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The Cuomo Pink Slip and the Cuomo Tax

I cannot remember a time when New York’s Governor and New York City’s Mayor taken together pose a greater threat to liberty and prosperity.  Last week each proposed a dreadful policy. Governor Andrew Cuomo succeeded and Mayor Bill de Blasio failed. The different outcomes tell us a lot about what makes some statist proposals more likely to take effect and how to resist them.

Cuomo got his Labor Board to hike the minimum wage to $15 an hour for fast food workers throughout the state. I will not repeat my general arguments against substantial minimum wage hikes. But even minimum wage advocates concede that such sector specific wages will distort the labor market and create a less efficient mix of businesses. Moreover, any law that requires paying someone at McDonald’s in Troy, New York $15 an hour while someone working at Home Depot in New York City $9 an hour is patently irrational given the much higher cost of living in the city.

For his part, de Blasio proposed capping the growth of Uber in New York City ostensibly because the extra cars on the road were causing congestion, but in large measure because the taxi companies are some of his biggest supporters. Even if city streets were becoming more congested it is not economically rational to single out Uber. There is no reason to believe that the customers it serves are getting less benefit from driving around New York than those who take taxis or drive themselves.

What is interesting, however, is that the city council shelved this proposal. There are several reasons that de Blasio’s scheme was more vulnerable. First, the cap on Uber meant that some people who wanted drive for Uber recognized that the proposal would prevent them from doing so, creating a lobby against it. With the minimum wage, in contrast, while some workers will lose their jobs because of it, they cannot now identify themselves. Second, de Blasio had to get the support of elected representatives, whereas Cuomo worked through an unaccountable labor commission.

But perhaps the most important difference of all was the way Uber fought back.  It put on its app a “de Blasio” button for summoning a driver. If one used it, one would not be picked up for 25 five minutes. It was thus able to turn its customer base into a grassroots opposition.

The lessons for the friends of liberty are twofold. First, it is much easier to impose onerous regulations through the administrative state than though a legislature, even one as generally supine as the New York City Council. Second, businesses need to energize their customers to oppose intrusions on their freedom. As minimum wages impose more costs, fast food restaurants should make clear that the surcharges are caused by particular politicians. Each receipt should now feature a “Cuomo Tax.” When these businesses lay off workers who cannot be afforded, the pink slip should prominently mention Cuomo’s name. Perhaps the minimum wage will not be rolled back in New York, but such publicity should deter politicians elsewhere from messing with liberty.

Reader Discussion

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on July 31, 2015 at 15:50:22 pm

As minimum wages impose more costs, fast food restaurants should make clear that the surcharges are caused by particular politicians. Each bill should now feature a “Cuomo tax.” When they lay off workers who cannot be afforded, the pink slip should prominently mention Cuomo’s name.

Fair enough. By the same token, Cuomo should propose that the following sentences be added to the state tax forms:

Do you favor repealing the minimum wage hikes, and increasing your taxes by $X to pay for the resulting increase in demand for social services? If yes, include sum here. --> _______
(If minimum wage hike not repealed, you may credit this sum against a future state tax liability.)

‘Cuz let’s face it, Friends of Liberty, a minimum wage may intrude upon people’s autonomy – but repealing a minimum wage may merely trigger a different intrusion upon autonomy. You may favor one poison over another, but let’s not pretend we’re picking between poison and pear juice.

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nobody.really
on August 01, 2015 at 03:52:28 am

Nobody says......................Taxes wouldn't go up for the demand for "social services" if those "social services" were turned over to private charity. The "right" to force people at the point of a gun to take the fruits of their labor and "redistribute" those fruits to someone who didn't earn them,less the cost of the government middleman,is what is destroying our nation and its economy. You can't have freedom and free handouts. Its either or and that is the choice. Not poison or pear juice but liberty and or subservience.

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libertarian jerry
on August 01, 2015 at 13:11:35 pm

What and who, pray tell, give rise to *increasing demand* for something labeled "social services?"

Think how much is buried in, or obfuscated by, those terminologies.

Are "social services" the functions and conditions that some lack a capacities to perform or attain for themselves? Are they the obligations of others to mitigate deficiencies and create conditions? If so, how do those obligations arise; how are they allocated; by whom upon whom?

Then there is "demand;" even if we substitute "need." Is it economic, social (relative parities), or political (manipulative)? As "demand" what is the "supply" sought; and what are the sources of that supply?

Words thus used do not inform; they are only to influence.

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R Richard Schweitzer
on August 02, 2015 at 13:28:00 pm

I know people who say that abortion violates their sincerely held beliefs. I rarely try to talk them out of their religion. But sincerity does not justify a refusal to acknowledge that repealing abortion protections would trigger consequences that might also offend their beliefs.

I know people who say that minimum wage laws violate their sincerely held beliefs. I rarely try to talk them out of their religion. But sincerity does not justify a refusal to acknowledge that repealing minimum wage laws would trigger consequences that might also offend their beliefs.

Hayek famously supported a social safety net, and famously objected to obscurantism – that is, the refusal to acknowledge a fact because you don’t like the conclusions that flow from that fact. In both respects, I’m with Hayek.

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nobody.really
on August 02, 2015 at 13:51:48 pm

Nobody......................Hayek had his opinions,of which not all libertarians agree with. Hayek,you,and others,may agree on a minimum wage law. I don't. With that said,stay out of my wallet. You pay your employees what you want and I'll pay my employees what they and I agree on. You and a mob called the state have no moral right to dictate to me what I and my employees agree to in a hands off business situation. Anything else is fascist socialism.

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libertarian jerry
on August 03, 2015 at 09:23:29 am

[…] The Cuomo Pink Slip and the Cuomo Tax […]

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The Wackiness of Evil - Freedom's Floodgates

Law & Liberty welcomes civil and lively discussion of its articles. Abusive comments will not be tolerated. We reserve the right to delete comments - or ban users - without notification or explanation.