SOME ECONOMICS

High minimum wages create unemployment: "For the past decade, some of the least-skilled and lowest-paid workers in America have benefited from controversial programs known as living wage ordinances. Under these laws, companies with city contracts are forced to pay workers enough to live in that city, often $2 to $3 more than traditional minimum wage. But a new study shows the initiative as having mixed results in combating poverty. ... A 6 percent employment decline in cities that require a living wage, according to the study. Critics say it's no surprise that making companies pay higher wages results in their hiring fewer employees. 'They [the laws] don't work. They don't help the people that they are intended to help,' said Anthony Archie of the Pacific Research Institute. 'They're supposed to help low-skilled workers and they actually crowd them out from getting jobs.'"

Death tax bad for economy: "Permanently repealing the estate tax would save the government money in the long term and could produce 200,000 new jobs a year, according to a study released today that challenges the official congressional estimate that says the government would lose money. The study by the American Family Business Institute (AFBI) contends that congressional actuaries have continually underestimated how a cut in taxes increases economic activity and results in an increase in revenues collected by the government. The study says the Joint Committee on Taxation (JCT) wrongly claims repealing the estate tax would cost $140 billion in federal revenues. "The JCT is grossly overestimating the cost of repealing the death tax," said Dick Patten, executive director of the AFBI".

Finns doing well: "Fifteen years ago, Finland faced a full-scale depression, brought on by the loss of the country's most important markets as the Soviet Union disintegrated. Unemployment soared to 20 percent. But the Finns took control of their future, made painful adjustments and came out of the crisis with an economy that the World Economic Forum in Davos, Switzerland, ranks as the most competitive in the world.... A relatively backward agricultural country became a high-tech powerhouse with labor productivity as good or better than that in the United States, but also a welfare state as generous as any in Europe. Perhaps the most revealing statistic behind this transformation is Finland's commitment to research and development. The Finns put 3.5 percent of their domestic product into R&D last year, second in the world to Sweden (about 4.3 percent) and far ahead of the United States (about 2.6 percent) or the E.U. as a whole (less than 2 percent).... Finland steadily increased government spending on R&D throughout the 1990s, when all other spending was either cut or frozen... Funding from public institutions constitutes only about a third of R&D expenditures; the rest comes from businesses"

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