Saturday, May 21, 2016

Another Pair of Unintended Consequences

Raising the minimum wage is a strategy for moving working poor people out of a city or other jurisdiction. It makes jobs they would take to get a foot on the upward ladder uneconomic in that locale. Over time, people move to where perceived opportunity exists.

Restrictive real estate practices, including zoning and assessments, make both home ownership and rents higher, less affordable in a region. Again, this causes the working poor to move elsewhere.

It is likely most people who support higher minimum wages and restrictive real estate practices are unaware of the impact they have on moving the poor to other areas. Alternatively, perhaps they understand but don't care.

What if the two effects noted above are viewed as features, instead of defects? Imagine if the real motives are to gentrify the city or area, effectively limiting residency to people of high SES. Think of the scandal.

Go here to read a City Journal interview with Aaron Renn, who has written about the reverse migration of black Americans back to the South their grandparents left 70 years ago. The thoughts above are my reaction to points raised in this interview.