The Corner

Tax, Regulate, Subsidize, Repeat

The New York Times editorial board is bemoaning the grim state of the labor market. The board is specifically concerned about low-income and middle-class workers — ironically so, because, in previous years, it has endorsed a variety of legislation aimed at artificially boosting pay and compensation for these workers. Unsurprisingly, the demand for low-skilled labor declines when employers can hire skilled labor for just a few dollars more.

The best part is this sentence: “If successful, ambitious goals like health care reform and energy legislation may generate jobs, but officials have not persuasively linked them to job growth.” The reason officials have not persuasively linked these goals to job growth is because they can’t. Higher costs, paid for by tax increases and mandates, do not create jobs. Any jobs created by these bills will be more than offset by lost hours and jobs in other areas, as companies try to reduce their costs.

Policies have consequences. When you impose new costs, regulations, and burdens on businesses, the result is that there are fewer jobs in the economy and fewer business start-ups.

No worries, however, because the New York Times has a solution to higher employment costs: Tax credits for hiring, and another stimulus bill! If the government imposes higher labor costs, then surely the government can fix the problem by throwing money at businesses. Never mind that these programs haven’t worked when they’ve been previously tried; to the New York Times editorial board, the solution to problems caused by government interference is always more government interference.

– Rea Hederman Jr. is assistant director of the Center for Data Analysis and senior policy analyst at the Heritage Foundation. 

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