Crosby: A positive vision for New Haven

In his column Monday (“Taking our alderman to task,” April 18), Nathaniel Zelinsky took a misguided stand against the living wage proposal which recently passed out of committee, accusing Ward 1 Alderman Mike Jones ’11 of putting some putative desire to be a “social reformer” over the needs of his constituents. Zelinsky argues that the city must abdicate its moral responsibility to its workforce and ignore its own long-term economic well-being in order to bow before that clay-footed idol of “efficiency.” Further, his argument strongly suggests that Yale students have no stake or voice in confronting broad social issues in this city and should simply wash their hands of these matters altogether.

Let’s begin with the issue of New Haven’s living wage. The moral argument is a simple one: It is the responsibility of the city government to provide its workers with fair wages. As a citizen of New Haven, I don’t want my city’s workers to be trapped in poverty, whether they are employed directly by the city or via contractors. This was the impetus behind the original living wage ordinance in 1997, and this remains the impetus behind the new proposal; all it aims to do is keep the living wage in line with increases in the cost of living and extend it to cover more categories of city employees.

Updating the living wage is not only the right thing to do, but is also best for the long-term economic interests of the city. Those like Zelinsky who highlight our city’s budget issues are not wrong to do so, but the tired bogeyman of out-of-control city spending and extreme solution of drastic expenditure-slashing are neither the diagnosis nor the treatment our city needs. One of the most serious problems New Haven faces is its comparatively small tax base — and one of the most powerful solutions is to make sure that people who live and work in this city are able to find good jobs which pay enough for them to set up a life here. For the city to subsidize poverty is clearly a fiscally counterproductive strategy, but using taxpayer dollars to employ people at a wage level at which they are forced to turn to (also taxpayer-funded) social service agencies is doing just that.

But Zelinsky’s column didn’t just deal with the living wage ordinance. He also lambasted Alderman Jones for betraying the needs of his constituents — that is, us — in order to embark on what he called “flashy but flawed” policies of citywide reform. While the specific policy proposals Zelinsky advanced are not without merit — indeed, I commend him for his insistence on increasing transparency and accountability in our city’s police force — I am disturbed by the model of aldermanic action which Zelinsky sets forth, and even more disturbed by the conception of the relationship between Yale students and New Haven which seems to underlie it. I believe that New Haven’s problems also profoundly affect our lives as students, and we can and should be acting alongside other New Haven residents to solve them.

Do a quick search in your inbox for “Chief Ronnell A. Higgins.” Issues of crime and violence in New Haven have a profound impact on the experience of students at this university and are intimately linked to broad systemic issues of poverty and economic development in this city. I refuse to believe that Yale students (even those who, like me, receive a lot of financial aid) care more about paying a few cents in taxes on late-night G-Heav runs than about the systemic problems affecting this city. Too many Yalies pour too many hours into a wide variety of service organizations for this to be true.

I know that Zelinsky attacked Alderman Jones’ politics rather than Yalies’ service endeavors in his column. But I also know that my own service experiences have led me to a desire to transform the structures which make my service necessary. It is unfortunate that Zelinsky considers this type of expansive, progressive politics off-limits to Yale students.

Fortunately, most of our recent Ward 1 aldermen have not shared Zelinsky’s view. In working hard for just wages for city workers, Mike Jones ’11 is continuing a long line of Ward 1 aldermanic involvement in citywide issues: Josh Civin ’96 LAW ’03 and the original living wage ordinance, Ben Healey ’04 FES ’12 and recognition of domestic partnerships, and Rachel Plattus ’09 and New Haven Promise. I hope that Ward 1 aldermen to come — and Yale students in general — choose not to focus on a narrowly defined set of student economic interests but rather to work with the community to create the stronger New Haven that we all need — a better home for us all.

Ben Crosby is a sophomore in Pierson College.

Comments

  • Andreology

    Unfortunately, New Haven cannot afford this proposal. The most important thing that the city needs is a vibrant economy that attracts business. Any additional spending during this time of fiscal crisis will have the unfortunate result of raising taxes and chasing businesses away to North Carolina.

  • grumpyalum

    Most of New Haven’s industries that pay under the living wage aren’t going to magically move – they are almost all service-sector oriented businesses that orient themselves around meeting the needs of a captive market: yale students of all kinds and employees.

    There isn’t manufacturing left to scare way from the city.

    Anyway, I support this column! :)

  • Andreology

    “There isn’t manufacturing left to scare way from the city.” Yes, that is the point. It has moved south because the taxes are too high in Connecticut. We need to make this city so attractive to employers that they will come back, and low taxes are an essential component.

  • johnsteinbeck

    Andreology: Please read some history or just pay attention to current events. States in the south and west with so-called right-to-work laws and low wage standards haven’t magically risen from (or avoided) the economic crises that more “pro-labor” or “progressive” regions are enduring. In any case, the black, Hispanic, and rural white populations that have _always_ been less well-off are the same ones who are unable to benefit from high-tech research-triangle-esque jobs. The same goes with New Haven and its quick-fix science park developments. And the same goes with Yale’s developments, which have only brought prosperity to existing New Haveners inasmuch as labor and organized community have fought for it.

    Mr. Crosby makes a strong point about growing the city’s economic base from the bottom-up as a way of making the city more attractive. Same argument goes for prospective Yalies. Ask prefrosh why they’re considering choosing Harvard over Yale. Chances are “New Haven” will be one of their concerns, and that’ll have less to do with whether we cater to science park development and more expensive restaurants (via draconian budget schemes, of all things), and more to do with the surrounding “neighborhood.”

    Crime and poverty aren’t going anywhere without good jobs.

  • grumpyalum

    No, this is silly Andreology. If you are an industrialized nation, you’ll never win a race to the bottom. It is embarrassing that a corporation like Ikea outsources its labor to us, because we have people in the South who have been convinced that ANY job, at ANY wage, is a GIFT!

  • alsoanon

    @johnsteinbeck exactly — plus, Cambridge has a living wage of $13.69/hr.

  • Jaymin

    “Those like Zelinsky who highlight our city’s budget issues are not wrong to do so, but the tired bogeyman of out-of-control city spending and extreme solution of drastic expenditure-slashing are neither the diagnosis nor the treatment our city needs.”

    This isn’t just a political bogeyman! If you’re out of money, you need to eventually curb spending – it’s a basic truism (that apparently the government is exempt from). It disturbs me how quickly people are willing to borrow loads of money (which they conveniently aren’t liable to pay back) in pursuit of whatever good-intentioned social policy they have on their mind.

    Also, increasing the living wage doesn’t magically make people better off. If you’re making government departments pay more for their employees, then *ta-da*, they’re going to reduce their staffs accordingly. So, in return for making some people better off, you’re going to end up rendering others unemployed. This was actually a chief reason for such high unemployment during the great depression. In previous recessions, wages had typically fallen 9-10%, which allowed businesses and the economy to quickly recover and employees to keep their jobs. During the Great Depression, however, Hoover actively worked with businesses to ensure a steady wage rate, surely for humanitarian reasons. But, he inadvertently just caused massive unemployment. Eventually, by the early 1930s, wages were allowed to fall, but unfortunately, Hoover simultaneously raised the top marginal tax rate to 63%, perpetuating economic glum.

  • y_07

    While I don’t want to be associated with Andreology’s points, I do think that there are serious problems with this column. I do think there are serious questions about where money for a living wage would come from, there are several problems with grumpyalum’s response.

    First, the living wage would only apply to city contractors — meaning that the strain would be placed on the New Haven municipal budget. New Haven is already having money problems (and laying off police and making other cuts) and there’s no doubt that a living wage would require further cutbacks or tax increases. I do question whether it’s worthwhile to impose higher taxes and service cutbacks on the vast majority of New Haven’s residents who are neither students nor government contractors, and many of whom are no better paid than the government contractors whom this measure is intended to benefit.

    Second, I think grumpyalum has bought into a far too Yale-centric view: there are many city businesses which have nothing to do with Yale’s students whatsoever. Many of them cater to customers who come into the city from the surrounding suburbs, and these customers will certainly be affected by changes in price.

    I think Yale students should have the right to demand aldermen who pursue, to some extent, their collective interests. To a large extent, these interests are the same as those of all New Haven residents – for a safe and vibrant city. I think there’s little danger their their one alderman (out of 30) will have such disproportionate sway and enforce their unique interests over those of the city at large (especially since the ward 1 alderman always has the least seniority), and I do think that it would be good for the city at large to hear and better understand the unique concerns of the student population.

    Last point: I think it’s unfair to sell the living wage as Yale vs the rest of the city. The measure has been proposed before, and has been rejected by the mayor and the majority of the aldermen (and again, only 1 of 30 represents the students). In fact, if anything, since Jones is one of the measure’s biggest supporters, at this point the measure is of Yale student representation pushing a measure which is opposed by a majority of New Haven’s non-student residents.

  • graduate_student

    Some of the commentators above fall back on the old market principle “increased wages means decreased employment”; however, wages have remained stagnant or have fallen for the majority of Americans over the past few decades, all while unemployment has risen and real employment has fallen.

    That principle seems to fail to meet the standards of empiricism; but, for the market libertarian ideologues and other armchair capitalists, the principle is just too beautiful to abandon.

  • Jaymin

    @graduate_student
    It’s not principle – it’s common sense, which for the grad school hippies and other armchair ivory tower theorists, is too mundane to acknowledge.

    First we must address a distinction between the wage stagnation in the past decade and the City government’s situation. Yes, I admit that the wealth of middle america has stagnated while the the rich have become richer. So, sure, the rich have recently been screwing us more than they traditionally have, and perhaps that’s grounds for redistributive policies.

    But the city’s downward push in wages is not as much caused by leaches, but by decreased revenue. If you, for instance, were in charge of the NHPD, and the mayor tells you to trim 25% off your budget, while the union (or the living wage) demands a 10% increase in wages. What do you do? You have no choice. You fire people. It’s common sense.

    More importantly, if you look at who actually gets fired in the government, it’s usually the less-connected, lower-waged employees. If you institute a higher living wage, those low level employees become more expensive to keep, while the high level employees are unaffected (since they already earn above the living wage). Common sense again suggests that, therefore, the lower level employees are likely to get scrapped in this situation.

  • graduate_student

    >First we must address a distinction between the wage stagnation in the past decade and the City government’s situation.

    You don’t do that in your first comment. You talk about the public employee situation, and then shift to the private economy and a historical discussion regarding the Great Depression, which to my knowledge was not caused by public sector unions or “living wage” advocates.

    >Common sense again suggests that, therefore, the lower level employees are likely to get scrapped in this situation.

    For some reason you are freely able to imagine this horrific doomsday scenario in which, by electoral boondoggle and public stupidity, the city government fires its essential workers while keeping its overpaid administrators; and yet, at the same time, you are unable to imagine the more “common sense” possibility that the city government might reduce the wages for top officials while increasing the wages for meter-maids and “Downtown Ambassadors.” Neither situation is impossible.

    And for the record, I hate hippies.

  • Leo

    I am proud to be both a “market libertarian ideologue” and an “armchair capitalist” who believes in “old market principles.” All else equal, in a market economy a rise in the minimum wage will always result in an increase in unemployment. If an empirical analysis shows otherwise, there is a confounding variable or a mistake in the analysis. The economic logic is ironclad.

    The minimum wage is just one of many misguided attempts by government to help the poor which does the opposite of what it sets out to accomplish. That is, unless the law is actually an attempt by unions to eliminate competition for low-wage labor.

    Workers don’t need benevolent overlords to protect them from “greedy” businessmen. In a capitalist economy, it is the the “greed” of the employer that ensures wages will eventually be bid up to the level of the marginal productivity of labor. There is no better anti-poverty mechanism than the free market and the profit motive.

  • Leo

    Just to clarify, the “old market principle” is that an ARTIFICIAL increase in wages above the market level means decreased employment.

  • dm

    @Leo- While I agree with your analysis of microeconomic theory, the world is far more complicated than you make it. The confounding variable in the analysis is the real world.

    The United States could eliminate the minimum wage, eliminate workers’ protections, and see a return to manufacturing at sweatshop rates. The eras of greatest industrialization in the United States (and greatest growth) took place during eras of protectionism. In fact, most of America’s economic history is characterized by tariffs and protections. To this day we maintain a healthy farm subsidy program, to the detriment of family farms in this country and in others.

    If you want the free market in a globalized economy, you have to be willing to accept Chinese-level wages. Good luck selling that one.

  • graduate_student

    >The confounding variable in the analysis is the real world.

    Well said.

    >I am proud to be both a “market libertarian ideologue” and an “armchair capitalist” who believes in “old market principles.” All else equal, in a market economy a rise in the minimum wage will always result in an increase in unemployment. If an empirical analysis shows otherwise, there is a confounding variable or a mistake in the analysis. The economic logic is ironclad.

    Economics is a statistical, empirical science. “Logic” does not trump reality. I think that the term you were looking for was ‘ideology’, in the following sense: “If reality contradicts my ideology, then there is something wrong with reality.”

    Your brand of “economics” is political ideology poorly disguised by pseudo-scientific and pseudo-philosophical rhetoric. Like most right-wing libertarians (à la Murray Rothbard and the other Austrian economists), rather than looking to the world for evidence of the proof of your theory, you look to your theory for evidence of the proof of the world.

  • graduate_student

    More information:

    http://www.epi.org/publications/entry/briefingpapers_bp150/

    >The claim that higher minimum wages are the reason for labor market problems in the Northwest is an extreme version of a particular economic theory, namely that mandatory minimum wages cause employers to reduce the number of employees they hire. This assertion is based on an overly simple model that assumes that wages are set in the marketplace the same way as the price for tee-shirts or bananas.

    >[...] The first study of the New Jersey minimum wage increase was published in 1994 in the American Economic Review, a well-regarded economics journal, and was written by David Card and Alan Krueger, two economists from Princeton University (Card and Krueger 1994). They followed a relatively straightforward methodology, performing a phone survey of a sample of over 400 fast-food restaurants in New Jersey and Pennsylvania both before and after the increase went into effect, gathering information on the number of employees working at each restaurant. (Fast-food restaurants were chosen because they are in an industry with a pay scale that is significantly affected by changes in the minimum wage.) They then compared the changes in employment in New Jersey to the changes in employment in Pennsylvania. Card and Krueger found that the increase in the New Jersey minimum wage did not lead to any measurable impact on employment (Card and Krueger 1994, p. 792).

  • Jaymin

    @dm
    “If you want the free market in a globalized economy, you have to be willing to accept Chinese-level wages. Good luck selling that one.”

    That is a profoundly inaccurate statement. Only 2.2% of the population works at the minimum wage, suggesting that the market, on it’s own, has set the prevailing wage above the minimum. Getting rid of the minimum wage would not turn us into China.

  • Jaymin

    Sorry, misspoke. 3.5% work at minimum wage now (I was looking at 2006 data before and the minimum wage went up nearly $2 since then).

  • Jaymin

    @ grad student
    1) The study, who’s link you provided, is horribly flawed. As I mention in the above comment, only 2-4% of the population works at minimum wage. However, the authors of the study looked at employment at a broad, statewide level. So, of course, changes in minimum wage policy had “statistically insignificant” effects on employment, given that minimum wage is irrelevant to 96% of the workers the authors studied. One needs to look at how minimum wage policy affects those who are actually at minimum wage.

    2) You quote the Card an Krueger study above, but did you can care to read the very next line, or were you intentionally trying to mislead us?
    “It received almost immediate criticism from the Employment Policies Institute (EmPI), an organization funded in large part by low-wage employers, including restaurants. The primary criticism was the use of a phone survey for data collection, which sparked concern that responses given over the phone might not be wholly accurate. A better source, according to EmPI, would be payroll records collected directly from restaurants. EmPI collected payroll data from 71 fast-food restaurants (a far smaller sample than that used in the Card and Krueger study). Based on these data, EmPI concluded that the Card and Krueger study was “worse than flawed” (Berman 1995).”

    It turns out, if you actually look at payrolls from these restaurants instead of just calling them up on the phone for their opinions, you learn that the minimum wage did indeed negatively impact employment.

  • dm

    @Jaymin-

    A few questions on your data. I’m mostly just wondering, as opposed to trying to make a counter.

    The 3.5% of people who work at minimum wage. Does that include employees who can receive tips and are paid at or below minimum wage? Do your numbers include young people who can be employed for under the minimum wage in some states? I, for one, was subject to Virginia’s youth minimum wage for a summer. Do these numbers include illegals?

    The last question is significant, because it plays heavily into the question of where the market is actually setting the price. If you can show me statistics that essentially no illegal immigrants are being paid minimum wage or below, then fine. Illegal work could be a variable that makes understanding the minimum wage issue far more difficult, though.

  • graduate_student

    >The study, who’s link you provided, is horribly flawed.

    Says Dr. Anonymous Webman, Esq., degree summa cum laude in economics, Ph.D. in INTERNETS.

    >However, the authors of the study looked at employment at a broad, statewide level.

    Nope.

    >You quote the Card an Krueger study above, but did you can care to read the very next line, or were you intentionally trying to mislead us?

    Nope. I do find it ironic that you accuse me of quoting selectively while failing to account for the context of your own citation. The next paragraph:

    >It is not uncommon to hear the Card and Krueger results dismissed by opponents of the minimum wage as having been disproved by the Neumark and Wascher study. However, an objective review of all the material from both sets of authors leads to the conclusion that the New Jersey minimum wage increase had no measurable impact on employment in fast-food restaurants. As discussed on the following pages, a number of factors support the Card and Krueger findings and call into question the results of the Neumark and Wascher study: 1) the questionable data collection methods used by Neumark and Wascher; 2) a reexamination of the Card and Krueger study using unbiased government records; and 3) the carefully worded conclusions in the final version of the Neumark and Wascher paper.

    Will we continue quoting the article paragraph by paragraph, each time heaping absurd accusation upon absurd accusation, until we reach the end? I suppose it could be amusing.

    The fact is that even economists don’t agree about the effect that minimum wage has on overall employment, so it’s plain stupid to be speculating about it here.

  • grumpyalum

    Also, 3.5% working at the minimum wage doesn’t tell you about those that are working NEAR the minimum wage, which is functionally defined as probably minimum + extra value for more effective worker.

    McDonalds doesn’t pay a lot of people at minimum wage. But you can’t tell me that if the minimum dropped by four dollars, they wouldn’t drop it by at least 2 or 3.

  • Jaymin

    @dm I wish I could tell you, but I’m not too certain on the particulars, though I suspect illegal immigrants are not included. Here’s the link to the stats, if you’re curious: http://www.bls.gov/cps/minwage2010tbls.htm

    @grad student Yea, I suppose this isn’t going anywhere. Though, I’d like to note, I do not comment anonymously.

  • Leo

    @ dm “While I agree with your analysis of microeconomic theory, the world is far more complicated than you make it. The confounding variable in the analysis is the real world.”

    Economic theory does not involve empirical or statistical analysis, so there can be no “confounding variable.” However, if someone makes the empirical claim that a rise in the minimum wage did not increase unemployment, you could say this analysis has been confounded by the complexity of the “real world.”

    “The United States could eliminate the minimum wage, eliminate workers’ protections, and see a return to manufacturing at sweatshop rates.”

    With the elimination of government interference, wages would return to the MARKET rate. Given the skill and education of American workers, and the technology and capital readily available to American manufacturers, the productivity of American factory workers would be much higher than the productivity of workers in developing countries like China. Therefore, wages would also be much higher.

    “The eras of greatest industrialization in the United States (and greatest growth) took place during eras of protectionism. In fact, most of America’s economic history is characterized by tariffs and protections. To this day we maintain a healthy farm subsidy program, to the detriment of family farms in this country and in others.”

    Since you admit that the American economy has always been characterized by protectionism to some degree, what is your point? The period of greatest growth in America was the so-called “Gilded Age” after the Civil War, during which relatively laissez-faire policy encouraged competition, technological development, and capital accumulation. Consumer prices fell and real wages rose, all without the help of unions and minimum wage laws.

  • Leo

    @graduate_student:
    “Economics is a statistical, empirical science.

    If economics is an empirical science only, why is the cornerstone of every intro-micro course the THEORY of supply and demand? Economics in the Austrian tradition you so despise is the study of human action and the deduction of truths from fundamental axioms. Economics in the mainstream sense applies both theory and empiricism.

    “‘Logic’ does not trump reality.”

    Accurate logic is a reflection of reality. And empirical studies that rely on statistics often fail to reflect reality.

    “I think that the term you were looking for was ‘ideology’, in the following sense: ‘If reality contradicts my ideology, then there is something wrong with reality.'”

    Since my ideology is a set of ideas based on logic which I believe to be accurate, you would be correct.

    “Your brand of ‘economics’ is political ideology poorly disguised by pseudo-scientific and pseudo-philosophical rhetoric.”

    My “brand of economics” when it comes to the minimum wage is standard fare among mainstream introductory textbooks. It is true that libertarianism and economic theory reinforce each other, but the same is true of mainstream or Marxist views. If you think I have engaged in poor rhetoric, please point out my specific mistakes.

    “Like most right-wing libertarians (à la Murray Rothbard and the other Austrian economists)…”

    You have mischaracterized Rothbard and the libertarian tradition with the “right wing” label. Libertarianism is more of a centrist position that supports both economic and civil liberty.

    “…rather than looking to the world for evidence of the proof of your theory, you look to your theory for evidence of the proof of the world.”

    I’m not sure this makes sense. What is “evidence of the proof of the world?” If you mean that Austrians look to the real world to validate theory they already know to be true, you are correct. An empirical study cannot disprove correct theory.

  • dm

    My point re: protectionism is that when we made our greatest developments as a nation, we were not competing on a global scale. As was the case with Britain’s industrialization. Adam Smith comes out of a context of mercantilism. We are in a far different age from that gilded one. Goods and services can be made and provided anywhere. The market has already decided that certain goods will be produced in places other than the United States. That might be a case against the minimum wage, but you do have to recognize that the world we live in now is so different in terms of its geo-economic setup, that the calculations of the past ring hollow.

  • Jaymin

    Did we develop as a nation because of protectionism or despite it? It’s a cliched saying, but correlation does not entail causation.

  • Leo

    We developed despite protectionism. Like the minimum wage (and most economic policy for that matter), tariffs benefit certain politically-favored groups, like farmers, at the expense of the consuming public which must pay higher prices for protected goods. Unfortunately, most people (especially politicians) lack the ability to look beyond the benefits to the specific group.

    While I agree that we live in a different age, globalization has been around ever since Columbus sailed the ocean blue. Global competition existed throughout the 1800s, and the battle between free-traders and protectionists was especially heated in Britain and America. Check out the argument over the repeal of the British Corn Laws, which occurred in 1846: http://en.wikipedia.org/wiki/Corn_Laws.

    Now that the world is even more interconnected, the benefits to be reaped from free trade are all the greater. Global capitalism has lifted millions of people (particularly East Asians) out of poverty in just the past few decades.

  • whydoIhaveaname

    you simply can’t extract and compare two entirely different historical realities on the basis of some vague idea of “sameness”–sorry, but “globalization” as we know it certainly did not exist since Columbus. A minor point, but worth noting.
    And anyway, i’m not going to debate the virtues or vices of globalization here. I think the point is that we are going through a largely unavoidable economic shift and the best we can do is mitigate the suffering for those directly impacted by job loss, stagnating wages, and all the other horses of the economic apocalypse.

  • Leo

    *”sorry, but ‘globalization’ as we know it certainly did not exist since Columbus. A minor point, but worth noting.”*

    I probably should have avoided the word “globalization.” It would be more accurate to say that international trade has been around since Columbus. “Globalization” seems to be a meaningless buzzword that people use to evoke positive or negative emotions.

    *”I think the point is that we are going through a largely unavoidable economic shift and the best we can do is mitigate the suffering for those directly impacted by job loss, stagnating wages, and all the other horses of the economic apocalypse.”*

    Who is “we” and what are they supposed to do to mitigate the suffering – enact minimum wage legislation that causes more unemployment and artificially increases some wages at the expense of all other wages? Every person who can’t get a job in one sector due to the minimum wage must look elsewhere, increasing the supply of labor and decreasing wages in this new sector.