Saturday, August 02, 2008


In a previous post I mentioned the inconsistency in policy recommendations with regard to food and agriculture as outlined in the policy guide for the documentary ‘Unnatural Causes: Is Inequality Making Us Sick?’

Next I will discuss problems with their policies regarding housing and wealth. They recommend policies that support zoning reform, affordable housing, green spaces, repealing recent tax cuts and loopholes for the rich ( which would actually target family farms and small businesses as well), and increasing minimum or living wages. They also have adopted the grand goal of reducing the influence of money and lobbyists over politics.

First of all, increasing taxes on income and profits will undermine the productive base of society and economic growth. The result will be increased inequality and the reduction of resources that could be used to promote public health.

Empirical evidence and economic science suggests that green spaces, zoning restrictions, and ‘smart growth’ type policies lead to increased housing costs ( a boon to wealthy property owners) and are inconsistent with affordable housing.

Minimum wage laws, especially living wages, discriminate against low productivity labor in favor of wealthier, higher skilled members of society. Most current minimum wage earners are already from families earning incomes greater than $60,000 per year, and less than 5% are ‘working poor.’ In addition, these laws further entrench large corporations like Wal-Mart at the expense of small businesses.

Finally, these sorts of government interventions only increase the stakes involved, and provide stronger incentives for big business to lobby congress and influence the political process.

Most of the proposals found in the Policy Guide turn out to be ineffective in accomplishing their goals, and will likely result in greater burdens for the poor.


David Neumark, Mark Schweitzer, and William Wascher, “Order from Chaos? The Effects of Early Labor Market Experiences on Adult Labor Market Outcomes,” Industrial and Labor Relations Review, Vol. 51, no. 2, January 1998, pp. 299-322.

David Neumark and William Wascher, “Do Minimum Wages Fight Poverty?,” Economic Inquiry, 2002,
v40(3,Jul), pp. 315-333.

Cox, James C., and Oaxaca, Ronald L. 1986. Minimum Wage Effects With Output Stabilization. Economic Inquiry, vol. 24 (July): 443-453.

Behrman, Jere R.; Sickles, Robin C.; and Taubman, Paul. 1983. The Impact of Minimum Wages on the Distributions of Earnings for Major Race-Sex Groups: A Dynamic Analysis. American Economic Review, vol. 73 (September): 766-778.

Neumark, David, and Wascher, William. 1992. Employment Effects of Minimum and Subminimum Wages: Panel Data on State Minimum Wage Laws. Industrial and Labor Relations Review, vol. 46 (October): 55-81.

Other : 50 years of research related to the minimum wage:

Harvard Institute of Economic Research
Discussion Paper Number 1948
The Impact of Zoning on
Housing Affordability
Edward L. Glaeser and Joseph Gyourko
March 2002
Harvard University
Cambridge, Massachusetts

Does Sprawl Reduce the Black/White Housing Consumption Gap?,

• The Dynamics of Metropolitan Housing Prices by University of North Carolina researchers Donald Jud and Daniel Winkler shows that housing prices grow faster in places "with restrictive growth management policies and limitations on land availability."

Robert Barrow. Macroeconomics- 5th Edition MIT Press 1997

Lindsey, Lawrence B. 1987. “Individual Taxpayer Response to Taxcuts, 1982-1984.” J. of Public Economics 33 (July) 173-206

Lucas (1988). ‘On the Mechanics of Economic Development.’ Journal of Monetary Economics 22 (July) 3-42.

Krueger (1993) ‘Virtuous and Vicious Circles in Economic Development.’ American Economic Review 83 (May) 351-355.

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