Via Suzy Khimm it looks like ailing Michigan Democrats are eying a set of sharply populist ballot initiatives as a way to bring their supporters out to the polls in 2010. Measures on the table include:
— Increasing the minimum wage to $10 an hour for all workers. — Imposing a blanket moratorium on home foreclosures for 12 months. — Cutting utility bills by 20 percent across the board. — Requiring all employers to providehealth care to employees and their dependents. — Increasing by $100 a week — and extending for six months — unemployment benefits, while expanding eligibility.
The unemployment thing is fine but where’s the money coming from? I’ll admit to not understanding how the utility bill idea would work or what the implications would be, but you can imagine this working in a sharply deflationary situation. But by the same token, with the Michigan unemployment rate at 15.4 percent and rising wages need to go down rather than up if people are going to find work and existing capital get profitably employed:
Employer mandates for health insurance are a frustrating perennial of the American political scene. If you want to do this, the right way to do it is to have a payroll tax and use the revenue to finance broad public provision of health insurance. But decades of successful conservative anti-tax rhetoric have created strong incentives to uncover ways of doing things that can be plausibly described as not a tax. Nevertheless, the fact remains that mandates of this sort are not going to increase the overall share of the economic pie going to compensation (this fluctuates within a very narrow range), it’ll just shift it around. But by doing it this way the incidence of the new tax will vary across firms for basically arbitrary reasons (which I suppose is part of the appeal as some firms will be able to disadvantage their competitors) and private health insurance companies will get an extra piece of the action.
That said, it’ll be interesting to see how well this works, politically. Pretty well would be my guess.