Voice For Liberty

Tag: School choice

  • Kansas public school establishment ought to thank Sam Brownback

    Kansas public school establishment ought to thank Sam Brownback

    Kansas public schools ought to thank the governor and legislature for failing to give parents the power of school choice.

    The public school establishment in Kansas is angry with the governor and legislature over school finance. Really, the public schools ought to be grateful for Governor Sam Brownback. In many states with conservative Republican governors, school choice programs have grown. In the summer of 2011 the Wall Street Journal reported on what it called “The Year of School Choice.”

    Some governors have been warriors for school choice. Not Kansas Governor Sam Brownback, however. He signed a small school choice bill when it landed on his desk. But he has not vocally advocated for expanded school choice. There are several Kansas legislators who are in favor of school choice, but not enough, certainly not in leadership.

    As public schools and their unions despise any form of school choice and the accountability it provides, they should be grateful for our governor and legislature. Kansas public schools operate without much competition, and that’s the way public schools and their unions like it.

    School choice in Kansas

    How little school choice exists in Kansas? One implementation of school choice that is popular in some states is the charter school. According to National Alliance for Public Charter Schools, Kansas has a poor charter school law. That is, Kansas law makes it difficult to start and maintain a charter school. Of the 43 states that have charter schools, Kansas ranked 42. Kansas public schools are effectively shielded from the diversity and competition that charter schools provide.

    Others have also found the Kansas charter school law to be very restrictive. The Center for Education Reform found the Kansas charter school law to be the worst in the nation.

    Governor Brownback signed a tax credit scholarship program. The Kansas program is small and restrictive, earning the grade of “D” from Center for Education Reform. Kansas has no school voucher program.

    Altogether, Kansas parents have little power to choose schools for their children. The primary power Kansas parents have is to choose where they live. If a family can afford to, it can live in a district where the public schools are not as bad as they are in other districts. Given that these desirable districts almost always cover higher-income areas, poor parents don’t have this possibility.

    School choice won’t fix everything, but it goes a long way. Here’s a portion of the 2011 Wall Street Journal article “The Year of School Choice.”

    Choice by itself won’t lift U.S. K-12 education to where it needs to be. Eliminating teacher tenure and measuring teachers against student performance are also critical. Standards must be higher than they are.

    But choice is essential to driving reform because it erodes the union-dominated monopoly that assigns children to schools based on where they live. Unions defend the monopoly to protect jobs for their members, but education should above all serve students and the larger goal of a society in which everyone has an opportunity to prosper.

    This year’s choice gains are a major step forward, and they are due in large part to Republican gains in last fall’s elections combined with growing recognition by many Democrats that the unions are a reactionary force that is denying opportunity to millions. The ultimate goal should be to let the money follow the children to whatever school their parents want them to attend.

  • Block grants a chance for more school choice in Kansas

    Block grants a chance for more school choice in Kansas

    The block grant school funding bill under consideration in the Kansas Legislature would hold districts harmless for enrollment declines due to school choice.

    Critics of school choice programs allege that as public school districts lost students to other schools, and the students’ funding follows the students to the new schools, school districts are worse off, financially speaking. That’s because school districts say that their costs do not fall as rapidly as does enrollment, although this has been found to be untrue.

    But under the block grant bill in Kansas, school funding is no longer tied to enrollment, at least for the next two years. This means that when school districts lose students for any reason, including due to school choice programs, their revenue stays the same. Funding rises, when measured on a per-pupil basis.

    This should be an opening for increased school choice programs in Kansas. Presently Kansas has a law that allows charter schools, but there are few such schools. That’s because local school districts have to approve a charter school, and few districts will do that. We have a tax credit scholarship program in Kansas this year, but it is capped at a small amount of money, and student eligibility requirements mean that not everyone can participate. An “eligible student” is a child who qualifies as an at-risk pupil (eligible for free lunch under the National School Lunch Act) and either attends a school that would qualify as either a Title I Focus School or a Title I Priority School; or has received an educational scholarship under this program and has not graduated from high school or reached 21 years of age. Also, eligible students must have been enrolled in a public school in the year prior to receiving the scholarship or be eligible to be enrolled in a public school, if under the age of six. These are significant restrictions that focus the scholarship program on students who need it most, and who are least likely to be able to afford private schools on their own. But many other Kansas schoolchildren would also benefit from school choice, as they do in other states.

    With the primary criticism of school choice out of the picture (the alleged “drain” on public school funding) supporters of choice have an opportunity to advance their cause. So far, no one has publically advanced any proposals or legislation for expansion of school choice in Kansas.

  • School choice and state spending on schools

    School choice and state spending on schools

    States like Kansas that are struggling to balance budgets could use school choice programs as a way to save money.

    When states consider implementing school choice programs, a common objection is that the state can’t afford school choice. Public school spending interest groups will tell legislators that school choice programs drain money from already under-funded public schools. School choice, they will say, is a luxury the state can’t afford, much less local school districts.

    Research shows, however, that school choice programs can be constructed in a way that does not harm local school districts. Simply: A typical Kansas school district has variable costs of $8,709 per student. If such a district loses a student and associated funding, as long as that funding is less than $8,709, the district’s fiscal situation is improved. Base state aid in Kansas is $3,852, although state spending per student is $7,088 (2013 to 2014 school year). So it’s quite likely that any student who leaves a public school for any reason, including attending a private school or home school, improves the fiscal standing of the district, on a per student basis.

    At the state level, a similar dynamic applies, although the reasoning is easier to follow: If the state funds that follow the child are less than average state spending per student, the state has the opportunity to save. The savings can be large, if states are willing to embrace choice programs.

    Savings from school voucher programs, from Friedman Foundation for Educational Choice. Click for larger version.
    Savings from school voucher programs, from Friedman Foundation for Educational Choice. Click for larger version.
    In the report The School Voucher Audit: Do Publicly Funded Private School Choice Programs Save Money?, prepared for the Friedman Foundation for Educational Choice, the author finds that from 1991 to 2011, voucher programs alone have saved state governments a cumulative $1.7 billion. While representing just a small portion of total state spending, this total is from the ten states that had voucher programs in effect at the time of the study. In 2011 about 70,000 students were in these voucher programs.

    The key understanding is that when student enrollment declines — for whatever reason — schools see reduced costs. For those who deny that, there is a corollary:

    Opponents claim, simplistically, that school choice drains money from the public school system. That rhetoric obscures an important fact: A public school is also relieved of a cost burden for any student switching to private school. By not acknowledging such variable cost savings, opponents implicitly argue that all public school costs are “fixed.” By extension, they then conclude that the loss of funding for a student using a voucher to transfer to a private school harms all the remaining students at the affected public school. But that argument strains credulity: If there were no savings when a public school’s enrollment declines, logic dictates there would be no additional costs for schools when their enrollment grows.

    It may be that costs do not decrease (or rise) smoothly as enrollment declines: “That phenomenon reflects the reality that schools must fund classrooms, not students.” Many businesses face this cost structure and are able to adapt, and it should be no different for schools.

    An important note is that as students leave a school and its cost burden falls, the school must actually take steps to reduce spending in response to the reduced cost burden it experiences.

    A problem is that critics of school choice may notice that no money has been saved after school choice programs are implemented. This is because “savings are typically reallocated to other spending, either directly or indirectly.” It is not uncommon for public schools to be held fiscally harmless for declining enrollments. The net effect is that public schools are paid for students that are no longer enrolled, and that absorbs the savings due to school choice. The cost savings are there; but are still spent on schools rather than spent elsewhere, saved, or returned to taxpayers.

  • Rally for school choice in Kansas

    Rally for school choice in Kansas

    This month, parents and children from around Kansas rallied in the Kansas Capitol for school choice.

    Speakers included James Franko of Kansas Policy Institute. He told the audience that children deserve better than what they are getting today. For many, he said that might be in a public school, but for many others it may be in a private school. Parents and their children should make that decision. It shouldn’t be based on their zip code. Individuals, not institutions, should be the focus.

    Kansas now has a private school choice program. Franko told the audience that newspaper coverage of this program emphasizes how it helps private schools and hurts public schools. But we should be reading stories about how school choice helps kids, giving each child the freedom and opportunity to find the best educational fit. He explained that school choice also helps the students who remain in public schools, referring to a Friedman Foundation for Education Choice study. “It’s about helping every single child,” he said.

    The study Franko mentioned is A Win-Win Solution: The Empirical Evidence on School Choice. In its executive summary, author Greg Forster, Ph.D. writes “Opponents frequently claim school choice does not benefit participants, hurts public schools, costs taxpayers, facilitates segregation, and even undermines democracy. However, the empirical evidence consistently shows that choice improves academic outcomes for participants and public schools, saves taxpayer money, moves students into more integrated classrooms, and strengthens the shared civic values and practices essential to American democracy.”

    Later, the specific finding that Franko used in his talk: “Twenty-three empirical studies (including all methods) have examined school choice’s impact on academic outcomes in public schools. Of these, 22 find that choice improves public schools and one finds no visible impact. No empirical study has found that choice harms public schools.”

    Michael Chartier of the Friedman Foundation for Education Choice said that there are now 51 school choice programs in 24 states plus the District of Columbia.

    School Choice Rally, Kansas Capitol 2015-02-02 15.07.38 HDRAndrea Hillebert, principal of Mater Dei Catholic School in Topeka told the audience that school choice benefits families, schools, and the state. Families can choose the learning environment that is best for their children, and are not penalized if they choose a school that is not run by the government. She told the audience that “school choice encourages — requires — families to take an active role in shaping their students’ future.” Schools benefit because consumer choice is a catalyst for innovating programming and continuous improvement. The state benefits from the increased achievement of students in non-public schools.

    Susan Estes of Americans for Prosperity – Kansas explained that even as a former public schoolteacher, it has been a challenge for her to navigate the school system so that the needs of her three children were met. She said that parents not only deserve, but have the right to be the primary decision maker for their children.

    Bishop Wade Moore, founder and principal of Urban Preparatory Academy in Wichita, completed the program. Urban Prep is a new private school in northeast Wichita, and students from that school attended the rally. He said that our legislators have “a moral responsibility to do what is right for each Kansas kid.” He mentioned the students that are pushed through the system until they graduate, but are unprepared for college, trade school, or employment. “A lot of those children have no chance at life. So we say that we have a crisis in this nation,” he said.

    Alluding to how Kansas has few school choice programs, Moore said “It’s time for us to wake up and move ahead, like the rest of the nation, in education reform.” He said that he heard a school superintendent make the statement that our children and parents have a choice in education. He said “They can choose one of our schools to attend.” That is not choice, Moore said. Real choice is when parents have the opportunity to go outside the public school system.

    The reason for the poor academic performance of many children is that their parents have not had choice and control over the children’s education. “It is imperative that all children, regardless of their race, gender, place of residence, and socio-economic status, learn the concepts and strategies necessary for them to develop and succeed,” he told the audience.

  • WichitaLiberty.TV: That piano, the effect of school choice on school districts, and making Wichita inviting.

    WichitaLiberty.TV: That piano, the effect of school choice on school districts, and making Wichita inviting.

    In this episode of WichitaLiberty.TV: The purchase of a piano by a Kansas school district is a teachable moment. Then, how do school choice programs affect budgets and performance of school districts? Finally, making Wichita an inclusive and attractive community. View below, or click here to view at YouTube. Episode 75, broadcast February 15, 2015.

  • How do school choice programs affect budgets and performance of school districts?

    How do school choice programs affect budgets and performance of school districts?

    Opponents of school choice programs argue the programs harm school districts, both financially and in their ability to serve their remaining students. Evidence does not support this position.

    If school choice programs — charter schools, vouchers, or tax credit scholarships — harmed the existing public schools, it would be a reasonable argument against school choice. Especially if the students who remain in public schools had less of an opportunity to learn.

    The prevalent argument is that charter schools and other public school alternatives drain funds from public schools. That is, if a public school student chooses a charter or private school, and if the money follows the student to the other school, the public school district loses money that it otherwise would have received. Therefore, the public school district is worse off, and so too are its students.

    A rebuttal is that since a public school has shed the responsibility for schooling the student, its costs should fall correspondingly. This would be true if all the costs of a public school are variable. Some costs are fixed, however, meaning they can’t be adjusted quickly — in the short run, that is. An example is the cost to maintain a classroom. If a school has one less student than the year before, it still requires the same support for utilities. One or several fewer students doesn’t mean that fewer teachers are needed.

    Public schools and their lobbyists, therefore, argue that school choice programs are a financial burden to public schools. Under school choice programs, they say, public schools lose students and their accompanying funding, but the public schools retain their fixed costs.

    The Fiscal Effects of School Choice Programs on Public School Districts (cover)The question, then, is what portion of a school’s costs are variable, meaning costs that schools can adjust quickly, and what portion are fixed, meaning they can’t be adjusted quickly? Benjamin Scafidi, professor of economics at Kennesaw State University, has examined schools looking for the answer to this question. His paper The Fiscal Effects of School Choice Programs on Public School Districts, published by The Friedman Foundation for Educational Choice, holds answers to these questions.

    The first question is this: What is the relation of school choice programs to school districts’ variable costs? Scafidi has endeavored to determine the breakdown between variable and fixed costs in each state. In Kansas, for the 2008 – 2009 school year, total spending per student was $11,441. Of that, Scafidi estimates $3,749, or 32.8 percent, were fixed costs. Variable costs were $7,692, or 67.2 percent. Since then spending has risen, but there’s no reason to think the allocation of costs between fixed and variable has changed materially. For the school year ending in 2014 total spending per student was $12,960. That implies fixed costs per student of $4,251 and variable costs per student of $8,709.

    Now, how much money would a public school lose if a student chose, say, a private voucher school under a voucher program? In Kansas we don’t have vouchers for school choice, so we can’t answer the question directly. We do know that base state aid per pupil in Kansas is $3,852. That is the starting point for state spending per student.

    In a recent presentation on this topic, Scafidi said: “Any school choice program where about $8,000 per student or less, on average, follows the child to the school of his or her choice, improves the fiscal situation of the public school district, on average, and students who remain in public schools have more resources available for their education.”

    A typical Kansas school district, therefore, with variable costs of $8,709 per student, has its fiscal situation improved when it loses a student and its $3,852 in state funding.

    Kansas School Finance Formula, from Kansas Policy Institute, August 2014
    Kansas School Finance Formula, from Kansas Policy Institute, August 2014
    Many Kansas students, however, trigger much more funding due to weightings that compensate for the purported higher costs of some situations. The largest weighting in Kansas, based on numeric magnitude, is the at-risk weighting. It adds 45.6 percent to base state aid. So if a Kansas public school loses such a student and weighting, it loses $5,608 in funding. That is far less than its variable costs of $8,709. State funding for Kansas schools in the 2013 to 2014 school year was $7,088 per student, still less than school districts’ variable costs.

    I asked Scafidi what is the dividing line between variable and fixed costs? The answer is that within two or three years, schools should be able to adjust their fixed costs to be in line with their needs. This is in line with the economic and accounting reality that says in the long run, all costs are variable.

    Can school districts adjust their costs quickly in response to changing enrollments? This may be a problem for the very smallest districts, those with just one or two teachers per grade, Scadifi concedes. In his paper, Scafidi illustrates two examples of districts in Georgia with just over 1,000 students making adjustments. In Kansas, there are 286 school districts. Of these, 207 have enrollment of less than 1,000 students, but only 20 percent if the state’s students are in these small districts.

    School districts often dispute the contention that they are able to reduce their variable costs rapidly in response to enrollment changes. Scafidi notes that if school districts say they cannot reduce costs when they lose students, the implication is that all of their costs are fixed. If true, then schools should not receive additional funding when enrollment rises. After all, if all their costs are fixed, costs do not change with enrollment — either up or down.

    We have seen that school choice programs do not harm the finances of local school districts. The second question concerns the quality of education for the students who remain in public schools.

    To answer this question, we must recognize the wide variation of teacher efficacy. Some are very good, and some very poor. Further, the difference between good and bad is large. Eric A. Hanushek and others have found that very good teachers routinely produce 1.5 years of gain in achievement during an academic year. Bad teachers produce 0.5 years of gain. If a student is unfortunate enough to experience ineffective teachers two or three years in a row, the student may be so far behind as to never catch up.

    What does this have to do with school choice programs? If public schools have to downsize due to students lost for any reason — including school choice programs — this gives public schools an opportunity to shed their least effective teachers. This means that students who remain in public schools have a higher likelihood of experiencing the most effective teachers.

  • Wichita schools seek to rebrand

    Wichita schools seek to rebrand

    While poormouthing and suing taxpayers for more money, the Wichita school district wants to spend on a rebranding and marketing campaign.

    The idea that a government agency needs to market itself illustrates a few inconsistencies, as shown below. But spending any money on this effort shows that the district leadership is a little out of touch with the taxpayers.

    First, taxpayers are being sued for more money by a collection of Kansas school districts, including the Wichita district. So the district is using taxpayer money to extract more taxpayer money, and now it wants to spend more taxpayer money to tell taxpayers how wonderful it is.

    Second, school districts continually say how spending has been “cut to the bone,” and that there is nowhere else to cut. But, there is money to spend for marketing.

    The article quoted Wendy Johnson, director of marketing and communications for the Wichita district: “For people who suggest that we need to operate like a business and employ business strategies: Businesses tune into their customers, do market research, are active listeners all the time.” (Wichita school board to consider hiring marketing firm, rebranding district; Wichita Eagle, January 11, 2015)

    First of all, the Wichita school district is not an “active listener.” If you say what the district wants to hear, yes. But the district is not welcoming to those with a different opinion. A notable example comes from 2012 when Betty Arnold was board president. At a meeting, citizens had criticized the board for large and important issues, but also for such mundane things as the amount of the superintendent’s monthly car allowance. Arnold admonished citizens for speaking about things like this in public. It’s not respectful, she said. Finally, after directing a uniformed security guard to station himself near a citizen speaker, Arnold told the audience: “If we need to clear the room, we will clear the room. This board meeting is being held in public, but it is not for the public, or of the public. And I hope you understand that.”

    The idea that the Wichita school district is in any way like a business is laughable.

    Most businesses do not have laws that force customers to use their products and services. (Mandatory attendance laws.)

    Most businesses are not able to force people to pay them even if people do not use their service. Even people who pay to send their children to private schools must still pay the public schools. (Schools are funded by taxes.)

    Businesses are not able to decide whether to allow new competitors. (Usually this is the case. Some states have laws that allow existing companies like movers decide whether new moving companies should be allowed to form.)

    The article mentioned charter schools as a source of competition for the Wichita school district. But the district must approve the formation of any charter schools within its boundaries. Anyone who investigates would soon realize that the Wichita school district has no intent of allowing charter schools.

    If the Wichita school district wanted to experience a little bit of the competition for customers that business face — competition which would improve the district — it could signal its awareness to approve charter school applications. That would do more to improve the experience for Wichita schoolchildren than any marketing message.

    Ratios of teachers and employees to students have fallen in the Wichita school district.
    Ratios of teachers and employees to students have fallen in the Wichita school district.
  • Kansas minimum wage hike would harm the most vulnerable workers

    Kansas minimum wage hike would harm the most vulnerable workers

    A bill to raise the minimum wage in Kansas will harm the most vulnerable workers, and make it more difficult for low-skill workers to get started in the labor market.

    Legislation introduced by Representative Jim Ward of Wichita would raise the minimum wage in Kansas by one dollar per hour each year until it reaches $10.25 per hour in 2018. The bill is HB 2012, captioned “enacting the Kansas working families pay raise act.”

    The caption of the bill, referencing “working families,” hints at the problem, as seen by progressives. The minimum wage does not generate enough income to raise a family. While the bill calls for raising the minimum wage, it makes no reference of whether workers are raising a family, or working part-time for pin money while in high school.

    But aside from that, there is the important question to consider: Will raising the minimum wage help or harm low-wage earners? And are the policy goals — taken in their entirety — of the groups pressing for a higher minimum wage in the best interest of workers? The answer to these questions is that higher minimum wages harm low-wage workers and low-skilled people who would like to work.

    The great appeal of a higher minimum wage mandated by an act of the legislature is that it seems like a wonderfully magical way to increase the wellbeing of low-wage workers. Those who were earning less than the new lawful wage and who keep their jobs after the increase are happy. They are grateful to the lawmakers, labor leaders, newspaper editorialists, and others who pleaded for the higher minimum wage. News stories will report their good fortune.

    That’s the visible effect of raising the minimum wage. But to understand the entire issue, we must look for the unseen effects.

    The not-so-visible effect of the higher wage law is that demand for labor will be reduced. Those workers whose productivity, as measured by the give and take of supply and demand, lies below the new lawful wage rate are in danger of losing their jobs. The minimum wage law says if you hire someone you must pay them a certain amount. The law can’t compel you to hire someone, nor can it compel employers to keep workers on the payroll.

    The difficulty is that people with lose their jobs in dribs and drabs. A few workers here; a few there. They may not know who is to blame. Newspaper and television reporters will not seek these people, as they are largely invisible, especially so in the case of the people who are not hired because of the higher wage law.

    In the real world, business owners have many things they can do when labor becomes more expensive. Some things employers do to compensate for higher labor costs include these:

    • Reduce non-wage benefits such as health insurance.
    • Eliminate overtime hours that many employees rely on.
    • Substitute machines for labor. We might see more self-service checkout lanes at supermarkets, more automated ordering systems at fast food restaurants, and more use of automated telephone response systems, for example.
    • Use illegal labor. Examples include paying employees under the table, or requiring work off-the-clock.
    • Some employers may be more willing to bear the risks of using undocumented workers who can’t complain that they aren’t being paid the minimum wage.
    • Some employers may decide that the risks and hassles of being in business aren’t worth it anymore, and will close shop. Others simply can’t afford the higher wages and close. The Wall Street Journal reported on a nonprofit restaurant that couldn’t survive under Michigan’s higher minimum wage, reporting “These unintended consequences of a minimum wage hike aren’t unique to small towns in south-central Michigan. Tragically, they repeat themselves in locales small and large each time legislators heed the populist call to ‘raise the wage.’”

    If we are truly concerned about the plight of low-wage workers we can face some harsh realities and deal with them openly. The simple fact is that some people are not able to produce output that our economy values very much. They are not very productive. Passing a law that requires employers to pay them more doesn’t change the fact that their productivity is low. But there are ways to increase productivity.

    One way to increase workers’ productivity is through education. Unfortunately, there is ample evidence that our public education system is failing badly.

    Capital — another way to increase wages — may be a dirty word to some. But as the economist Walter E. Williams says, ask yourself this question: who earns the higher wage: a man digging a ditch with a shovel, or a man digging a ditch using a power backhoe? The difference between the two is that the man with the backhoe is more productive. That productivity is provided by capital — the savings that someone accumulated (instead of spending on immediate consumption or taxes) and invested in a piece of equipment that increased the output of workers and our economy.

    Education and capital accumulation are the two best ways to increase the productivity and the wages of workers. Ironically, the people who are most vocal about raising wages through legislative fiat are also usually opposed to meaningful education reform and school choice, insisting on more resources being poured into the present system. They also usually support higher taxes on both individuals and business, which makes it harder to accumulate capital. These organizations should examine the effects of the policies they promote, as they are not in alignment with their stated goals.

    If it were possible to increase the prosperity of everyone by simply passing a law, we should do it. But that’s not the way the world works regarding minimum wage laws.

    Who is harmed?

    Walter Williams explains who is most harmed by minimum wage laws, and also the politics:

    How about the politics of the minimum wage? In the political arena, one dumps on people who can’t dump back on him. Minimum wages have their greatest unemployment impact on the least skilled worker. After all, who’s going to pay a worker an hourly wage of $10 if that worker is so unfortunate as to have skills that enable him to produce only $5 worth of value per hour? Who are these workers? For the most part, they are low-skilled teens or young adults, most of whom are poorly educated blacks and Latinos. The unemployment statistics in our urban areas confirm this prediction, with teen unemployment rates as high as 50 percent.

    The politics of the minimum wage are simple. No congressman or president owes his office to the poorly educated black and Latino youth vote. Moreover, the victims of the minimum wage do not know why they suffer high unemployment, and neither do most of their “benefactors.” Minimum wage beneficiaries are highly organized, and they do have the necessary political clout to get Congress to price their low-skilled competition out of the market so they can demand higher wages. (Politics and Minimum Wage)

    The role of labor unions

    Labor unions favor higher minimum wages laws. Why? Here’s what one union said in making its argument: “However, not only is $9/hour a step in the right direction, it is also good for union members, who stand to seek even greater wage increases in their contracts, if they make more than the current minimum wage of $7.25.” ( United Food and Commercial Workers International Union (UFCW).)

    For more on this, see Why Unions Want a Higher Minimum Wage: Labor contracts are often tied to the law — and it reduces the competition for lower-paying jobs.

    Minimum wage as competitive weapon

    We also need to examine the motivations of business firms that support a higher minimum wage. Sometimes they see a way gain a competitive advantage.

    In 2005 Walmart came out in favor of raising the national minimum wage. Providing an example of how regulation is pitched as needed for the common good, Walmart’s CEO said that he was concerned for the plight of working families, and that he thought the current minimum wage of $5.15 per hour was too low. (“Working families.” That’s in the caption of the proposed Kansas law. It’s no coincidence.) If Walmart — a company progressives love to hate as much as any other — can be in favor of increased regulation of the workplace, can regulation be a good thing? Had Walmart discovered the joys of big government?

    The answer is yes. Walmart discovered a way of using government regulation as a competitive weapon. This is often the motivation for business support of regulation. In the case of Walmart, it was already paying its employees well over the current minimum wage. At the time, some sources thought that the minimum wage could be raised as much as 50 percent and not cause Walmart any additional cost — its employees already made that much.

    But its competitors didn’t pay wages that high. If the minimum wage rose very much, these competitors to Walmart would be forced to increase their wages. Their costs would rise. Their ability to compete with Walmart would be harmed.

    In short, Walmart supported government regulation in the form of a higher minimum wage as a way to impose higher costs on its competitors. It found a way to compete outside the marketplace. And it did it while appearing noble.

  • WichitaLiberty.TV: Kansas school finance and reform, Charles Koch on why he fights for liberty

    WichitaLiberty.TV: Kansas school finance and reform, Charles Koch on why he fights for liberty

    In this episode of WichitaLiberty.TV: The Kansas legislature passed a school finance bill that contains reform measures that the education establishment doesn’t want. In response, our state’s newspapers uniformly support the system rather than Kansas schoolchildren. Then, in the Wall Street Journal Charles Koch explains why liberty is important, and why he’s fighting for that. Episode 39, broadcast April 20, 2014. View below, or click here to view at YouTube.