Government chases tail in pursuit of fiscal policy

Two stories on the same front page caught my eye this week. One, on the left side of the page, concerned a proposal Salt Lake Mayor Rocky Anderson is considering to require companies doing business with the city to pay their workers a so-called "living wage."

The other, on the right side of the page, was about how Utah's welfare recipients are being unwittingly transferred to a call center in India when they have questions about their electronic benefits cards.

These are really two sides of the same coin. Or, perhaps more accurately, they represent the logical equivalent of a dog chasing its tail around and around the public-policy circus.

The dizzying circle goes kind of like this: The economic recovery has so far failed to create a lot of new jobs. Cash-strapped governments are afraid to raise taxes, so they contract with call centers to save money. People get outraged because this "outsourcing" translates into fewer jobs locally for unskilled phone answerers. But if governments decided to use local call centers, that would create low-paying jobs, prompting activists to call for "living wage" laws that increase those salaries. That, in turn, would drive up taxes, which would make it harder for the economy to recover. It also would make it harder for private call centers to survive, forcing them to move overseas.

There is another branch to this, as well. Those who decry the lack of jobs for unskilled workers should examine whether they supported the recent push to create a do-not-call list for telemarketers. That list, recently upheld by the Supreme Court, has already cost jobs.

No, there is no such thing as a free lunch. And every government action has an equal and opposite reaction somewhere in society.

You won't hear that one on many ads this political season. Trusting in the free market can be a difficult exercise, particularly because no politician likely ever has been elected on a promise to do nothing.

Many people would agree that the thought of some young man in Mumbai helping a Utah welfare recipient get his or her benefits sounds like it's straight out of a Monty Python sketch, perhaps titled, "the department of ridiculous answers from people living far away." But would Utahns want to do as New Jersey has done and spend nearly $1 million to set up its own call center? Or would they want the state to do as Iowa did? It rejected the idea of sending calls overseas. Instead, Iowa now sends them to . . .Utah.