More On the Minimum Wage

To a lot of people, increasing the minimum wage makes sense. Honestly, who doesn’t want low-income workers to make more money? Yet, if you actually take a look at minimum wage laws, you’ll notice that they don’t really help people as much as advertised. In fact, these laws actually can hurt the people they are meant to help. A new study (H/T The Corner) by Jeffrey Clemens and Michael Wither further reinforces these points.

In their study, Clemens and Wither examined the impact of the federal minimum wage increases during the Great Recession (2007-2009). They found that not only would low-skilled workers be less likely to have jobs after the minimum wage hikes went into effect (a finding also supported by the CBO), but the hikes also would lead to an overall decline in these workers’ incomes even after accounting for the increased wages of those workers still employed.

This leads to another problem with increasing the minimum wage: decreased economic mobility. The study’s authors found that increasing the minimum wage reduced the chances of low-skilled workers eventually reaching salaries of $1,500 a month (they determined that $1,500 a month was the threshold for lower-middle-class salaries). Clemens and Wither believe that this reduction in mobility occurs because an increased minimum wage results in fewer jobs being available for poorer workers. According to the authors, this lack of job opportunities means that there are fewer chances for these people to accumulate the skills and experience necessary in order to earn higher wages in the future. This is conjecture on the authors’ part, but it makes sense if one thinks about it.

At a cursory glance, the minimum wage is a good thing. Unfortunately, there are two sides to the minimum wage, and when you take the other side into account you see that it hurts more than it helps. This study’s review of the academic literature finds that increasing the Earned Income Tax Credit (EITC) would be a better alternative for low-income families than raising the minimum wage, something that we have been saying for a while now.

 

Students Need Choice, Not-Pie-in-the-Sky Solutions

got school choice

When the chairman of the Black Leadership Roundtable announced his plan for ensuring Saint Louis-area students have access to a quality education—a city-county school district—he was presenting an idea that has been recycled for decades. In his 1985 book, A Semblance of Justice, Saint Louis University sociology professor Daniel Monti wrote, “A review of St. Louis County Board of Education’s deliberations between the 1950s and 1970s reveals three overriding concerns among professional educators and the lay leadership: the merger of all county districts with the city district, the equalization of school tax rates in the area, and the consolidation of districts within St. Louis County.” The idea may have some merit. Unfortunately, it is simply too pie in the sky to ever make a difference for students who need better educational options today.

It is highly unlikely that citizens in high-achieving, wealthy school districts such as Clayton would agree to a merger with the low-performing, poor school district of Riverview Gardens. Yet, even if all the area districts merged, it would not dissolve the pockets of concentrated poverty. Though it’s true that school district boundaries would be erased, the boundary lines around individual school buildings simply would become starker; essentially transferring the problem of housing decisions based on district performance to housing decisions based on school performance.

No, simply consolidating school districts will not solve St. Louis’ educational problems. The editorial board of the St. Louis Post-Dispatch realizes as much. When they called for a city-county school district in April 2014, they wrote that their ideal school district would utilize “some form of open enrollment.” The editorial board implicitly recognized that school choice must be a part of any plan to improve educational outcomes for disadvantaged students in the Saint Louis area.

Though the city-county school district will likely never happen, there are ways in which we can expand options for students. For starters, it should be easier for students in low-performing schools to take the dollars allotted for their education to the school of their choice. Missouri has had a successful, voluntary inter-district choice program between the St. Louis Public Schools and county school districts since 1981. With some modifications, the law that allowed Normandy and Riverview Gardens students to transfer to higher-performing schools could be just as sustainable. Moreover, the law could be expanded to allow all students the opportunity to seek the best education possible.

Along those lines, Missouri should allow students to enroll in charter schools across district boundaries. There are many well-regarded charter schools in Saint Louis that would welcome students from Normandy, Riverview Gardens, or other school districts. Moreover, there are many charter schools that would like to open in struggling school districts. They are inhibited from doing so, however, because they can only enroll students from within district boundaries.

Finally, Missouri should create a tax-credit scholarship program to enable students to attend a private school of their choice. Fourteen states now have a tax-credit scholarship program. These programs expand opportunities for students whose needs are not being met, especially students who are disadvantaged or have special needs. What is more, tax-credit scholarships save states money.

We do not need to hold out hope for large-scale changes to area school district boundaries when these solutions are at our fingertips. If Saint Louis truly wants to dissolve the poverty cycle in urban communities, then it should support realistic solutions like charter school expansion, voluntary open enrollment, and a tax-credit scholarship program.

Students Need Choice, Not-Pie-in-the-Sky Solutions

When the chairman of the Black Leadership Roundtable announced his plan for ensuring Saint Louis-area students have access to a quality education—a city-county school district—he was presenting an idea that has been recycled for decades. In his 1985 book, A Semblance of Justice, Saint Louis University sociology professor Daniel Monti wrote, “A review of St. Louis County Board of Education’s deliberations between the 1950s and 1970s reveals three overriding concerns among professional educators and the lay leadership: the merger of all county districts with the city district, the equalization of school tax rates in the area, and the consolidation of districts within St. Louis County.” The idea may have some merit. Unfortunately, it is simply too pie in the sky to ever make a difference for students who need better educational options today.

It is highly unlikely that citizens in high-achieving, wealthy school districts such as Clayton would agree to a merger with the low-performing, poor school district of Riverview Gardens. Yet, even if all the area districts merged, it would not dissolve the pockets of concentrated poverty. Though it’s true that school district boundaries would be erased, the boundary lines around individual school buildings simply would become starker; essentially transferring the problem of housing decisions based on district performance to housing decisions based on school performance.

No, simply consolidating school districts will not solve St. Louis’ educational problems. The editorial board of the St. Louis Post-Dispatch realizes as much. When they called for a city-county school district in April 2014, they wrote that their ideal school district would utilize “some form of open enrollment.” The editorial board implicitly recognized that school choice must be a part of any plan to improve educational outcomes for disadvantaged students in the Saint Louis area.

Though the city-county school district will likely never happen, there are ways in which we can expand options for students. For starters, it should be easier for students in low-performing schools to take the dollars allotted for their education to the school of their choice. Missouri has had a successful, voluntary inter-district choice program between the St. Louis Public Schools and county school districts since 1981. With some modifications, the law that allowed Normandy and Riverview Gardens students to transfer to higher-performing schools could be just as sustainable. Moreover, the law could be expanded to allow all students the opportunity to seek the best education possible.

Along those lines, Missouri should allow students to enroll in charter schools across district boundaries. There are many well-regarded charter schools in Saint Louis that would welcome students from Normandy, Riverview Gardens, or other school districts. Moreover, there are many charter schools that would like to open in struggling school districts. They are inhibited from doing so, however, because they can only enroll students from within district boundaries.

Finally, Missouri should create a tax-credit scholarship program to enable students to attend a private school of their choice. Fourteen states now have a tax-credit scholarship program. These programs expand opportunities for students whose needs are not being met, especially students who are disadvantaged or have special needs. What is more, tax-credit scholarships save states money.

We do not need to hold out hope for large-scale changes to area school district boundaries when these solutions are at our fingertips. If Saint Louis truly wants to dissolve the poverty cycle in urban communities, then it should support realistic solutions like charter school expansion, voluntary open enrollment, and a tax-credit scholarship program.

James V. Shuls, Ph.D., is an assistant professor of educational leadership and policy studies at the University of Missouri–St. Louis and a fellow at the Show-Me Institute.

Map Series: II. The Loop Trolley and Existing Transit

Loop Trolley_Existing_Transit

The map above shows the Loop Trolley in relation to existing demographic characteristics. As the map shows, the Loop Trolley’s path is intersected by seven MetroBus routes and passes within a few meters of two MetroLink stations. The trolley, if it is built, will be redundant for nearly all conceivable transit trips. The map also shows the percentage of renters per census bloc around the proposed route. While multi-unit housing and a high renter population generally means more transit usage, it also means that most of the benefits from any gentrification will accrue to landlords, not residents. Renters as a percentage of total occupants are relatively high around the trolley route. Read more from the Show-Me Institute on the Loop Trolley here.

ESEA: What Should Reauthorization Look Like?

Although the Show-Me Institute typically focuses on state-level education policy issues, discussions regarding the controversial Elementary and Secondary Education Act (ESEA) have been popping up lately.

LBJ_ESEA-signing

The ESEA was created in 1965 as a part of Lyndon B. Johnson’s “War on Poverty.” The statute funds state primary and secondary education. Currently, Missouri school districts receive about 10 percent of revenue from the federal government.

The ESEA has been reauthorized every five years, and each presidential administration has left its mark on the original act. Most recently, it was reauthorized during the Bush Administration as No Child Left Behind (NCLB). Because Congress has not reauthorized the act during Obama’s presidency, there is concern the administration might be using the act as leverage to incite favored reforms.

The Department of Education has instituted “waivers” from NCLB. The adoption of the Common Core State Standards and tying teacher evaluations to student data are policies states must adopt to receive a waiver. Waivers have faced criticism, as, under similar conditions, some states have received them while others have not. Last month, Oklahoma was given its waiver back.

The question is: Assuming states continue to receive federal monies (and the act will be reauthorized), what should the ESEA’s reauthorization look like?

In an op-ed in the Washington Times, Heritage Foundation Fellow Lindsey Burke made the following recommendations:

  • Eliminate any federal mandates concerning NCLB;
  • Reduce the number of programs associated with NCLB; and
  • Allow states more portability with Title 1, the component of NCLB that allows students in failing schools the option of transferring to a higher-quality public school.

Burke’s recommendations don’t end federal intrusion into state education altogether, but this does seem to be a compromise between keeping the ESEA and giving power back to the states.

Should the federal government stay out of education completely, including federal funding? What do you think of Burke’s recommendations?

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Map Series: I. North Saint Louis Municipalities Fines per Resident

North_County_Munis

This map shows the amount of revenue from fines and fees the many small municipalities of North Saint Louis County collect per resident. While many collect amounts similar to Saint Louis City and larger municipalities in the county, some collect much more. As the map shows, Edmundson, Calverton Park, Normandy, Pine Lawn, Vinita Terrace, and Beverly Hills collect more than $300 in fines per resident annually. See more of our writings on municipality fines and fees here.

Why Saint Clair Wants Congress to Close Its Airport

In a previous post we detailed how one Missouri city, Saint Clair (located in Franklin County), has been trying (and failing) to close its small, money-losing local airport since 2006. The city government believes that the resources and land devoted to the airport would be better spent on commercial property development, not keeping a small general aviation airport with a handful of tenants up and running.

While there is some local support for keeping the airport open among politicians and a particularly vocal tenant, the principal protector of St. Clair Regional Airport is the Federal Aviation Administration (FAA). Because the airport has received federal grants to improve the airport in the past, the ability of the local government to operate (or close) its airport is tightly constrained by FAA grant assurances. As we wrote before:

Two of the more cumbersome assurances for a city like Saint Clair are Nos. 5 and 25. Assurance No. 5 obligates Saint Clair to maintain it as a public airport and not dispose or sell any part of the airport without FAA approval. The FAA will only give approval if Saint Clair can show that closing the airport improves aviation in the area. In addition, the dispensation to sell the airport does not free Saint Clair from reimbursing the federal government all recent federal grants. This will cost the city more than $750,000.

The city’s back-and-forth negotiations with the FAA have failed to produce results.

In an attempt to accelerate the process, Senator Claire McCaskill introduced a bill (S.2759) that would specifically close St. Clair Regional Airport. That bill passed the Senate on December 3, and if it passes the House and receives the president’s signature, the FAA would have to allow the airport’s closure.

You read that last paragraph right. Getting a bill through the U.S. Congress is considered a shortcut to closing a general aviation airport owned by a Missouri city with less than 5,000 residents. That is the kind of intransigence and red trap cities encounter when they, by taking what looks like free money, accept the oversight of federal bureaucracies over local infrastructure. If other local governments want to avoid Saint Clair’s headaches, they should support the development of private airports and local user-funding sources whenever possible.

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