Ten Principles to Guide Public Policy

Ten Principles to Guide Public Policy

Changing the course of human history, this idea – that freedom is a natural right – inspired Americans to want to live their lives in liberty, while at the same time respecting the rights and property of others. Then in 1787, the Second Continental Congress further guaranteed these rights by adopting The Constitution of the United States of America, clearly differentiating the rights and obligations of both Government and its Citizens.

Under the guidance and direction of these two documents, America has become the model of prosperity for the world. It has fed, clothed and housed more people at higher standards of living than any society the world has ever known. All other forms of government have fallen by the wayside and America has become the destination of choice for the world’s citizens.

At the Montana Policy Institute, we use these two “settled truths,” our Declaration of Independence and United States Constitution, as the basis for researching and recommending prescriptions for today’s policy questions.

When we study an issue, we begin with the core assumption that private property and free market economies are superior to state ownership and central planning. This is not simply a superficial opinion; rather, it is now the standard-bearer among people who have their eyes and ears open and for whom reason, logic, facts, evidence, economics and experience mean something.

The “Ten Principles to Guide Public Policy” that follow are pillars in a growing movement among state-based think tanks to reinforce and reinvigorate the application of these two “settled truths” toward defining sound public policy. They are not the only pillars of a free economy, but they do comprise a pretty powerful package. If every cornerstone of every state building were emblazoned with these principles – and more importantly, if every legislator understood and attempted to be faithful to them – we’d be much stronger, much freer, more prosperous, and far better governed.

1. The legitimate power of government begins and ends with the people.

Government exists to serve the people, not vice versa. When government no longer serves the people, but rather becomes self perpetuating or only responsive to certain interests, then it has lost its legitimacy.

2. Government exists to protect rights, not to create them.

We should all be free to live our lives as we choose, so long as we respect others’ right to do the same. Government exists to ensure that we respect each others’ rights, not to create (or destroy) privileges that favor one interest group over another.

3. Free people are not equal, and equal people are not free.

Whether through nature or nurture, we all bring different skills, ambitions, ethics, even luck to the table. People who are free to use or ignore their individual strengths and weaknesses will inevitably see different individual results. Since we are all provided different strengths and weaknesses, we can only be made equal by forcefully holding some people back and artificially pushing others forward. Unequal outcomes, because they reward positive behaviors, are an essential feature of freedom, not a shortcoming.

4. Long term and cumulative consequences should be considered more carefully than short term benefits.

Too often we try to fix a current problem with long term solutions that inevitably hold long term or unintended negative consequences. We need to consider all times and all costs when debating public policy, not just immediate gratification.

5. Government has nothing to give anybody except what it first takes from somebody else.

Government does not create things, which is different than saying it does no good. The resources it uses, even for good, must be taken from the productive sector of our economy, and from people’s wallets. We should consider the fundamental fairness of taking from one person and giving to another when looking at policies that use the political process to create winners and losers.

6. A government that’s big enough to give you everything you want is big enough to take away everything you’ve got.

7. Nobody spend somebody else’s money as carefully as he spends his own.

8. One cannot claim as a right that which someone else must provide.

A true Right does not impose a duty on another person. Your right to life and property, for example, does not require anyone else to do anything except respect that right and not cause you harm. A “Right” that imposes a duty on another is actually a privilege granted either by force through government action or by charity through the person providing it.

9. What belongs to you, you tend to take care of; what belongs to no one (or everyone) tends to fall into disrepair (nobody washes a rental car).

10. Free people engaging in free enterprise, not the political allocation of wealth and opportunity, are the engines of economic prosperity.

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Teen Unemployment and The Minimum Wage Study (2012)

Click here for full study (PDF – 4MB)

By Glenn Oppel, MPI Policy Director

As the Great Recession persists, unemployment remains a key concern in Montana and the nation as a whole. Although the jobs situation in Montana is somewhat better than the national average, the unemployment rate for working-age teens (16-19) is historically very high. Moreover, fewer and fewer teens are actually entering the workforce.

Figures provided by the U.S. Census Bureau demonstrate that teen employment prospects are dismal:

• Between 2006 and 2011, the teenage unemployment rate in Montana almost doubled from 10.2% to 19.4%. The highest rate for that period was 24% in 2010.

• Montana teens with less than a high school education have seen their unemployment rate double from 10.4% in 2006 to 20.8% in 2011.

• The average hours worked per week for Montana teens fell from 12.1 to 8 hours – a decrease
of 34%.

• The percentage of Montana teenagers who have a job declined from 48.2% in 2006 to 36.6%
in 2011.

• From 2006 to 2011, teen employment share in all industries dropped from 6.3% to 4.2%; in leisure and hospitality from 18.9% to 13.9%; in retail trade from 10.2% to 5.2%; and for all other services from 4% to 1.6%.

A recent analysis of state-specific employment effects of the minimum wage finds that increases in the federal and state minimum wage rates have accelerated this trend. According to simulations run as part of this analysis, increases in the minimum wage from the base of $5.15 in 2006 to $7.35 in 2011 cost Montana teenagers 1,178 jobs . Teen jobless rates could get even worse as Montana’s minimum wage is adjusted annually to the Consumer Price Index (CPI) despite job market realities or unemployment trends. Montana’s 2012 minimum wage rate is currently $7.65 and will increase to $7.80 in 2013 if the CPI continues to hover at close to two percent.

Minimum wage proponents may see annual increases as “raises” to poorer workers. What they fail to realize is that minimum wage increases serve as a tax on employers that would otherwise employ more low or unskilled workers if not for higher labor costs. This is especially true for working-age teens as our issue brief will show. Policymakers in Washington, DC and Helena should consider the disproportionate impact that minimum wage increases have on our youth as they struggle to find their first job.

Press Release: Mandatory Wage Hikes Accelerate Montana Teen Unemployment

Press Release
8/3/2012
For Immediate Release
Contact:
Glenn Oppel
Montana Policy Institute
406-443-4205
Summary:
The Montana Policy Institute announces the release of updated research data on the unemployment effects of minimum wage increases on working-age teens in Montana. The unemployment rate for working-age teens has nearly doubled since 2006 and fewer are actually entering the workforce. Controlling for the job-killing effects of the recession, the research estimates that nearly 1,200 jobs were lost because of state minimum wage increases from 2005 to 2011. Unemployment rates for teens are likely to rise in coming years as the recession persists and the state minimum wage increases annually.
FOR IMMEDIATE RELEASE

Mandatory Wage Hikes Accelerate Montana Teen Unemployment

Contact:

Glenn Oppel, Policy Director

Montana Policy Institute

(406) 443-4205

Helena – A recently released study indicates that the state’s nearly 50% minimum wage hike since 2005 has resulted in about 1,200 fewer teen jobs, even after taking into account impacts of the recession.

The Montana Policy Institute released those findings in a study examining the effects of higher labor costs on low skilled workers in the state. The study controls for job losses due to the recession and finds that, as the minimum wage increases, employers are less likely to hire teen workers with fewer skills or lower education levels.

“Simple economics dictates that when the cost of something goes up, people will buy less of it,” according to Carl Graham, CEO of the Montana Policy Institute. “Mandatory increases in our state’s minimum wage hurt the very people, those who are just starting out or starting over, that we’re trying to help by reducing the overall number of jobs available.”

Teen employment in Montana is at historical highs. Census Bureau data shows an almost doubling from 10.2 percent in 2006 to 19.4 percent in 2011. Average weekly hours fell 34 percent, from 12.1 to 8 hours,during that same period. Not surprisingly, the percentage ofMontana teenagers employed also declined, from 48.2 percent in 2006 to 36.6 percent in 2011.

Montana’s minimum wage is currently $7.65 per hour, 12th highest in the nation, and one of just 10 that is indexed to inflation. Another increase to $7.80 is likely to go into effect in January, further increasing the costs of employing low skilled workers.

“The Montana Legislature does have options that will encourage employers to put teens to work by getting closer to the market wage,” emphasized Graham. “Ideally, they can repeal the expected state minimum wage of $7.80 starting in 2013 and default to the federal minimum of $7.25. If that’s not possible, they should at least suspend the inflation index that imposes annual increases even during periods of high unemployment.”

The full study is available at www.montanapolicy.org.

 

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The Montana Policy Institute is an independent, nonprofit policy research center based in Bozeman.  It provides analysis and information to encourage individual freedom, personal responsiblity, and free markets in Montana.

Montana Policy Institute
67 W Kagy Blvd, Ste. B
Bozeman, MT 59715
406-219-0508
MPI is a Montana tax exempt corporation operated exclusively for the public benefit.  No substantial part of the activities of the Institute are used for the carrying on of propaganda or otherwise attempting to influence legislation, promote any political campaign, or on behalf of or in opposition to any candidate for public office.