Friday Roundup: Rural jobs, rent control, income inequality and Seattle’s soda tax

There are always a few items we’ve read during the week that deserve more attention but don’t make it into our regular posts. So we bundle them for the Friday roundup.

Here’s this week’s bundle:

The Lens: Employers support high-demand jobs bill

Washington state lawmakers heard from rural employers this week who support a pending proposal to support students to both earn degrees and succeed in high-demand job fields. Proponents say the bill is needed in areas of the state where there are more jobs than skilled workers.

HB 2177 would create the Rural County High Employer Demand Jobs Program to help students earn credentials in high-demand career fields and would provide eligible students tuition and fees equivalent to one year of full-time study at a Community and Technical College (CTC) in all counties except King, Pierce, Snohomish, Kitsap, Whatcom, Thurston, Clark, Benton and Spokane.

E21: Rent Control Raises Housing Costs

In their new National Bureau of Economic Research working paper, Stanford University researchers Rebecca Diamond, Tim McQuade, and Franklin Qian analyzed variations in the assignment of rent control due to the effects of a 1994 San Francisco ballot initiative. Multifamily housing built prior to 1980 was subject to the initiative’s rent control protections, while multifamily housing built after that was not…

Overall, affected landlords reduced their supply of available rental housing by 15 percent, and the number of renters living in affected buildings fell by 20 percent. These changes led to a city-wide rent increase of 5 percent. The higher rents have a present discounted cost of almost $3 billion for tenants, with 42 percent borne by future residents.

…The authors suggest that the substitution away from housing subject to rent control, and towards owner-occupied housing or new construction, “likely fueled the gentrification of San Francisco,” and that rent control policies have increased income inequality in the city overall.

American Enterprise Institute: Income inequality isn’t as bad as you may think

While some may have already hit the panic button on widening income inequality narratives, serious research has yet to credibly confirm this view. Instead, the increasingly more prevalent view is that measuring household incomes accurately, and studying income inequality trends, is fraught with problems. Perhaps, if we truly care about capturing household well-being, consumption may be a better measure of standards of living.

But I think the narrative needs to move beyond the static concept of income and consumption inequality to the more dynamic concept of economic mobility. Are low-income people today able to access opportunities to move up the income ladder?

E21: Seattle residents will outsmart its soda tax

One of the justifications for beverage taxes is that customers will respond to price changes by reducing consumption of taxed beverages. The mechanism here is straightforward: tax something to get less of it. If people were to substitute diet sodas or other, less-harmful beverages for sugared sodas, they would be healthier.

The City of Seattle denies that consumers respond to higher prices. On the city government’s website explaining the tax, the Finance & Administrative Services Department takes pains to mention explicitly that the “tax is not collected by the retailer nor is the tax burden intended to fall onto the consumer. The intent of the sweetened beverage tax is to tax the distributions of sweetened beverages into Seattle for retail sale in Seattle.”  

If the burden of the tax is supposed to completely bypass the consumer, as unlikely as that might be, what would drive them to substitute away from the unhealthy products that the government is taxing in the first place?