Why Policy Design Matters: An Account of Two St. Paul’s Controversies

0


There is seldom much enthusiasm for policy design, implementation and analysis, except perhaps among those of us who teach the subject. Yet recently, two policies have been at the center of major political controversies in Saint-Paul: the adoption of rent controls and the rollout in 2020 of the new minimum wage of $ 15 an hour in Saint-Paul.

The story of the two is how poor policy design often results in poor implementation, or conversely, how difficult it is to determine whether policies are actually effective and working as intended. The other story concerns how analysis should confront ethical questions about the design and impact of policies.

Policy design refers to how laws are made. It refers to the objectives of the laws, what one hopes to accomplish and why. Implementation is the application or administration of policies or their implementation. The analysis examines policies to see if they are effective or working as intended.

The supporters who drafted the proposed rent control ballot made many mistakes in the design of their policy. First, they instituted a postponement of the effective date of rent control if it were adopted. They should have foreseen that such a delay would cause landlords to increase rents, perhaps significantly, before its effective date. That is to say it happens now through Saint-Paul.

The article continues after the advertisement

Second, the proposal gave little thought to implementation. Scenario building is an important analytical tool. By that, we must always ask “What if? When designing policies. What happens if the policy is adopted, what will happen or what should be done next? The supporters of rent control in St. Paul failed to do so.

Advocates have apparently given little thought to who will enforce the law or the costs of implementation and enforcement, such as hiring municipal staff or prosecuting violators. But neither can City Council and Mayor Melvin Carter. Both knew last summer that the proposal was on the ballot and could be passed. There is no indication that either of them gave much thought to implementation if adopted. The mayor is particularly guilty, calling for the adoption of the rent framework but not preparing for his passage.

The second issue is the adoption of a minimum wage of $ 15 an hour in St. Paul which went into effect in 2020, with its full implementation for all businesses not occurring until 2027. Recently, the The Minneapolis Federal Reserve Board did a study on the impact of the law, finding that while it did not generally affect jobs in the city, it may have led to a loss of jobs in the hotel and restaurant industry. While the Federal Reserve did a good job studying the impact of the new minimum wage and qualifying its findings, it also made a few mistakes that affected its findings.

First, the study actually assumes that the Saint Paul Ordinance had an impact on wages and jobs. With such a slow introduction of the minimum wage, it’s hard to argue that over the past two years the ordinance itself has had a huge impact on wage increases. Other factors such as labor shortages and pre-existing trend lines regarding how wages were already raised by large employers raise questions as to whether it is market conditions or the law that led to salary increases.

Second, assuming the law has a real impact on wages, the Federal Reserve study is good in saying that it is difficult to disentangle the effects the pandemic and social arrest had on openings and business closures in general. But the report noted its possible negative impact on the restaurant and hospitality industries based on modeling that asked what would have happened in St. Paul relative to the rest of the state if the new salary minimum had not been adopted. Yet there are three possible problems with this model and this analysis.

David Schultz

First, this may attribute causality to the minimum wage law and its impact on wages and jobs, which, as noted above, is questionable. Second, according to his own analysis, the growth of wages and employment in St. Paul over time is volatile and erratic. It is possible that at this time, in the short term, the hotel and restaurant industry in St. Paul is in decline, again for reasons completely ignored or not taken into account by the model. , and for reasons that have little to do with minimum wage law. Finally, what should have been asked in the study is not just how many jobs were lost, but also at comparable periods in the past or in other cities at the same time, how many jobs were lost and gained.

The Federal Reserve’s report to its credit acknowledges that its report leaves many questions unanswered. The problem does not lie in its report but in the construction of a policy in a way in which we cannot really measure its impacts or take into account the anticipated variables that could affect its effectiveness. This is the story of both rent control and the minimum wage law: more pre-attention in the design of the policy could have facilitated its implementation and evaluation after adoption.

Finally, what is missing from the study on minimum wages and the discussion on rent control is something else that political analysis should address: the normative or ethical questions of politics. Media reports on Saint Paul’s Law have been overlooked as to how, overall, the increase in the minimum wage has not hurt employment in other industries. That’s good. But even if the increase in the minimum wage has resulted in job losses, is that acceptable given that it also increases wages for many? Similar questions can be asked about rent control. There are winners and losers, and a good policy analysis should partly assess the trade-offs.

David Schultz is professor of political science at Hamline University in St. Paul. His latest book is “Presidential States Swing: Why Only Ten Count.


Share.

About Author

Comments are closed.