This issue should be especially noteworthy for New Mexico policymakers as our state repeatedly comes in at the bottom of the pack relative to the nation as a whole in terms of educational achievement. Of course, in a globalized economy, workers in our state – and by extension the educational system that produces them – are not just competing against other Americans, but also Chinese, Indians, and others.
To say that education reform is an economic issue is to re-state the obvious, but our business community needs to engage in the upcoming legislative session and demand reforms that will allow for greater educational choice and accountability.
Both our nation and our home state of New Mexico face major economic changes. We will only survive and thrive in this transition with an educated and competitive workforce.
Paul J. Gessing
President
Rio Grande Foundation
Indian reservations: tomorrow’s free market bastions?
Everyone in New Mexico is aware that Indian tribes are not beholden to state laws on gambling in the same way that other entities are. The interesting thing is that gambling could be just the start and, if they decide to be entreprenurial, tribes could be a useful check against government overreach.
The latest example is the payday loan industry. A few years ago, the Legislature and Gov. Richardson decided that they, not those seeking loans, knew better what terms money should be lent at. While I am certainly not going to run out and get a payday loan, the fact that some people need them is understandable.
Now, with tribes getting into the loan business, the fact is that consumers will have access to the loans regardless of New Mexico law. This is a good thing and I look forward to more efforts by the tribes to take advantage of/check the spread of draconian state laws.
‘Fracking’ Essential To Future
Mora County Commissioner John Olivas wants a ban on oil and gas drilling in Mora County because he is concerned with the environmental impact of a drilling process named hydraulic fracturing – or “fracking,” as it is colloquially called.
Mora County is not alone in its concern about fracking. Santa Fe, Rio Arriba and San Miguel counties have halted or discouraged drilling and fracking with ordinances and moratoriums.
Fracking involves a process wherein, once a well has been drilled to hydrocarbon-bearing rock (usually shale), the rock is blasted by a mixture of water, sand and chemicals. Fractures in the rock then allow the trapped gas or liquids to make their exit.
Why are county commissioners in New Mexico jumping on the “ban wagon”?
Maybe they have been watching too many Michael Moore-like documentaries on Netflix. An Oscar-nominated documentary, “Gasland,” says that fracking contaminates our water supply with chemicals. In the movie, some homeowners set their tap water on fire. Industry experts maintained that the film was fraught with errors and misinformation, but nevertheless it dealt fracking something of a blow.
The movie got a lot of attention (maybe Commissioner Olivas’?), but the movie’s arguments against fracking turn out to be deceitful.
Apparently, the dramatic tap water blaze had little to do with fracking. In many parts of America, there is enough methane in the ground to leak into people’s well water. The best fire scene in the movie was shot in Colorado, where the filmmaker is in the kitchen of a man who lights his faucet.
But Colorado investigators went to the man’s house, checked out his well and found that fracking had nothing to do with his water catching fire. His well-digger had drilled into a naturally occurring methane pocket.
It’s not overstating the case to say that unconventional hydrocarbons have shifted the world’s energy balance of power. The “shale gale” has spread the wealth around. Vast volumes of hydrocarbons are not just Middle Eastern plays anymore.
This shift has been enabled by new technology, revolutionary, really. Across the world, we’ve seen vast, stunning improvements in applied mathematics and computational abilities. Just on that basis along, today’s energy industry works with much-better exploration tools than in the past, better seismic and geochemistry.
Then there are new dramatically improved capabilities in directional drilling, with better drill bits and better fluids. After the holes are drilled, there’s fracking. The modern energy industry has more powerful pumps, more control of down-hole pressures and even better nanomaterials for holding the cracks open in the fractured shale and other tight rocks. What’s more, there are better post-completion treatments.
Here, in the U.S., the shale gale has eliminated the need for liquefied natural gas imports, likely for several decades and perhaps longer. In addition, the shale gale has the potential to significantly reduce Russia’s influence over the European natural gas market. At the same time, the shale gale will dramatically diminish the “petro power” of other major OPEC players, such as Iran and Venezuela.
Fracking plays a very important role in energy production nationally and in New Mexico.
A recent report from the American Petroleum Institute concluded that if Congress were to place additional federal regulations that govern the oil and gas industry practice of fracking, the number of new U.S. wells drilled would plummet 20.5 percent over a five-year period.
The oil and gas industry provides significant revenues to the state of New Mexico and local municipalities. For fiscal 2010, oil and gas revenue payments in the form of taxes, royalties and other revenues totaled nearly $2.2 billion – that represents a 27 percent contribution to the state’s general fund.
Natural gas is not risk-free, but no energy source is. Perfect is not one of the choices, Commissioner Olivas.
Thomas Molitor is an adjunct scholar with the Rio Grande Foundation in New Mexico and a regulatory analyst with the American Action Forum in Washington D.C.
Why can’t Santa Fe do transparency?
I provided a few comments for this article which appeared in the Santa Fe New Mexican. Seems like the City of Santa Fe would rather not post salaries at all if they can’t provide a searchable database like the City of Albuquerque has done.
Certainly, Albuquerque’s efforts at transparency are to be emulated, but that doesn’t mean you can’t start somewhere. In the meantime, check out what we got when we requested payroll information from the City of Santa Fe.
An optimistic note for the New Year: China not to be envied
I ran across this excellent column from Jonah Goldberg awhile back. Simply put, while China is to be applauded for adopting freer markets that have helped bring hundreds of millions of people out of poverty, the United States is still in a better position, especially when it comes to living standards.
Certainly, China has surpassed the US in SOME aspects of economic freedom, but, as the Heritage Foundation’s annual rankings show, it has a long way to go. As Goldberg notes, however, the left in particular seems to have a China fetish when it comes to government planning and “green” subsidies.
The major problems in the US are over-spending and over-regulation, but they pale in comparison to those of governance and basic freedom in China.
In: Uncategorized
Rhode Island shows New Mexico the way on pension reform
The fact is that government pension reform is essential if New Mexico is going to survive economically. The commitments that have been made by our state (and other states) were never viable because they were political, not economic decisions. The Rio Grande Foundation has been a leader in pointing this out here and here, for example. Also, check here for an outrageous case-study.
While Wisconsin Gov. Scott Walker has been a national lightning rod for the unions, but Rhode Island, a liberal state controlled by Democrats may provide New Mexico’s liberal politicians with both a model and a cautionary tale. This report on the reforms enacted in Rhode Island was enlightening to say the least.
While unpopular with government employees who seem to believe every promise, no matter how unbelievable, Rhode Island’s political leaders understood that the state was on its way to insolvency if something was not done. And, unlike many New Mexico Democrats who seem to believe that higher taxes are a panacea, Rhode Island’s made tough, sometimes unpopular decisions, in the wake of opposition from one of the best-funded, best-organized special interests around (government employee unions).
So, kudos to Rhode Island and my fellow New Mexicans, it is time to get serious pension and benefit reform!
In: Uncategorized
What is the mission of higher education in NM?
I co-authored an article on NMPolitics.net on our efforts to better understand what taxpayers are spending their money on in terms of higher education. Check it out here.
Our full report on the issue can be found here.
