Feb 16, 2012 5:05 AM GMT
Progressive public policy doesn't seem to be working out for California and Illinois either...
How did this great city fall so far?
(Editor's note: This is an updated version of an article that originally appeared on July 6, 2009.)
Imagine a city where all the major economic planks of the statist or "progressive" platform have been enacted:
- A "living wage" ordinance, far above the federal minimum wage, for all public employees and private contractors.
- A school system that spends significantly more per pupil than the national average.
- A powerful school employee union that militantly defends the exceptional pay, benefits and job security it has won for its members.
Other government employee unions that do the same for their members.
- A tax system that aggressively redistributes income from businesses and the wealthy to the poor and to government bureaucracies.
Would this be a shining city on a hill, exciting the admiration of all? We don't have to guess, because there is such a city right here in our state: Detroit
Detroit has been dubbed "the most liberal city in America" and each of these "progressive" policies is alive and well there. How have they worked out?
In 1950, Detroit was the wealthiest city in America on a per capita income basis. Today, the Census Bureau reports that it is the nation's 2nd poorest major city, just "edging out" Cleveland.
Could it be pure coincidence that the decline occurred over the same period in which union power, the city government bureaucracy, taxes and business regulations all multiplied? While correlation is not causation, it is striking that the decline in per capita income is exactly what classical economists predict would occur when wage controls are imposed and taxes are increased.