By vetoing New York's prevailing wage bill, Mike Bloomberg shows once again that he has zero grasp of economics. How in the world does reducing or limiting the income of people create more jobs? Maybe under a slave system, but that's about it.
The fact is, low wages lead to less job creation, not more. Cutting or limiting the income of workers hits businesses where it hurts most--in demand for the very products they produce. When incomes fall or stay stagnant, so do sales. Marshall Auerbach eloquently explains this economic fact in a terrific post here.
I am baffled as to why this is so hard to understand. The total of all things produced in an economy is equal to the income paid (received). The two are identical. That means, when you talk about limiting or shrinking someone's income you're also talkng about limiting or shrinking the total output of goods and services (real wealth). Moreover, it's pretty hard if not impossible to create jobs when output is slowing or shrinking. Unless of course, you're freakin' Houdini.
Sadly, this is not Mike Bloomberg's first display of gross ignorance when it comes to the economy. He put on a terrific dumb show back in November when he gave a speech about the state of the U.S. and how we've gone off the track in terms of fiscal responsibility, blah, blah, blah; how the debt has zoomed to who knows how many thousand per every man, woman and child, blah, blah, blah and how we've run out of money (I'm puking now). Don't worry, he definitly used all those well-worn, yet massively stupid cliches in abundance, I can assure you.
Back then it was just a speech, nothing more. We could listen to it, get sick, and forget about it the next day. This time, however, it affects people's lives. Vetoing the prevailing wage bill ensures that the wages of city workers--who are already having a hard time making ends meet--will not be sufficient to allow them to live decent lives now or in the future. And why is he doing this? To "be competitive." Yes, it'll be a competitive race to the bottom ensuring that all workers earn less and less and less until there's no money to pay for anything that Mike's cherished businesses produce. Then Mayor Bloomberg, er...Houdini...will have to magically come up with a way to keep those businesses from going out of business.
The more I see of Mike Bloomberg the more I feel he has been a terrible Mayor and the more he convinces me that having a businessman in government is a horrible idea. Government should not be about profits, it should be about the public purpose.
Mike Bloomberg took over the city at a time when it was still flying high on all the positive momentum left over from the economic boom of the 1990s. It made him look good, but it had nothing to do with his leadership. Then came 9/11 followed by the financial crash and what did Bloomberg do? He doubled down on Wall Street, giving massive tax breaks to the likes of Goldman Sachs, Morgan Stanley and other, big, financial firms while closing schools, firehouses, senior centers, shelters and other important city departments and services. Now he vetos wage increases for workers saying it will "create jobs" even as his cuts have led to the layoffs of thousands of teachers, cops and firemen.
Great economics, Mike...great economics!