Interesting take on the issue of just why First World countries -- the wealthiest nations on earth -- have a relatively high number of what are for all intents and purposes Third World cities. Think New Orleans, Baltimore and Detroit -- my hometown -- to name just three in the U.S.
For Detroit, while the 1967 riots may have intensified the decline (the city had been losing population since the mid-1950s after peaking at 1.86 million in 1950), the author's contention is that scary-high tax burdens and regulations, combined with labor market restrictions (i.e. high rates of unionization) have cratered local economies.To be fair, the piece also discusses gun violence and high poverty rates, so it's not always about what government takes from you or prevents you from having.
"One of the most profound insights from Stansel’s paper is that moving from the 5th (least free) to the 4th quintile causes a drop in unemployment by 0.9%. Stansel’s index ranks Detroit number 345, Baltimore number 102, and New Orleans number 262 out of the 384 metropolitan areas examined.
Both Baltimore and Detroit make it into the top 5 cities with the highest tax burdens, according to the Office of Revenue Analysis. As for New Orleans, Louisianans face the third highest combined state and local sales taxes, as well as excessive levels of deficit spending. These three cities are also plagued by excessive and even bizarre occupational licensing laws. Louisiana licenses florists, Detroit licenses hair-braiders, and Maryland counties license fortune tellers. If only Maryland’s licensed fortune tellers could have predicted that big government would cause businesses to flee these cities.
As if these regulations and taxes weren’t enough, labor market restrictions have left job-seekers in Detroit and Maryland crippled. Both cities have unionization rates higher than the national average (10.7%), alongside minimum wages exceeding the federal $7.25 level.
Not unexpected, this has significantly increased unemployment, with Detroit and Maryland having unemployment rates of 8.1% and 6.1%. Admittedly, this is one area where New Orleans has excelled with a union membership rate of only 4.2% – although having the worst education rank in the nation has prevented wage growth."
Why First World Countries Have Third World Cities | Intellectual Takeout
"Politics is just show business for ugly people."
For Detroit, while the 1967 riots may have intensified the decline (the city had been losing population since the mid-1950s after peaking at 1.86 million in 1950), the author's contention is that scary-high tax burdens and regulations, combined with labor market restrictions (i.e. high rates of unionization) have cratered local economies.To be fair, the piece also discusses gun violence and high poverty rates, so it's not always about what government takes from you or prevents you from having.
"One of the most profound insights from Stansel’s paper is that moving from the 5th (least free) to the 4th quintile causes a drop in unemployment by 0.9%. Stansel’s index ranks Detroit number 345, Baltimore number 102, and New Orleans number 262 out of the 384 metropolitan areas examined.
Both Baltimore and Detroit make it into the top 5 cities with the highest tax burdens, according to the Office of Revenue Analysis. As for New Orleans, Louisianans face the third highest combined state and local sales taxes, as well as excessive levels of deficit spending. These three cities are also plagued by excessive and even bizarre occupational licensing laws. Louisiana licenses florists, Detroit licenses hair-braiders, and Maryland counties license fortune tellers. If only Maryland’s licensed fortune tellers could have predicted that big government would cause businesses to flee these cities.
As if these regulations and taxes weren’t enough, labor market restrictions have left job-seekers in Detroit and Maryland crippled. Both cities have unionization rates higher than the national average (10.7%), alongside minimum wages exceeding the federal $7.25 level.
Not unexpected, this has significantly increased unemployment, with Detroit and Maryland having unemployment rates of 8.1% and 6.1%. Admittedly, this is one area where New Orleans has excelled with a union membership rate of only 4.2% – although having the worst education rank in the nation has prevented wage growth."
Why First World Countries Have Third World Cities | Intellectual Takeout
"Politics is just show business for ugly people."