(Albuquerque) New Mexico subsidizes hospitals, specifically UNMH, through both a tax exemption and outright tax dollar expenditures of nearly $100 million annually.

While such subsidies might be reasonable were they narrowly-targeted at indigent care and the needy, but a planned $146 million expansion currently under consideration for UNMH would not be targeted at indigent care, rather it is designed to attract middle and upper-income patients to a taxpayer subsidized facility. Worse, due to a lack of transparency at UNMH, no one knows where this money will come from.

As Scott Moody and Wendy Warcholik, Ph.D, the authors of the new Rio Grande Foundation report, “Lack of Transparency for New Mexico’s Not-For-Profit Hospitals Cost Taxpayers Dearly,” economic theory predicts this type of behavior by not-for-profit hospitals since the tax exemptions and subsidies encourage “vertical integration…” As a consequence, for-profit health care providers are “crowded-out” of the marketplace by not-for-profit health care providers.

Moody and Warcholik argue that policymakers need to be vigilant about the potential for not-for-profit hospitals to creep into for-profit medical services through the aggressive use of their tax-exempt status and note that over time, this tax advantage will result in an over-population of not-for-profits which is bad for the economy and state and local coffers.

In the short-term, policymakers should put a stop to this and other questionable expansions of New Mexico’s fast-growing, taxpayer-subsidized hospital network. In the longer run, New Mexico policymakers should consider ways to prevent such hospitals from growing beyond their original intent.

One possible solution put forth by Moody and Warcholik is a piece of legislation considered by the New Hampshire legislature during 2012. The bill, (HB 1482), would have limited tax exempt activities to a hospital’s main campus. This would at least give local governments the final say on expansions of such tax-exempt facilities in their communities.

In the longer-term, Moody and Warcholik argue that New Mexico policymakers might want to consider tying indigent health care expenditures to the individual patient as opposed to funding institutions themselves.

I blogged earlier this year on some polling which showed strong support for school choice among New Mexicans.

Some new polling which focuses on the views of Latinos in five “swing states” including New Mexico, show that Latinos are even more supportive of school choice than is the general population!

Among the findings:

69% of Latinos support vouchers compared with 57% of the general population;
78% of Latinos support “school choice options” compared with 74% of the general population;
71% of Latinos support tax credit scholarships compared with 65% of the general population.

Perhaps it is their strong desire for educational options and an improved education for their children that causes Gov. Martinez to garner strong support from Democrats and Republicans alike? This, of course, defies the “ownership attitude” of Bernalillo County’s Democratic Party Chair Ana Canales who said recently of Gov. Martinez’s speech at the RNC, “I’m appalled that a woman, a Hispanic woman would even be at a Republican function, she’s Hispanic, she’s a woman and she has turned on us.”

Not much surprises me when I read the paper. But the signatories of this opinion piece really threw me for a loop. Sure, we know that Sec. Skandera supports teacher evaluation, but the head of the National Education Association teachers union here in New Mexico? That was a shock, especially these union-driven protests over the policy that were held this summer. The fact that they would pen an op-ed together was even more surprising.

There is no doubt that the current evaluation system (in name only) is in dire need of repair. We need to encourage and incentivize greatness, not “meets competency.” And, we need to identify the not-so-great teachers and either re-train them or get rid of them. That a teachers union would support such efforts is nothing short of amazing given the way unions typically look at teachers as little more than widgets, all of whom are, as in Lake Wobegone, “above average.” Thus, union-backed standards tend to revise standards towards the lowest common denominator while attempting to increase membership and payroll as much as possible.

Has a new leaf been turned over in New Mexico? We’ll see, but if this is not a misprint, we might just have our first reform-minded teachers’ union right here in New Mexico. Contrast that with Chicago where the unions are on strike demanding 30% pay raises…

I’m not sure how the dozens of people involved in circulating and thousands of people who signed the petition demanding an increase in the minimum wage in Albuquerque missed it, but the effort is on the verge of being sunk by some faulty language in the petition itself. This article comes from Yahoo! news.

Now, if there was merely a letter out of place or a minor punctuation issue, I could see the courts going along with the ballot measure for the fall election, but the issue here is far more profound and alters the actual meaning of the measure to the point where it is unworkable. We already know that raising the minimum wage is bad policy, but the decision to include or not include it on the ballot must be made quickly, by Tuesday the 11th of September. This snafu, unless the courts bend over backwards for this liberal cause, could at least force the groups to collect accurate petitions and submit them for a future election. I have no doubt that they’ll be back.

The Fraser Institute is a Canadian free market think tank. They recently published a study measuring labor market performance in US States and Canadian provinces. States and provinces were ranked on a variety of performance measures that are contained in the report, but that I’ll share with you relating to New Mexico below:

Index of Labour Market Performance, 2007–2011: 34th, top state North Dakota, bottom state Michigan;
Average total employment growth, 2007–2011: 34th, top state Texas, bottom state Michigan;
Average private-sector employment growth, 2007–2011: 48th, top state North Dakota, bottom state Rhode Island;
Average GDP per worker, 2006–2010: 37th, top state Delaware, bottom state Vermont;

Full report is an interesting read. Perhaps most telling, aside from New Mexico’s performance, is the performance of Canadian provinces like Alberta and Saskatchewan. Perhaps this has something to do with Canada’s embrace of economic freedom relative to the US? I’m just sayin’.

Bill Clinton may be the only politician that talks like just another “silver-tongued” politician, but governed like a free market, fiscal conservative. If you haven’t seen his speech from the DNC, check it out here. I have to admit that seeing Bill up there made me yearn for the days of 4.2% unemployment and a federal government that consumed “only” 18.2% of the overall economy. For reference, the federal government now consumes more than 24% of the US economy (perhaps that is why we all feel so poor these days?)

Anyway, there Clinton was, slumming for Obama and his big-government policies last night when, in reality, his ACTUAL GOVERNANCE saw a smaller government (relative to the overall economy) than the “radical” Paul Ryan has proposed (getting spending down to 20% of GDP).

Oh, and as if the contrast between Clinton’s very good record and his big-government rhetoric (which EJ Dionne gets wrong, of course) were not enough, there is successful welfare reform which Clinton signed and Obama has undermined, and NAFTA which Clinton pushed through Congress and signed, while Obama has been a major obstacle to expanded free trade.

Clinton may genuinely believe what he says both in terms of his policy pronouncements and his support for Obama, but faced with conservative opposition to his health care proposal, Clinton chose to govern from the middle or even the right. Obama, when faced with opposition to his policies has dug in and moved further left while the economy has continued to falter. Whether Obama wins re-election or not, that is the message that both parties need to take from Bill Clinton.

I missed this story when it originally ran, but actor Johnny Depp decided to move back to the USA to avoid the socialist government’s planned 75% income tax rate.

The US is no “tax haven” by any stretch of the imagination, but the more important point is that wealthy Hollywood types and business tycoons have the capacity to choose where they want to live. The rest of us don’t. The same goes for US States. Businesses and the wealthy will move to where they can keep more of their money and generate the best returns on their investments. Note the case of Maryland and Virginia, two states that have seen tax and regulatory policies diverge in recent years.

I recently saw this story from KOB TV Channel 4:

It discussed these reports (state level and local level) from the Associated General Contractors of America. According to the report, New Mexico is lagging regionally in terms of construction jobs. Is it? The answer is complicated. For starters, the state level report, linked to again here, covers only one year worth of data. It is tough to confirm a long-term trend over just one year. Also, while New Mexico does not perform particularly well relative to the regional economy, it is 26th on the list in terms of construction jobs gained/lost. That’s not great, but not terrible either. More importantly, it is only a short time period and a specific sector of the economy (construction).

If you want a better employment-related description of state economies in one simple table, try this one and look for the states that have grown private sector employment more than state and local government employment since the onset of the recession (January 2008 for the purposes of this report). Only three states, North Dakota, Texas, and Louisiana fit the bill. New Mexico, unfortunately, has cut 1.32 percent from the state and local work force, but has lost 5 percent of its private sector jobs. Rather than lagging behind, New Mexico is just one of many states hemorrhaging private sector jobs.

I appeared on KNAT TV to discuss the potential benefits of Right to Work for New Mexico. You can see the 15 minute interview below:

Paul Gessing, president of the Rio Grande Foundation discusses “Right to Work” on the show “Joy in Our Town” from Paul Gessing on Vimeo.

If you are interested in finding out more on the topic from a national expert, be sure to attend our luncheon with Mark Mix, the head of the National Right to Work Foundation on Wednesday, September 12. Ticket prices rise from $25 to $35 after Wednesday.

Rio Grande Foundation and its investigative arm, the New Mexico Watchdog, were recently the subject of a syndicated opinion piece that decried our efforts to re-create New Mexico’s Sunshine Portal by posting our own website with the names and salaries of all state government workers.

I responded with a letter to the editor of several papers that ran the column. It can be found below:

I appreciate columnist Merilee Dannemann’s concern over efforts by both Gov. Martinez’s office and the Rio Grande Foundation to post government employee pay on the Internet and to keep it there despite opposition from government employee unions.

The reason we have been so determined to keep this information available is that unlike traditional businesses where shareholders are the owners, in government, the ultimate “owners” are the people at large. In no other business do the owners have no idea what their workers are making. Ideally, in addition to simple pay, taxpayers would also be able to find out details on the pensions and benefits available to government workers.

If, as a government worker, you don’t like this, you don’t have to work in public service.

It is worth noting that New Mexico is by no means the only state to post public employee salaries on the Internet. Dozens of states do this and, as Dannemann mentioned, the information is already publicly-available upon request. I have not heard of one reported incident of identity theft nationwide.

From a “good government” perspective, transparency in compensation can lead to better understanding of how compensation is determined, whether it is indeed fair, and whether government workers are paid more or less than their private-sector counterparts. This is valuable information and can lead to more efficient government.

This is the 21st Century. It is an information century. My salary, like that of other non-profit CEO’s is available online as well. Check Guidestar.org.

Arnold Schwarzenegger is out of office and back in the movies, so he doesn’t have to act like he cares about the environment any more. How else can you explain his recent, $250,000 purchase of the monstrous Mercedes Unimog (photos at the link).

This is the same guy who single-handedly raised Californnia’s Renewable Portfolio Standard to an astonishing 33% just three years ago.

It is just funny to me how all of these environmentalists and politicians want middle and low-income Americans (not to mention Chinese) to pay up and live a lower standard of living by eliminating carbon emissions from their lives, but very few of them are willing to give up the joys of private jets and massive cars.

College athletics are indirectly (and sometimes directly) subsidized by the taxpayers. The USA Today recently put together a very interesting report showing which public universities’ athletic departments are the most heavily-subsidized and which pay their own freight. Hint, big schools with very successful college football teams tend to have athletic programs that pay for themselves while it appears that college basketball powerhouses with mediocre or bad football programs are able to make up a little bit of football-driven losses, but not all. Most schools subsidize their athletic programs to the tune of millions of dollars annually which ultimately, must increase student fees and/or taxpayer outlays.

According to the report, UNM received a total subsidy of $16,605,866 from 2006-2011 which comes to a total subsidy rate of 41.2%.

NMSU performed slightly worse with its athletic program receiving a total subsidy of $18,811,475 at a rate of 69.7%. Both subsidy rates were in the middle of the pack nationwide with rates ranging from zero to 90 percent.

HT: Patrick Leonard

A few weeks ago, we outlined a situation involving a partisan political group using the Roundhouse (aka, the Capitol). It was our position that the group should at least pay a fee for using the facility. This would include any security needed for the event.

Unfortunately, as Rob Nikolewski over at Capitol Report New Mexico reports, the Legislative Council Service has decided to not even ask for the $700 needed for additional security. This is just silly and it will open the floodgates to any and all partisan group that wants to hold their events in the “People’s House.” Of course, it is also unfair to taxpayers who will be asked to pick up the bill and could be asked to pick up bills far bigger than just $700.

Imagine if ALEC, an organization that is not actually partisan, were to have a function at the Roundhouse. The added security burden would undoubtedly be heavy and costly to taxpayers. Yes, according to these rules, ALEC wouldn’t have to pay a dime.

Surprise, surprise, another player in the local film industry wants to public to stop scrutinizing the generous subsidies given to it. That’s the message from Dana Arnold, CEO at Albuquerque Studios. I find it rich that the head of a company that is propped up by about $50 million annually from the taxpayer would say “stop the politics.” This is a well-connected, politically-savvy industry that has extracted subsidies from dozens of states across the nation. That’s as bad as the “Get the Government out of my Medicare” message that surfaced at a few tea party gatherings.

Specifically, the author argues that taxpayer subsidies create jobs for New Mexicans. Of course, spending $50 million or more annually (or, better yet, returning that money to taxpayers) would generate jobs and, because individual businesses and entrepreneurs are better at allocating scarce resources than government, New Mexico would see greater prosperity by allowing average New Mexicans to have their money back.

Rather than continuing to subsidize this (or any other industry), New Mexico policymakers should wean them off subsidies and instead focus on adopting low, fair, and transparent tax policies along with rules and regulations that increase fairness and opportunities for businesses and entrepreneurs. In terms of specifics, I think New Mexico should reduce the percentage subsidy by one percentage point annually, starting at 25%, down to 24%, then to 23%, and so on. That will free up limited resources to a larger number of projects in the short-term and will ultimately lead to this industry-specific subsidy program being phased out.

If you haven’t already done so, check out the New Mexico Breeze. It is a news source available both online and in a print format. The Rio Grande Foundation has agreed to provide original content to the paper on at least a monthly basis. One such article that ran in a recent edition of the paper came from RGF Policy Analyst Marcos Portillo. He explained how policymakers in Albuquerque could have used the private sector to avoid the recent green fee increase at Albuquerque’s public golf courses. Read the full article below:

More Efficient Management, not Higher Prices, the Answer at City Golf Courses

Albuquerque’s city-owned golf courses recently raised their rates by $2.50 per round. The primary reason for the increased rates is that the golf program had been underperforming and was not self-sustaining. Last year there was a shortfall of nearly $500,000 and the program required a bailout from the city’s taxpayers to cover it.

The fee increase may temporarily fill the gap (although it could reduce play and thus harm revenue), but a rate increase isn’t going to solve the long-term problem of government-managed golf courses.

What if there’s another financial crunch in the future? We’ll be back to where we started with more rate hikes and golf bailouts. The city should take a hard look at the option of privatizing management, an option that has proven successful for many municipalities across the country.

In 2007, Tulsa Oklahoma’s golf program was in a much worse position. The city was projected to subsidize their golf courses by approximately $1 million in fiscal 2008. As a result, the city entered into a contract with Billy Casper Golf Inc. The company assumed management in January 2008 and for the first year of operation cut the city’s subsidy nearly in half to $610,000. The next year it was cut to $200,000 and Billy Casper Golf submitted a five-year plan that would cut the subsidy to zero. In less than two years, rounds played grew by 39% and net operating income increased by over $1 million.

To be clear, “privatizing” management will not make Albuquerque golf courses any less open to the public. In fact, under private management operating with a profit motive, these courses could provide service equal to or better than is offered now, without the costs to taxpayers or higher fees for golfers.

In Cincinnati, the city privatized their golf courses in 1998 after a mid-90’s scandal that resulted in operating losses that totaled $1.3 million over two years. After a private management company took over, they were able to expand outreach programs for children and disabled golfers, and certified four city courses under an Audubon Society program that promotes wildlife preservation strategies, all while operating at a profit since privatization.

Even after this rate increase, Albuquerque taxpayers remain on the hook for capital improvements to City courses. Ladera golf course has recently been going through a significant irrigation renovation of its 18-holes (which should be completed by July 30th). This project cost nearly $2 million and did not come from the revenues of its own operations but from the capital improvement fund that is primarily funded by property taxes.

Let a private management company worry about improvements and allocate the taxpayers’ money towards more important core services and infrastructure improvement. In Indianapolis where former Mayor Goldsmith awarded the first privatization contract for a city golf course to R.H. West Company in 1993, the company expanded the facility from a 9-hole course to an 18-hole course, and unlike Albuquerque, $1.6 million in capital improvement investments were made to the course without the need for taxpayer money. The city pays nothing to operate and maintain the golf courses and saves the cost of paying salaries and benefits to the employees, as well as all capital improvements to the facilities. The private operators returned about $1.25 million to the city on total golf course sales of approximately $9.2 million in 2009 alone.

By giving up the reins to private entrepreneurs and the discipline of the market, the performance of many of publicly-owned golf courses has dramatically changed. In many cases, the private managers ended up expanding operations, renovating facilities, and even returning a percentage of revenue back to the city.

In New Jersey, Governor Christie contracted Atlantic Golf Management to take over operations of Spring Meadow Golf Course in April 2011. It was committed to paying the state 15 percent of the revenue it received exceeding $1 million per year. It took just over six months to reach that benchmark. Let’s get our golf courses to make our city money, not cost it money.

Why should non-golfers subsidize a luxury for a small number of the population that are golfers when another provider can provide such services at no cost (if not, a profit) to the public? Golf is but one of many services that the government provides that can be turned over to the private sector for better management.

Marcos Portillo is a policy analyst with New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, non-partisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.

Albuquerque voters will be asked to vote — possibly in November — on whether to raise the minimum wage from the statewide $7.50 to $8.50 with future increases indexed to inflation. Interestingly the issue of minimum wages has caused a great deal of economic turmoil in the US protectorate Samoa. According to minimum wage expert Michael Saltsman:

In 2007, Congress passed legislation to increase the federal minimum wage by approximately 40 percent in three steps, from $5.15 to $7.25. American Samoa, a U.S. territory in the Pacific, also was required to increase its minimum wage to $7.25 per hour, raising the rate by 50 cents every year. The territory previously set separate minimum wages for different industries, ranging from $2.68 to $4.09 per hour.

Flash forward five years: The territory’s unemployment rate now stands at nearly 30 percent. The economy relies primarily on exports of canned tuna, and one of the island’s two canneries shut down in 2009, citing increases in the minimum wage as a significant factor in the plant’s closure. Other island employers have reported to the Government Accountability Office that they plan to leave American Samoa, again naming the minimum-wage increases as the culprit.

There’s a nice, short video on the issue from “60 Minutes” here.

As if to reinforce the point that minimum wage laws kill jobs, Australia’s recently-increased minimum wage has increased unemployment among that nation’s youth (despite Australia’s strong economy overall).

I explained a few reasons why readers of the Alibi might want to support the Wal Mart proposed for Coors and Montaño. The letter is a response to this column which ran in the paper.

It is a challenge to argue in support of Wal-Mart to a relatively left-wing Alibi readership, but there are some sound even arguments in support of the new store location at Coors and Montaño. For starters, I live less than 1 mile from the proposed site and can vouch for the fact that many other neighbors of the site support Wal-Mart and the jobs and increased options it would bring to our area.

If the store were a Whole Foods or Trader Joe’s, it is hard to imagine the same level of opposition. The land is zoned commercial, so regardless of Antoine Predock’s vision for the area, city planners always intended for some major development to be located at that spot. The area, by the way, has been a vacant lot and hardly “natural” for many years.

In terms of the site itself, it is worth nothing that Bosque School already backs up to the Bosque as would the proposed Wal Mart. To my knowledge, no one has complained about the school location. There is also a small park with a parking lot between the Bosque and the proposed Wal Mart.

Lastly, while Wal Mart is hated by most self-described “progressives,” Sebastian Mallaby of The Washington Post pointed out in a 2005 column that “The average Wal-Mart customer earns $35,000 a year, compared with $50,000 at Target and $74,000 at Costco. Moreover, Wal-Mart’s ‘every day low prices’ make the biggest difference to the poor, since they spend a higher proportion of income on food and other basics.”

On August 22nd, Paul Gessing, president of the Rio Grande Foundation, Dr. Deane Waldman, a pediatric cardiologist at UNMH and an adjunct scholar at Rio Grande Foundation, and former US Rep. Bill Redmond, appeared on a panel discussion to discuss the health care law known as “ObamaCare.”

The event was hosted by Libre Initiative and the panel is introduced by Michael Barrera of Libre.

8-22-12 Health care forum from Paul Gessing on Vimeo.

You can listen to Romney’s speech here. Overall, his proposals strike me as reasonable and dedicated to embracing the free market energy sources as opposed to a government-managed and controlled energy sector. This provides a stark contrast to Obama on energy.

Unfortunately, as is so often the case with Romney, he steals a measure of defeat from the jaws of victory. The theme of his Hobbs speech (complete with banners) was “Energy Independence by 2020.” This is silly. Robert Bryce, an excellent free market energy analyst has written a book on the topic.

Energy is no different from any other item that is traded across national boundaries. Even if America is “self-sufficient” in terms of energy insofar as it can produce as much energy as is necessary, the idea of “independence” makes it sound like trade in energy is a bad thing to be avoided when it actually helps us all.

In terms of his specific policies, Romney is right on in urging completion of the Keystone XL pipeline, reforming the federal permitting process, and eliminating the wasteful subsidization of wishful energy technologies. For more on Romney’s speech and the reaction to it among attendees, check out Capitol Report New Mexico.

One of many signs of Congressional ineptitude is its willingness to continue shoveling money into Amtrak (about $1.5 billion annually at last count), the government-owned (socialized) rail monopoly. Obviously, cutting $1.5 billion is not going to solve our national deficit which runs at approximately 100 times that amount, but it is symbolic and you have to start somewhere.

Recently, it was reported that Amtrak lost $834 million in the last 10 years selling hamburgers, drinks, and other food to a captive audience on its trains.

It is long-past time to sell Amtrak off to the highest bidder or, where no one will buy the railroad, simply abandon rail service. I do know that I don’t want any more of this “government efficiency” brought to my health care and other, more complicated areas of the economy.

President of National Right to Work Foundation to
Speak at Rio Grande Foundation Event!

Mark Mix, President of the National Right to Work Legal Defense Foundation and National Right to Work Committee will speak on the importance of Right to Work legislation for economic development and its potential for New Mexico at a Rio Grande Foundation-sponsored luncheon.

The event will be held on Wednesday, September 12, 2012 from noon to 1:00PM at the Marriott Pyramid which is located at 5151 San Francisco Road NE in Albuquerque.

Because of the importance of Mr. Mix's message, the luncheon is being offered at the discounted price of $25 per seat. After September 5th, the price will rise to $35.

Reserve your seat today by calling 505-264-6090 or by mail at: P.O. Box 40336, Albuquerque, NM  87196 (just note "Right to Work" on the envelope) or online here. Reserve your seat for this important event today!

According to a recent Rio Grande Foundation report (download here), New Mexico could see more than 42,000 jobs created between now and 2020 with the adoption of Right to Work legislation? Mix will explain what such a law does (and doesn’t do) and why states like Indiana and Oklahoma have adopted such laws (and why other states are considering them).

Under the leadership of Mr. Mix, the National Right to Work Legal Defense Foundation has continued to provide unparalleled free legal assistance to workers and has utilized cutting-edge legal strategies to protect workers from the abuses of compulsory unionism.

Mr. Mix frequently appears on national television shows including Fox News Channel's Your World: With Neil Cavuto, Glenn Beck and Fox & Friends, and has also appeared on multiple times on CNBC and CNN. Mr. Mix also often serves as a guest on nationally-syndicated radio shows such as the The Lars Larson Show, Jason Lewis Show, Michael Reagan Show and the Jim Bohannon Show.

Similarly, Mr. Mix's writings have appeared in national outlets such as the Wall Street Journal, Washington Times, Investors Business Daily, Washington Examiner and National Review. His pieces have also been featured in widely-read regional publications across the country including the Detroit Free Press, the Orange County Register and the Detroit News.

Mark Mix holds a BA in Finance from James Madison University and an Associates Degree in Marketing from the State University of New York. Prior to joining the National Right to Work Committee in 1990, Mr. Mix worked for several state-level Right to Work groups. He joined the National Right to Work Legal Defense Foundation in 1999.

(Albuquerque) One of the most important decisions facing state policymakers in the months ahead is whether or not to expand their Medicaid programs. Under President Obama’s health care law – as originally written – known as the “Affordable Care Act” or “ObamaCare,” the states would have been required to expand their Medicaid programs to 138 percent of poverty level.

This requirement was struck down by the US Supreme Court, but states are being strongly incentivized to expand Medicaid with the “carrot” of federal matching grants of up to 100% initially. Advocates say that New Mexico should take the “free” money and eagerly expand their Medicaid programs.

Dr. Deane Waldman, an adjunct scholar with the Rio Grande Foundation and a practicing pediatric cardiologist, has a different perspective. In his new report, “What Should New Mexico Do About Medicaid,” which is available here, he explains the issues with Medicaid from both the doctors’ and patients’ perspectives.

Waldman explains the major differences between Medicare and Medicaid, outlines some of the serious problems with Medicaid, and gives examples of Medicaid reforms that have worked in other states like Florida.

Argues Waldman of the Medicaid expansion decision, it “may look like free money, but we all know: a) there is no such thing; b) who will not get the money – providers; and c) who will not get services – patients. Medicaid will follow the same path as Medicare. More and more money will go to the bureaucracy, while less and less will go to people who actually care for patients.”

Sam Bregman is clueless. His cluelessness on economics drives me nuts. The latest exhibit is this piece in the Albuquerque Journal in which he again takes Gov. Martinez to task for “not creating jobs.”

I have debunked Bregman in the past, but I’ll take this opportunity to do it once again.

1) Politicians and government don’t create jobs. Yes, I know, plenty of people bring home paychecks from the government, but everything government does requires it to take resources from other parts of the economy. It merely shifts resources, usually to less economical/efficient uses;

2) Governors are not kings/queens. Gov. Martinez heads up one branch of New Mexico’s government (the executive). The Legislature and the Courts are dominated by Democrats. If Republicans held all three branches and the economy was in terrible shape, Bregman might have a leg to stand on, but he doesn’t;

3) New Mexico’s unemployment rate is 6.6 percent. That is too high, but it is lower than that in 33 other states and lower than the national average of 8.3 percent. The national economy, lest Bregman forget, is governed by a federal government that is headed up by President Obama. As I noted in a previous blog posting, Obama’s record on jobs is terrible. What is Bregman’s excuse for that?

4) On a more personal note, I suppose Bregman would know something about killing jobs in New Mexico. He has personally done it and no, I’m not referring to his career as a lawyer. Rather, he used to own the New Mexico Thunderbirds basketball team, but sold them to an out-of-state interest that moved them out of New Mexico, thus costing several people their jobs or at least moving them out of state. Do I blame Bregman for this? Not really. I went to a few T-birds games and enjoyed them, but if he was losing gobs of money on the deal, I don’t expect him to continue pouring money into it. But, it is bit silly for him to keep making such silly points in the newspaper.

I await Bregman’s opinion pieces on the job-killing aspects of minimum wage increases.

AFL-CIO affiliate Working America and associated organizations are currently pursuing an effort to raise the minimum wage in Albuquerque from $7.50 an hour to $8.50. Unlike past hikes in the mandated wage, this proposal would also increase the wage annually to mirror the rate of inflation.

The cause of improving low-income workers living standards is surely a noble one, but the rationale behind the proposed wage hike is riddled with misconceptions concerning the economics of labor. Well-intended policies do not necessarily generate positive outcomes, rather unintended consequences are inevitable.

Consider the purported beneficiaries of a higher minimum wage. While often portrayed as single moms with children, the reality is that only about 20 percent of those currently earning the minimum wage in New Mexico are the breadwinners in families with children. More than 50 percent either live with their families, a spouse, or have some other family support structure in place to pay a majority of the bills.

Additionally, the average family income of families with a minimum-wage earner exceeds $55,000 and the median exceeds $43,000 annually. It is far more likely that a minimum wage earner is part of a family unit with higher-paid members than it is that they are using a minimum wage job to support a family. Even in that stereotypical situation, that family is not living on a minimum wage salary. There are dozens of programs including the Earned Income Tax Credit, food stamps, and Medicaid to help pay the bills and provide needed goods and services.

Roughly half of New Mexicans who are currently working at the minimum wage have either just recently entered the workforce or are working “odd jobs” for extra income. This is affirmed by data from the Census Bureau which shows that approximately half of all minimum wage workers are what might be called their “prime working years (26-65). The other half are aged 25 or less or are older than 65.

Of course, mandated wage laws overlook the fact that different people have different skills and do work that is worth more or less in the marketplace. These laws disregard this fact and force employers to pay higher prices for labor despite massive differences in quality. The increase in the price of labor inevitably forces employers to make tradeoffs. These can include demands for the increase of worker productivity, cutting or abolishing non-mandated fringe benefits, decreasing work hours, and the firing (or non-hiring) of low-productivity employees i.e. marginal workers who often consist of the working poor and teenagers.

Already, in today’s weak economy, New Mexico’s teen unemployment rate is 22.6 percent – a dramatic increase from 13.2 percent in 2002 (prior to the last Congressionally-mandated bump in the minimum wage and the recent economic downturn). Increasing Albuquerque’s minimum wage could push even more young people out of the work force entirely.

Laws which artificially raise the price of labor send signals to entrepreneurs who view such interventions as just one more obstacle placed upon starting a small business. It is reasonable to consider that a mandated price hike on labor may very well turn away individuals who would have otherwise proceeded with entering the market. Increasing the expenses associated with starting a business will not benefit the populace of Albuquerque, but instead create barriers to entry for the aspiring entrepreneur.

Raising the minimum wage rate in Albuquerque is not the correct solution to improve the city’s economy or help those struggling to get by. The answer is to provide an environment whereby businesses can operate free of undue and harmful regulations, where individuals are free to competitively pursue employment, and private entrepreneurs are given the freedom to actualize their ideas and create value within the society. Economic liberty, not the coercive actions of the state, is what is necessary for the citizens of Albuquerque to prosper.

Ben Sugg is a policy analyst with New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, non-partisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.