Thursday, March 26, 2015
Another Liberal Idea Backfires
In the latest, if not the best, example of why liberals should not be in charge of health care, national security, retirement, foreign policy, or anything else, a Rand Corporation study concluded that Los Angeles’ seven year ban on new fast food restaurants did nothing to reduce obesity in the predominately African-American community of South L.A. Last week, NBC nightly news, hosted by Savannah Guthrie, teased an upcoming segment about the Rand study in which she said: “One city takes an aggressive stand against obesity by banning new fast food restaurants, but what happened next might come as a shock.” Come as a shock to whom? It should have been obvious that a 2008 Los Angeles City ordinance banning, not limiting, but the outright banning of new fast food restaurants in Baldwin Hills, Leimert Park, and portions of South and Southeast Los Angeles would accomplish nothing. What’s really shocking is the number of jobs and the amount of tax revenue lost by the city as a result of this nanny, feel-good ordinance. African Americans suffer the highest rate of unemployment of any group. Instead of promoting economic activity where they live, the City Council chose to depress the economy on the guise of promoting weight loss to improve health, just as the “Great Recession” was taking hold. Let’s assume the ordinance had never been enacted, and just one of each of the following ten fast food chains established new restaurants in the four areas of the city targeted by the ordinance: McDonald’s, Burger King, Wendy’s, Carl’s Jr., KFC, Panda Express, In-N-Out Burgers, Taco Bell, Pollo Loco, and Jack-in-the-Box. That would create 40 additional businesses. According to an August, 2014 Forbes Magazine article by Carol Tice titled, “7 Fast-Food Restaurant Chains That Rake In $2M+ Per Store,” some of the companies I selected were mentioned. For simplicity, if each of the 40 new stores took in an average of $2 million dollars per year, that would equal $80,000,000 in sales per year. At L.A.’s nine percent sales tax rate, these restaurants would generate $7,200,000 in yearly tax revenue. In the seven years this ordinance has been in existence the city has lost $50,400,000 so far! In addition, think of the impact these restaurants would have made on local unemployment. At an average of 40 employees per restaurant, that would be 1,600 people off the unemployment rolls who would now have money to spend, generating additional tax revenue and economic activity. The increased property values of each of these restaurants would generate higher property tax revenues for Los Angeles County. Now, consider all the jobs created to build each of these 40 restaurants: carpenters, brick masons, concrete pourers, landscapers, electricians, surveyors, tile setters, etc. Also consider the manufacturing and production of the materials needed for these 40 restaurants: glass, tile, insulation, drywall, roofing, light bulbs, wiring, cable, speakers, microphones, ovens, stoves, grills, fans, heaters, toilets, sinks, railing, stainless steel counters, advertising, plastic utensils, napkins, plastic trays, trash receptacles, tables, chairs, soap, brooms, and mops. To prepare meals they need, hamburger meat, chicken, beef, rice, tortillas, lettuce, onions, tomatoes, soft drinks, coffee, ice cream, condiments, all of which need to be farmed, processed and then sold, generating more jobs and tax revenue. Ironically, new overweight employees working in fast pace restaurants would help with their weight loss, instead of standing in unemployment lines all day. When liberals don’t like something, they want it banned. Banning new fast food restaurants in one part of the city makes no sense if they can be found elsewhere. But, that’s what liberals do, and everyone suffers for it.