Tag: economy

bookmark_borderRestaurant PPE fees are not price transparency

Posted on by Marissa

As they struggle to stay afloat during the Covid-19 pandemic, some restaurants are charging their customers fees for the added expenses required to comply with safety regulations. In some ways, this is understandable. Restaurants have been hit hard by the pandemic, and they are spending extra money on masks, hand sanitizer, cleaning supplies, barriers, takeout containers, paper menus, and individually packaged utensils and condiments. But from the customer’s point of view, it is simpler and more transparent for restaurants to simply increase their prices, as opposed to charging diners an extra fee.

Boston.com did an article about this new trend. A few examples listed in the article: Brassica Kitchen + Café in Jamaica Plain is charging a 3% fee for all takeout orders in addition to the 3% administrative fee that it charges for in-restaurant dining; Five Horses Tavern, Worden Hall, and Elm Street Taproom have introduced a 3% PPE fee; Shy Bird in Cambridge and Branch Line in Watertown have introduced a 5% “Safe & Sustainable” fee; and Top Dog in Rockport has implemented a 75 cent fee per order.

Several restauranteurs were interviewed in the article and explained the reasoning behind their new fees. “Diners really want to know where their money is going, and we wanted to make it really clear,” said Rebecca Kean of Brassica Kitchen + Café. Laurie Russell of Top Dog said that if she were a customer, she’d much prefer a fee to a price increase. “I’d be so upset,” she said. “I really just didn’t want to raise prices.”

I disagree with these sentiments. As a customer, I would much rather see higher prices than a mandatory added fee. In my opinion, PPE fees and safe and sustainable fees are an example of lack of price transparency. Quite frankly, when I purchase a product, I’m not as concerned with seeing where my money is going as I am with simply knowing how much the product is going to cost me. Thanks to tips and taxes which are not included in the prices listed on the menu, the restaurant industry is already lacking in price transparency. The last thing I would want to see when I go to a restaurant (aside from mandatory contact tracing forms, but that’s a whole different issue) is the need to do more math to determine how much I actually have to pay. The price listed on the menu should be the actual price. If a restaurant needs to increase that price from what it was before, I would completely understand, and so would the vast majority of customers. Restaurants are struggling mightily during this pandemic, so I’m hesitant to criticize any of their efforts to make ends meet. But additional fees are not a good solution. Raising prices would be just as effective in covering a business’s added costs and would be more straightforward for customers. Just as shipping and handling charges should be incorporated into the price of an item instead of added on afterward, restaurants should simply set their prices at a level that allows them to stay in business. If something is not optional, it should not be a separate item on the bill.

bookmark_borderCancelling student loans is unfair and unjust

Posted on by Marissa

As the country considers various options for helping the economy recover from the coronavirus pandemic, several lawmakers are pushing for forgiveness of student loans.

For example, Representatives Ayanna Pressley and Ilhan Omar introduced a bill in March to cancel up to $30,000 in student debt per person. Senate Democrats have pushed unsuccessfully for student debt forgiveness to be included in both the CARES Act and the HEROES Act. The group Student Debt Crisis has gathered 1.2 million signatures in support of urging Congress to forgive student loans. Bernie Sanders promised to eliminate all student debt during his presidential campaign, and Joe Biden is proposing forgiving student debt for low-income people, teachers, public service workers, and graduates of public and historically black schools.

Student debt forgiveness is now being viewed as a racial justice issue as well. “Black student borrowers borrow and default more than anyone else because of our inability to build generational wealth,” Pressley said to Yahoo Finance.

Pressley also tweeted, “Cancel rent. Cancel mortgage. Cancel student debt.”

Cancelling debt is fundamentally unfair. There are some people who make tremendous sacrifices to pay for college so that they won’t have to take out loans. Some people work throughout their time in college in order to pay tuition. Some people go without in order to save up for college, and some parents start saving for college when their child is born. Have any of the proponents of student loan forgiveness ever considered how those who saved up for college would feel upon learning that all of their sacrifices were for nothing? That they could have spent their money on other things and gotten a college education for free if they had only waited? Forgiving student loans is essentially making college free… but only for people who borrowed money. People who already paid would be stuck having already paid. A plan to cancel student loans would only be fair if anyone who paid for college got his or her money back as well.

But one also needs to consider that cancelling student loans is unfair to people who chose not to go to college, or chose to go to a less expensive college, because of the cost. Imagine having made the decision years ago to forgo college, or to go to a less prestigious college, only to learn that you could actually have gone to an expensive, prestigious college for free. Additionally, forgiving student loans is arguably unfair to people who earned merit scholarships. Imagine getting to attend college for free (or at a substantial discount) as a reward for your intelligence, talent, and academic achievements, only to find out that people without the same achievements also get to attend college for free, simply because they chose to borrow money.

Forgiving debt is unfair and unjust because it provides a benefit to some people while denying that benefit to other people who are equally deserving.

bookmark_borderBiased NYT article about Covid in Sweden

Posted on by Marissa

The New York Times recently published an article criticizing Sweden’s response to the Covid-19 pandemic for not being authoritarian enough. Instead of ordering individuals to stay in their homes and businesses to close, Sweden chose a policy of educating its citizens about risks and allowing them to make their own decisions. Restaurants, bars, stores, gyms, and parks have remained open, and people have been free to go about their lives with few restrictions.

The article by Peter Goodman of the New York Times states: “Not only have thousands more people died than in neighboring countries that imposed lockdowns, but Sweden’s economy has fared little better.” The article criticizes “the assumption that governments must balance saving lives against the imperative to spare jobs, with the extra health risks of rolling back social distancing potentially justified by a resulting boost to prosperity. But Sweden’s grim result — more death and nearly equal economic damage — suggests that the supposed choice between lives and paychecks is a false one: A failure to impose social distancing can cost lives and jobs at the same time.”

The article quotes Jacob Kirkegaard of the Peterson Institute for International Economics, who says: “They literally gained nothing. It’s a self-inflicted wound, and they have no economic gains.”

This viewpoint completely ignores the importance of liberty and individual rights. The main problem with lockdowns and other restrictions on people’s movement and activity is not that they hurt the economy (although that is a big downside); it is that they violate people’s rights. People have a fundamental right to move about freely and to decide for themselves how they wish to balance safety with quality of life. It is morally wrong for the government to order people to stay in their homes and to ban activities because it believes they are too dangerous for people to be allowed to do. So contrary to Kirkegaard’s claims, Sweden did indeed gain something: approximately four months of its citizens living in freedom, with their fundamental rights being respected! Unlike other countries, Sweden refrained from trampling on the rights of its people. That is not nothing.

The tradeoff that governments face when deciding how best to respond to a pandemic is not between safety and economic prosperity. Nor is it, as Goodman’s article suggests, a no-brainer of protecting both safety and the economy as opposed to doing nothing and allowing both to suffer. It is a question of whether or not to sacrifice individual liberty for the common good. And the answer to this question should always be, NO! Individual liberty is not simply a consideration to be balanced against other considerations, such as safety, health, or the economy. Respecting individual liberty is a requirement. As soon as one begins speaking of balancing individual liberty with something else, individual liberty has lost. Rights are absolute, and respecting them is mandatory, regardless of the effects on health, safety, and the economy.

Another claim made in the article is that the virus itself, not restrictive government policies imposed in response to it, is the cause of economic damage. Goodman points out that even in countries such as Sweden that have not forcibly shut businesses down, many people have been voluntarily avoiding businesses because of concerns about catching the virus. He cites a study by the University of Copenhagen which found that people over 70 in Sweden reduced their spending more than they did in Denmark, indicating that they considered shopping to be more risky without government-imposed social distancing measures in place.

But that is exactly what is supposed to happen. People have the right to make their own decisions about which risks, if any, they are willing to take with regards to the virus. This means that people who are comfortable going to stores and restaurants should be free to do so, while people who are not comfortable should be free to stay home. If the fact that the government is not trampling on everyone’s rights makes some people feel less safe, and therefore causes them to decide to stay home, then so be it! People’s decisions to curtail their activities may have the same economic result as forcible shutdowns, but the fact that one of these things is voluntary and the other is not, makes all the moral difference in the world.

By not violating the rights of its citizens, Sweden has done the right thing. The results of this policy, whether measured in lives lost or economic damage, are irrelevant. If a policy violates individual rights – as the lockdowns and stay-at-home orders implemented by most countries do – then it is morally wrong, regardless of how many lives are saved. By assuming that the result of a policy is the only thing that matters, the New York Times article is ignoring the most important thing in the world: individual rights.

bookmark_borderMassGOP gets it right on re-opening plan

Posted on by Marissa

In my home state of Massachusetts, the state Republican Party has been speaking out against excessive government restrictions to fight the coronavirus. Governor Charlie Baker has begun gradually allowing businesses to open (as if the government had a right to order businesses to close to begin with), and dismayingly but unsurprisingly, numerous politicians have been criticizing even this as too risky.

The Massachusetts Republican Party has come out on the side of individual liberty on this issue. On May 26, they and numerous supporters sent a letter to Gov. Baker urging him to stay the course on re-opening the state. The letter reads in part:

By now, it should be clear: the shutdown of private businesses, large and small, has given the Democratic Party — the party of government overreach — a political boost. This disastrous pandemic has led to unconstitutional decrees being set in stone almost overnight, creating what is unquestionably a dream scenario for the Democrats — stifle independence, entrepreneurship, and personal responsibility, and you create a world dependent upon the state.

We write to you today to urge you to push back, publicly, on the Democrats’ demands to keep Massachusetts shuttered.

We write to you today to remind you that the most regulated businesses in the Commonwealth, our nursing homes, also happen to account for more than 61 percent of all COVID-19-related deaths.

We write to you today to convey the frustrations of small business owners, who have had to padlock their doors while their big-box competitors across the street are allowed to remain open. We write to you today to remind you that the Massachusetts business community lives and breathes on the ambitions, creativity, and dreams of its residents, but will die a painful death if it succumbs to the whims of an unelected bureaucracy. These business owners realize the importance of maintaining a hygienic environment — if the public does not trust them and their products, no amount of government intervention will keep them afloat….

Democrats like to talk about fatalities associated with this virus, but still unknown yet just as tragic are the deaths that will occur due to alcoholism, drug use, and suicide, all of which will be on the increase as long as residents are forced to lock themselves away.
 
Ten weeks of lockdowns have been enough. We’ve flattened the curve, prevented our hospitals from being overwhelmed, and sacrificed our liberties. We’ve watched as a hyper-partisan media has misfired on their forecasts of doom.

The full letter can be read here.

Additionally, the MassGOP issued a statement against a letter by 91 economists calling for – it makes me sick to even write this – new taxes to cover any budget shortfall resulting from the pandemic and associated shutdown. “Incredibly, these economists are calling for an income tax increase at the absolute worst possible time, when mandated business shutdowns have people struggling to make any income at all,” said MassGOP chairman Jim Lyons. I couldn’t have said it any better.

The MassGOP also has a petition to re-open the state, which can be signed here.

bookmark_borderStudent loans and bad analogies

Posted on by Marissa

Another post that I began a long time ago but did not have time to finish until now…

A while ago, former speaker of the house Newt Gingrich tweeted, “If leftists want to forgive student debt shouldn’t they also propose giving back the money to everyone who worked hard and paid off their student loans?”

I agree with this sentiment 100%. Forgiving debt, as appealing as it may sound given the exorbitant cost of college and the crushing loans people incur in order to pay for it, poses significant fairness issues.

In regards to paying for college (or any expensive item, for that matter), there are essentially three different options:

  1. Someone could save up money and pay for college without taking out any loans.
  2. Someone could take out loans to pay for college.
  3. Someone could simply decide not to go to college.

Forgiving loans gives a benefit to people in category #2, but not to people in category #1 or category #3. It essentially gives free money to those who chose to pay for college through loans, while giving nothing to people who saved up for college or who opted out of college entirely.

In other words, forgiving loans is deciding to make something free after some people have already paid for it. If you are going to do this, fairness requires that you also refund the money for those who have already paid.

Various people in the twitterverse came up with snide responses to Newt’s tweet that on the surface sound witty and clever but actually don’t make sense.

First of al, several people personally attacked Gingrich for his sex life and the fact that he went through a divorce (imagine what the reaction on Twitter would be if someone attacked a female politician with this type of criticism), something that is not appropriate and has nothing to do with the issue of student loan forgiveness.

“Child labor laws… seems like a good idea, but have you thought about how frustrated all the kids who already lost limbs in the mill will feel??” tweeted @SamAdlerBell.

“Guys, look. We can cure cancer but what about everyone who already died from it? IDK seems unfair,” tweeted @sssh_sstrn

These analogies do not make sense. This is because saving up to pay for college – unlike losing a limb at work or dying of cancer – is something a person chooses to do.

For everyone in category #1 above, the option of borrowing money was available to them; they simply choose not to because, based on the rules in existence at the time, paying upfront made more financial sense. The decision to pay upfront for college is based on the presumption that if one took out loans, one would then be in debt and would eventually have to pay back the loans with interest, which would mean paying more in total. If people knew that student loans were going to be forgiven, no one in their right mind would pay for college; everyone would simply take out loans knowing that the loans would be forgiven and college would effectively be free. In other words, changing the rules so that loans are  forgiven makes it so that taking out loans actually would have made more financial sense, but there was no way for people to know this at the time. It is not OK to change rules after people have already made decisions based on the old rules.

My parents are an example of this. Ever since I was born, they gradually saved up money for college. Both of them worked at middle-class jobs and saved money every month. They were not poor, but they were not rich either. If the government announced that student debt was going to be forgiven, my parents and I would have legitimate reason to be upset. If they had known that there was no need to save for college, my parents would have had that much more discretionary income to spend. My family would have taken more vacations or bought a larger house or more clothes or toys. Perhaps one of my parents would have chosen not to work.

This simply does not apply to the situations claimed to be analogous by the people on Twitter. After workplace safety laws are passed, no worker thinks, “I wouldn’t have chosen to lose my limb had I known these workplace safety laws were going to be passed.” That would make absolutely no sense. Losing one’s limb is an accident; it is not something anyone chooses to do. Similarly, no one chooses to have cancer. So the anti-Newt tweeters are missing the point: student loan forgiveness is problematic because it changes the rules after people have already made decisions based on the old rules. The other situations have nothing to do with this.

Another Twitter user named @dave_petr wrote about his desire for future generations to have it better than he did and asserted that “selfless sacrifice is kinder.” But there is nothing kind about bestowing a benefit on some people while leaving out others who are equally deserving. People who have scrimped and saved to pay for college deserve kindness as well. They do not deserve to see other people receive the thing that they have scrimped and saved for, for free.

Either choose an amount of money (perhaps the cost of a typical college education, or the average amount of student debt per person) and give everyone that amount of money, or do nothing. Giving free money to some people and not others is unfair and morally wrong.

bookmark_borderBack pay for federal workers is an issue of fairness

Posted on by Marissa

Since the government shutdown (temporarily, at least) came to an end, Representative Ayanna Pressley introduced a bill – known as the Fair Compensation for Low-Wage Contractor Employees Act – which would provide back pay to  contract employees just like those who work directly for the federal government.

“This is about dignity, this is about fairness, this is about justice,” Pressley said.

I agree with this statement, but not in the way Pressley meant it. True fairness would be for none of the employees furloughed during the shutdown to receive back pay.

After all, during the five weeks the federal government was shut down, neither contract employees nor federal employees were working. For them to get paid as if they were working this entire time is not fair to all of the other workers across the country – in the private sector and for state and local governments – who were not affected by the shutdown. It is even less fair to the government employees, such as TSA agents and air traffic controllers, who were forced to work without pay during the shutdown. Nor is it fair to taxpayers for the government to take their hard-earned money and use it to pay people for work they did not perform.

Yes, it is inconvenient to suddenly be furloughed from work. For people who do not have savings in the bank, it can be difficult or impossible to pay bills. But there is no right to receive continuous employment and pay from the federal government. The government has every right to discontinue, either temporarily or permanently, any federal job(s). This is disappointing for the affected employees, but it is a risk that people assume when they work for the federal government. There is nothing unfair about  it.

Additionally, for people to temporarily or permanently lose their jobs is something that happens in the private sector all the time and is not treated as a tragedy but simply part of the economy. Every day, companies go out of business, lay off workers, cut their hours, or furlough them based on changing market conditions. The vast majority of time, newspapers do not run front page articles about the suffering faced by these workers and their families. Restaurants did not offer free meals to racetrack employees when it was announced that Suffolk Downs lost out on the casino license and was going to be closing. No one has suggested paying workers at the now-closed Necco plant for all the weeks they would be working had the factory remained open. But that’s exactly what is happening for federal employees. Being out of work is a hardship for anyone. Why should government workers be exempt?

Supporters of back pay say that government employees should be compensated for the wages that they missed out on. But giving people full pay for not working goes way beyond compensating them. It is the equivalent of giving them five extra weeks of paid vacation. It is a windfall, a boon, a reward, a huge extra benefit, delivered at taxpayers’ expense and denied to the federal employees forced to work without pay as well as to all other workers across the country. Furloughed government employees got to have five weeks of free time, which they could spend pursuing their hobbies, resting, exercising, or doing anything they wanted. True, they did not choose this free time and most would likely have preferred to continue working than to miss out on their paychecks. But this does not change the fact that to pay them for this time is completely unfair to everyone else who spent the time working.