Disaster Tourism: California and Other Blue States Become Go-To Destinations for Econ Sightseers
jonathanturley
Below is my column in The Hill on how California, New York, Virginia, and other blue states are becoming textbook studies of the price of ignoring basic economics principles. Indeed, these states could become magnets for disaster tourism as economic students come to watch the market implode in real time.
Here is the column:
Jennifer Siebel Newsom, the “first partner” of California Gov. Gavin Newsom (D), is under fire for stating that she takes her children to conservative and Republican states so that they can see misogyny and racism firsthand.
Putting aside her hellscape phantasm, California may be a draw for a different group: curious economists in the mood for disaster tourism.
Just as people travel to Hawaii to see volcanic explosions in real time, they can visit California to see economic implosions. California is a laboratory for students to see what happens when you ignore basic economic principles outside of the classroom.
California is now the leader in the economic race to the bottom, as its politicians drain away what remains of decades of accumulated social capital, revenue and residents from their state.
Other blue states, including Washington and now also Virginia, are following suit, embracing disastrous policies such as soaring taxes, rent-controls and wage increases. The rise in minimum wages is a case in point. Democratic politicians from New York to California are pushing for a $30 minimum hourly wage for workers. Newsom, Los Angeles Mayor Karen Bass, and Democratic legislators in California herald their mandatory increases as providing a “living wage” for workers. In Los Angeles, a law requires hourly wages in the hotel and airport industries to rise by $2.50 each year until they reach $30 in 2028.
There is no question that workers are struggling with the high cost of living in California. But blindly raising taxes and minimum wages will exacerbate these problems, not eliminate them.
A recent report by researchers at the University of California-Santa Cruz found evidence of precisely what many economists had warned about in the state’s mandatory wage floors. Stephen Owen, an economics lecturer, explained that they found “a plethora of negative outcomes, such as higher menu prices for consumers, reductions in employee working hours, widespread elimination of overtime, and loss of benefits for employees.”
In other words, faced with mandated higher labor costs, businesses shrank their labor forces and raised their prices.
None of this is a surprise. Yet even amid such findings, Democrats are doubling down. They believe that because they claim to be the champions of the working class, it does not matter how many people they put out of work.
One line stood out in the report: “Further decreases in employee opportunities are being driven by automation, and the adoption of labor replacement technologies is accelerating.”
In my book, “Rage and the Republic,” I discussed not only the economic changes unfolding due to AI and robotics but also the expected political miscalculations that are most likely to fuel job losses and wasteful spending. Lo and behold, California is rapidly implementing those very policies.
We are facing one of the greatest job losses in our history. We have to act rationally and quickly to make the changes needed to prepare for this new economy. California is doing the opposite, accelerating those changes with self-destructive policies.
Newsom and his colleagues are actually providing additional incentives for struggling industries to adopt robotic and automated alternatives to human labor. The Hotel Association of Los Angeles recently commissioned a study that found hotels have eliminated or expect to eliminate 6 percent of positions in that city. That trend is expected to increase in the coming years.
The free market is responding to incentives. Companies are now developing and even selling kiosks for check-ins and robots designed to clean hotel rooms and serve in restaurants. Meanwhile, California is experiencing an exodus of wealthy taxpayers and businesses due to threats of wealth taxes and rising costs of everything from gas to construction.
Rather than work to reduce the cost of living and improve housing construction, California politicians are increasing taxes and mandating higher wages under the same tax-and-spend approach to economic development.
In New York, socialist Mayor Zohran Mamdani is promising a $30-per-hour wage. Employers would have the choice of $25 an hour if they provide qualifying benefits. But they also have other choices: reduce their labor forces or leave the state. Many businesses in both California and New York seem to be making those choices instead.
In both states, costs are also rising for consumers, making the situation even more dire for displaced workers.
The fact that Democrats are doubling down on these policies highlights the real problem. The failure of these economic policies tends only to increase demands from the same politicians for more market regulation.
Figures like Mamdani will only insist that others are preventing citizens from enjoying “the warmth of collectivism.” He recently admitted that he will not be able to provide the free buses he promised, at least not this year. He blames New York state’s refusal to let him raise taxes further in New York City.
Economist Milton Friedman said, “One of the great mistakes is to judge policies and programs by their intentions rather than their results.” The problem is that these policies are motivated by political rather than economic realities.
As workers lose hours and jobs thanks to mush-brained but well-intentioned policies, they find themselves even more dependent on government and the very politicians who caused the problems in the first place.
Beyond these politicians who find success in failure, the only group looking at a rosy future in California is the rising class of robotic workers.
Here is the column:
Jennifer Siebel Newsom, the “first partner” of California Gov. Gavin Newsom (D), is under fire for stating that she takes her children to conservative and Republican states so that they can see misogyny and racism firsthand.
Putting aside her hellscape phantasm, California may be a draw for a different group: curious economists in the mood for disaster tourism.
Just as people travel to Hawaii to see volcanic explosions in real time, they can visit California to see economic implosions. California is a laboratory for students to see what happens when you ignore basic economic principles outside of the classroom.
California is now the leader in the economic race to the bottom, as its politicians drain away what remains of decades of accumulated social capital, revenue and residents from their state.
Other blue states, including Washington and now also Virginia, are following suit, embracing disastrous policies such as soaring taxes, rent-controls and wage increases. The rise in minimum wages is a case in point. Democratic politicians from New York to California are pushing for a $30 minimum hourly wage for workers. Newsom, Los Angeles Mayor Karen Bass, and Democratic legislators in California herald their mandatory increases as providing a “living wage” for workers. In Los Angeles, a law requires hourly wages in the hotel and airport industries to rise by $2.50 each year until they reach $30 in 2028.
There is no question that workers are struggling with the high cost of living in California. But blindly raising taxes and minimum wages will exacerbate these problems, not eliminate them.
A recent report by researchers at the University of California-Santa Cruz found evidence of precisely what many economists had warned about in the state’s mandatory wage floors. Stephen Owen, an economics lecturer, explained that they found “a plethora of negative outcomes, such as higher menu prices for consumers, reductions in employee working hours, widespread elimination of overtime, and loss of benefits for employees.”
In other words, faced with mandated higher labor costs, businesses shrank their labor forces and raised their prices.
None of this is a surprise. Yet even amid such findings, Democrats are doubling down. They believe that because they claim to be the champions of the working class, it does not matter how many people they put out of work.
One line stood out in the report: “Further decreases in employee opportunities are being driven by automation, and the adoption of labor replacement technologies is accelerating.”
In my book, “Rage and the Republic,” I discussed not only the economic changes unfolding due to AI and robotics but also the expected political miscalculations that are most likely to fuel job losses and wasteful spending. Lo and behold, California is rapidly implementing those very policies.
We are facing one of the greatest job losses in our history. We have to act rationally and quickly to make the changes needed to prepare for this new economy. California is doing the opposite, accelerating those changes with self-destructive policies.
Newsom and his colleagues are actually providing additional incentives for struggling industries to adopt robotic and automated alternatives to human labor. The Hotel Association of Los Angeles recently commissioned a study that found hotels have eliminated or expect to eliminate 6 percent of positions in that city. That trend is expected to increase in the coming years.
The free market is responding to incentives. Companies are now developing and even selling kiosks for check-ins and robots designed to clean hotel rooms and serve in restaurants. Meanwhile, California is experiencing an exodus of wealthy taxpayers and businesses due to threats of wealth taxes and rising costs of everything from gas to construction.
Rather than work to reduce the cost of living and improve housing construction, California politicians are increasing taxes and mandating higher wages under the same tax-and-spend approach to economic development.
In New York, socialist Mayor Zohran Mamdani is promising a $30-per-hour wage. Employers would have the choice of $25 an hour if they provide qualifying benefits. But they also have other choices: reduce their labor forces or leave the state. Many businesses in both California and New York seem to be making those choices instead.
In both states, costs are also rising for consumers, making the situation even more dire for displaced workers.
The fact that Democrats are doubling down on these policies highlights the real problem. The failure of these economic policies tends only to increase demands from the same politicians for more market regulation.
Figures like Mamdani will only insist that others are preventing citizens from enjoying “the warmth of collectivism.” He recently admitted that he will not be able to provide the free buses he promised, at least not this year. He blames New York state’s refusal to let him raise taxes further in New York City.
Economist Milton Friedman said, “One of the great mistakes is to judge policies and programs by their intentions rather than their results.” The problem is that these policies are motivated by political rather than economic realities.
As workers lose hours and jobs thanks to mush-brained but well-intentioned policies, they find themselves even more dependent on government and the very politicians who caused the problems in the first place.
Beyond these politicians who find success in failure, the only group looking at a rosy future in California is the rising class of robotic workers.
Jonathan Turley is a law professor and the best-selling author of “Rage and the Republic: The Unfinished Story of the American Revolution.”