The Ongoing Quest For Perfect Fairness And Justice, Fair Housing Edition

If you are a progressive, then you believe that perfect fairness and justice in human affairs can be achieved by empowering neutral, apolitical government "experts" to impose just the right recipe of handouts plus millions of pages of rules and regulations.  And Presto! all becomes utopia.  Or at least we'll die trying.  Of course a few cranks like the Manhattan Contrarian keep pointing out that the places that adopt the biggest collection of these progressive policies somehow seem to have the very highest income inequality measures of anywhere in the country.  Well, it can't be our fault.  It must be that it would have been even worse if we hadn't tried these programs.

So how do some of these efforts play out in the real world?  A Supreme Court case from the just-released end-of-term collection gives us a glimpse into the attempt to achieve perfect fairness and justice through housing subsidies and "fair housing" policy.  The case is called Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc.

It seems that the federal government made available to the Texas housing agency certain tax credits to be used to incentivize development of subsidized housing for low income people.  The Texas housing agency allocated most of these credits to developments in low-income neighborhoods, using the logic that building in those places was less expensive, and so more units could be built than if the credits were allocated to developments in more expensive areas.  Naturally this practice got the agency sued by the activists from Inclusive Communities Project, who alleged that allocating the credits to low income areas discriminated against minorities by reason of having a "disparate impact" of further concentrating them in poor areas where their chances of getting ahead in life would be limited.   The legal question for the Supremes was whether such "disparate impact" claims are cognizable as illegal discrimination, or if not whether the case should be dismissed.

The Supremes held that the claim is legally cognizable.  Beyond that, the Court just remanded back to the court below, so it remains to be seen whether the plaintiffs can prove the disparate impact claim, and if they can, what remedy might be ordered.  As in nearly every case these days involving a liberal/conservative ideological divide, the four "liberal" justices voted as a bloc.  In this case they got Justice Kennedy to go along for a 5-4 majority.  The remaining four conservatives dissented, with Thomas and Alito writing separately.

Most of the case, and of Thomas's dissent, is about whether the language of the statute can support a claim based only on "disparate impact," absent any assertion or proof of discriminatory intent.  Suffice it to say that the language of the statute in question (Fair Housing Act) would seem to preclude finding discrimination without intent.  However, we all now know (not just from this case) that the new cardinal rule of statutory interpretation is that no matter what a statute might say in its mere words, it means what a majority of the Harvard Law School faculty and New York Times editorial board think it ought to mean in furtherance of the creation of the progressive utopia.  So no problem, the intent requirement can be done away with.

But Justice Alito goes farther in his dissent, and asks the question of where the progressive project is actually going with this one:

The Texas Department of Housing and Community Affairs (the Department) has only so many tax credits to distribute. If it gives credits for housing in lower income areas, many families—including many minority families—will obtain better housing. . . .  But if the Department gives credits for housing in higher income areas, some of those families will be able to afford to move into more desirable neighborhoods. . . .  Either path, however, might trigger a disparate-impact suit.

This is not mere speculation. Here, one respondent has sued the Department for not allocating enough credits to higher income areas. See Brief for Respondent Inclusive Communities Project, Inc., 23. But another respondent argues that giving credits to wealthy neighborhoods violates "the moral imperative to improve the substandard and inadequate affordable housing in many of our inner cities." Reply Brief for Respondent Frazier Revitalization Inc. 1. This latter argument has special force because a city can build more housing where property is least expensive, thus benefiting more people. In fact, federal law often favors projects that revitalize low-income communities. See ante, at 2.

No matter what the Department decides, one of these respondents will be able to bring a disparate-impact case. And if the Department opts to compromise by dividing the credits, both respondents might be able to sue. Congress surely did not mean to put local governments in such a position.

Me?  I say, it's outrageous that the Texas housing agency would provide housing to low income people in Texas at all.  What a backwater!  Each low income person from Texas should have a penthouse on Park Avenue here in Manhattan!  What -- why is that a problem?  Doesn't the government have an infinite credit card? 

Does Hillary Clinton Have Any Understanding Of How An Economy Creates Wealth?

Even as I was writing yesterday's post about Bernie Sanders' destructive economic policy prescriptions, Madame Hillary was down in my neighborhood at the New School (Motto: "Where Marxists went when they fled from the Nazis") giving her own major address on economic issues.  Prior to this she's been more or less mum on this subject, but now we at least have something in writing to look at.  Does she have any idea what she is talking about?

As I said yesterday, Hillary definitely tries her best to stick to gauzy generalities, and to avoid specifics.  I will make life more fair!  You deserve to be paid more!  The greedy corporations and banks are taking all the money!  Still, there's plenty here to definitively prove that this woman has absolutely no idea how an economy creates wealth.  In fact, there's plenty here to conclude that she can't do basic arithmetic.

But before getting into the details of the speech, let me remind you of Hillary's prior big foray into economic policy.  I'm talking of course about her efforts as Secretary of State and then with the Clinton Foundation to provide aid intended to raise hundreds of thousands of Haitians out of poverty in the aftermath of the 2010 earthquake.  Her signature initiative is the Caracol industrial park in Northern Haiti, supposedly to provide some 60,000 jobs.  Here is a link to the blurb on the Clinton Foundation website boasting about their role in the project.  Here is a picture of Hillary leading the photo op contingent at the official opening in 2012.

The project is a complete and unmitigated disaster.  Three years later, with at least $70 million committed by aid organizations, the project has been completely stalled by corruption and obstructionism of the Haiti government.  Here is a link to my prior coverage.  More generally, tens of billions in aid to Haiti have gone into a complete black hole, and the country is as poor as ever.  Don't you and Bill have some ownership of this?

Memo to Hillary: all wealth is created by the private sector in the presence of private property rights and the rule of law.  Does Hillary know this at all?  Well, her Foundation web site still touts her involvement in Caracol.  Draw your own conclusions.

Now to the speech.  Here's a transcript.  I'll take some key quotes and follow with pithy comments.

Wages need to rise to keep up with costs.  Paychecks need to grow.  Families who work hard and do their part deserve to get ahead and stay ahead.  The defining economic challenge of our time is clear:  We must raise incomes for hard-working Americans so they can afford a middle-class life.

"Wages need to rise"?  That's nice.  What exactly do you plan to do about it?  There's precisely one thing that will work, which is to create a good business climate and let the people get to work on creating their own wealth.  Is it possible that Hillary will stand back and not meddle?  "We must raise incomes for hard-working Americans . . . ."  She views it as the job of the government, "we," the great and the good, to provide for the unwashed.  How's that working out in Haiti?

And really there’s no excuse not to make greater investments in cleaner, renewable energy right now. Our economy obviously runs on energy. And the time has come to make America the world’s clean energy superpower.  I advocate that because these investments will create millions of jobs, save us money in the long run, and help us meet the threats of climate change.

Really, if you don't know that government subsidization of more expensive energy to replace cheaper energy is wealth destruction, how can you possibly even remotely be considered qualified to be President of the United States?  Have you noticed that both Australia and the UK have announced just within the past few days that they are getting out of subsidizing the wind power business because of the unjustifiable costs?  Do you know that California has managed to raise its electricity prices by about 30% over the rest of the U.S., and Germany to double the U.S. average, by forcing consumers to pay for these "renewable" energy schemes?  Think about this Hillary:  doubling electricity prices is the same thing as a huge wage cut for Americans.

And while we're talking about huge wage cuts, try this:

You know last year while I was at the hospital here in Manhattan waiting for little Charlotte to make her grand entrance, one of the nurses said, “Thank you for fighting for paid leave.” And we began to talk about it. She sees first-hand what it means for herself and her colleagues as well as for the working parents that she helps take care of. . . .  Fair pay and fair scheduling, paid family leave and earned sick days, child care are essential to our competitiveness and growth.  

Paid leave!  Fair scheduling! Earned sick days!  Child care!  Hillary, don't you know that all of those things are going to come straight out of wages?  These things are just totally inconsistent with the idea of encouraging employers to pay higher wages.  It's one or the other.  This is why I think that Hillary does not have the ability to do basic arithmetic.

Or is the plan to raise wages by a big government redistribution program?  Well, I have news for you on that one too:  In any massive government redistribution program that includes most everybody, the middle class is going to be on the paying end, not the receiving end.  Without hitting the middle class to pay, there's not enough money to make a big redistribution go.  Sorry.

Shall we turn to her prescriptions for the financial industry?  Try this:

Too many of our financial institutions are too complex and too risky. . . .  We also have to go beyond Dodd-Frank. . . .  I will offer plans to rein in excessive risks on Wall Street. . . . 

I like that "go beyond Dodd-Frank."  Wasn't Dodd-Frank the "plan to rein in excessive risks on Wall Street"?  I have a copy of Dodd-Frank here on my desk, and it's about 2000 pages long.  You mean they left something out?  I'll bet you can't name it!  As far as I know, Dodd-Frank is the main driver behind all the little banks disappearing and our getting left with a handful of gigantic behemoths.  Since when can a community bank afford a compliance staff of 400 lawyers?  With your new crop of say 200,000 pages of regulations, they'll need 1000 lawyers per bank to try to comply.  That'll teach 'em!

I could go on.  As I said, it's mostly generalities, but there's plenty here to conclude that she has absolutely no idea what she's doing in this area.  But I guess we already knew that.  

The Socialist Delusion Is Alive And Well In The Democratic Party

If you look into world economic statistics even minimally, the first thing you notice is the remarkable correlation between economic freedom and economic success.  The Heritage Foundation puts out an annual ranking of all countries in the world by economic freedom.   The number of countries ranked is 178.  I'm sure there's plenty to question in their methodology, but it would just be quibbling.  There really isn't much to argue about over whether the likes of the likes of Hong Kong, Singapore, New Zealand, Australia and Switzerland belong at the top in economic freedom (or at least somewhere close) while Zimbabwe, Venezuela, Cuba and North Korea belong at the bottom.  Should Haiti really be ranked as high as 151?    That seems rather generous to me, but then there's not a lot of difference between number 150 and number 170.

And the more free the country, the greater the economic success.  The correlation is not perfect, of course.  But Singapore, Switzerland and Australia are now all ahead of the United States in GDP per capita in all rankings.  Meanwhile, Zimbabwe and Venezuela are collapsing, and for Cuba and North Korea, it's hard even to figure out if they have an economy at all.  Over at Econlib, economist Scott Sumner points out that every country except one with an IMF PPP per capita GDP over $25,000 has a Heritage Foundation economic freedom index in the top half of the 178 countries.  Can you guess the one?  It's Greece!  Greece is way down at number 130 in economic freedom.  The government meddles everywhere in the economy, and the labor markets are tied up in knots.  Sorry, but that $25,000 GDP per capita is very likely to prove to have been an illusion -- some combination of the spending of other people's money and fallacious counting of unproductive government spending at 100 cents on the dollar in GDP.  Greece's GDP is projected to decline by something like 7% this year.  Actually, that "decline" probably mostly results from correcting the previously-inflated measurement to something closer to the level the economy was at all along. 

And then there was the Soviet Union.  OK, its collapse was 24 years ago.  Have we all forgotten?

I ask because out there on the campaign trail, Democratic presidential candidate Bernie Sanders is drawing big crowds and rising rapidly in the polls.  Jim Tankersley in today's Washington Post points out that Sanders not only embraces the term "socialist," but also has expressed complete willingness to give up economic growth in favor of income redistribution:

[Sanders is] saying that America’s leaders shouldn’t worry so much about economic growth if that growth serves to enrich only the wealthiest Americans.  “Our economic goals have to be redistributing a significant amount of [wealth] back from the top 1 percent,” Sanders said in a recent interview, even if that redistribution slows the economy overall.  “Unchecked growth – especially when 99 percent of all new income goes to the top 1 percent – is absurd,” he said.

The Sanders economic program calls for increased government spending and programs without any recognition of capacity or limits.

• Increase federal spending by $1 trillion to "support 13 million jobs"!
• Affordable child care!  Paid family leave!
• Expand Social Security!
• Expand Medicare and Medicaid!  (They're headed for a crash?  Raise taxes!)
• Government pays for all healthcare!
• $15 minimum wage!  (How has a high minimum wage worked out for Puerto Rico?)
• Free college for all!
• Protectionism to help retain manufacturing jobs!
• Higher taxes!  Still higher taxes!

Does the idea occur to Bernie or his followers that it is possible to kill the goose that laid the golden egg?  For those willing to look, there actually are examples of countries that fell back from relatively rich to lower middle income (Argentina, Greece), and from middle income back to poor (Venezuela).  And the route there is always the same.  It's the route advocated by Sanders.

And by the way, how different is the route advocated by Hillary Clinton?  As far as I can see, the difference between the two is that Sanders is willing to advocate specific proposals, while Hillary sticks to vague generalities.  

How I Know That The Paris Climate Meetings Won't Accomplish Anything

The big U.N. climate meeting to end all climate meetings is set for November 30 to December 11 in Paris.  It's only July, and already the pre-meetings to the pre-meetings to the big meeting are getting into swing.  President Obama talks endlessly about saving the planet.  You can almost feel the excitement among the greenies.  Finally the rich world is to be cleansed of the sin of industrial civilization and fossil fuel burning!

Don't worry.  This thing is going nowhere.  Sure lots of people are still keeping up their game faces, but the program is falling apart everywhere you turn.  Time to start looking at what people are doing instead of what they are saying.

Take the U.K.  PM David Cameron has always talked a "green" game.  In the real world his party just won full control of Parliament and has dumped its former Lib/Dem partners, one of whom was the minister of the Department of Energy and Climate Change.  Now with the Tories fully in charge they are actually starting to look at the costs.  From the Telegraph of July 5:

The cost of subsidising new wind farms is spiralling out of control, government sources have privately warned. Officials admitted that so-called "green" energy schemes will require a staggering £9 billion a year in subsidies – paid for by customers – by 2020. The Chancellor believes the figures demonstrate the need to rein in the cost of policies to tackle climate change. 

Germany?  The so-called Energiewende ("energy transition") has already cost over 100 billion euros and approximately doubled electricity prices, while getting the percent of their electricity derived from wind and solar all the way up to about 16%; but electricity is only about half of their energy consumption (the rest being heat and transportation), so wind and solar have only reached about 8% of overall energy consumption.  A new study from consultants Roland Berger, reported in Frankfurter Allgemeine Zeitung on July 1, estimates that meeting current "politically-demanded" renewable targets will require another 280 billion euros: 
The German energy transition has cost more than 100 billion euros so far. It has hit large and small electricity suppliers with force and put traditional business models in question. But 15 years after the start of the transition of the power sector with the aim of renewable, low-carbon generation, experts are asking themselves an anxious question: is the energy transition running out of money?

I guess that means that electricity prices will be doubling again, or maybe tripling.  Is that OK with, say, the lower middle class over there, soon to be cast into energy poverty?

How about India?  They have several hundred million people who still don't have electricity at all.  Can those poor people now get access to it?  From Anil Swarup, permanent secretary of the coal ministry, quoted in the Guardian on May 27:

“We are looking to double Indian coal production by 2020,” Swarup said, “and to reduce reliance on imports.” Beyond that date, he said production would continue to rise to 1.5bn tonnes a year, with most of this being burnt in coal-fired power plants. In the past six months, the government has given environmental clearance to 41 new mining projects. The consequence, Swarup said, is that from now until 2020, “a new mine will be opened every month. You have to work on the assumption of requirement, and in India, there is a need for power.”

Or try this from Prakash Javadekar, the cabinet minister in the new Modi government responsible for the environment and climate (among other things), quoted in the same Guardian article:

“Our emissions will grow because we are not developed and we have a right, every person on this Earth has a right, to develop. If today the world is 0.8C warmer [than it was in pre-industrial times], it is not my fault. It is the historical responsibility of those who started emitting with the industrial revolution.”

Here in the U.S., the media outfit most known for endlessly promoting the climate scare and other left-wing political causes is undoubtedly NBC.  For example here on February 24:

The experts said heading off a food crisis will require changes in every aspect of production and consumption.

NBC's "experts" include famous doom-monger Paul Ehrlich, who is quoted as saying "we may have [only] 10 or 20" years to stop using fossil fuels to solve the climate crisis.  Well, that's NBC's left hand.  With the right hand, they've just started a ten year partnership with --- NASCAR!!  Otherwise known as the most over-the-top blowout completely unnecessary just-for-the-fun-of-it mega-consumption of fossil fuels ever conceived.  Won't that 10-year partnership take us right up to the edge of Ehrlich's window of doom?

But actually, even that can't top our President, Barack Obama.  You may recall that back in April on Earth Day the President flew down to Florida on Air Force One to give a speech hectoring everybody else to use less carbon.  While there his spokesman Josh Earnest then had to field this question from Mark Knoller of CBS:

On the Everglades trip, does the President risk undermining his message when he flies to the Everglades hundreds of miles on a 747 to make a statement about climate change?

(The short version of Earnest's answer was "no."  What else was he going to say?)  But what Knoller's question didn't even mention, of course, was that the President doesn't actually ever go anywhere with just one 747.  Air Force One is actually two 747s, the second of which is never more than 30 minutes away.  You know, just in case.  Each uses about 5 gallons of fuel per mile flown, and costs over $200,000 per hour of operation.  Do you think that might be a little excessive?  Actually, the government, under the direction of our President, is in the process of getting replacements for the two Air Force Ones, which of course will be larger and far more expensive.  The old ones are mere 747-200Bs, with about 4000 square feet of space each.  The new ones are to be 747-8s with more like 4,786 square feet.   The list price of the planes -- before upgrades for the President, which undoubtedly will be extensive -- is $367 million each.  Did I mention that they are talking about getting three of them, instead of the current two?  I can't find anywhere where they say whether all three will now be going around everywhere with the President.  But hey, why not?  For the President, all excess, no matter how wild, is normal.

This is the guy who supposedly is going to talk India into not building any more coal power plants and keeping hundreds of millions of people in abject poverty?  As I said, this Paris thing is going nowhere.  

What Do Greece, Puerto Rico, Detroit and Baltimore Have In Common?

Consider four disparate government jurisdictions:  Greece, Puerto Rico, Detroit and Baltimore.  Mostly what you've read recently about these places is that they have high government spending and unsustainable debt, supposedly incurred in the effort of the government to achieve some combination of helping the people, growing the economy, and creating greater fairness.  What you've probably read much less of is how the overspending and run up of debt play out in the realm of real economic performance.  

When you look at the statistics, what stands out dramatically in case after case is the association of too much spending and debt with high levels of idleness and unemployment, particularly among younger people.  Is it cause and effect?  You be the judge!

Greece is of course the European champion of profligate spending and exploding debt.  According to statistics at Eurostat here, government spending in Greece exceeded 50% of GDP continuously from 2008, and even broke 60% in 2013.  Add in a tax system famous for extreme levels of avoidance, and you get extraordinary deficits.  According to Trading Economics here, Greece's government budget deficits averaged 7.19% of GDP from 1995 to 2014, with peaks of 15.7% of GDP in 2010 and 12.3% in 2014.  (Supposedly the Greek government budget is now in surplus.  Do you believe it?)

If you think that those huge levels of economic "stimulus" must have really put people to work in Greece, the statistics sure don't show it.  According to World Bank numbers here, the labor force participation rate in Greece is just 53%.   That compares to 63% in the U.S., 62% in the U.K., 60% in Germany, and 56% in France.  (Do you notice a correlation there with government spending levels?)  But unemployment, and even more so youth unemployment, are where it really gets ugly. The latest numbers from Eurostat give Greek unemployment at 25.6%, and youth unemployment (ages 15 - 24) at an extraordinary 49.7%.  (The comparable numbers for the U.S. are 5.5% and 12.2%.)  And don't get the idea that these low labor force participation and high unemployment rates are somehow a consequence of the recent "austerity."  Greek labor force participation was the same 53% back in 2000 and even lower at 51% in 1995, even as it engaged in the usual Keynesian deficit spending prescriptions.  According to statistics here from indexMundi, Greek youth unemployment has averaged over 25% since 1990, never below 22% and sometimes over 30%.

In Puerto Rico it's the same thing: high spending and extraordinary public debt accompanied by dramatic underutilization of the labor force.  Puerto Rico's public debt of about $72 billion hit the headlines a few days ago when its governor announced that the debt "is not payable."  The $72 billion, a little over $20,000 per capita, seems not that much worse than New York's (around $19,000 per capita), until you realize that median household income in New York is almost triple that in Puerto Rico.  But anyway, all that government spending in Puerto Rico must at least have put lots of people to work, right?  In fact, add to all the spending by Puerto Rico full access to U.S. welfare, food stamp, medicaid and other handout programs.  By standard Keynes/Krugman theory, its economy should be booming.  But actually, it's the opposite.  Puerto Rico has spectacularly low labor force participation rate of under 43%.  That's a full 10 points worse than Greece.  And even with 43% labor force participation, Puerto Rico still has 12.2% unemployment.  (If Puerto Rico had the same labor force participation, 63%, as the rest of the U.S., and the same level of employment, its unemployment rate would be close to 50%.)  Youth unemployment?  The latest figures I can find are World Bank figures from 2013, which give a rate of 27.3% for Puerto Rico; and again, that must be taken in context of the spectacularly low labor force participation.

And check out the usual suspects of "basket case" U.S. cities, and time and again you find the same thing: blowout spending and borrowing does not cause the economy to improve, but instead is accompanied by high levels of idleness.  In Detroit, a city that famously spent and borrowed its way into bankruptcy, the labor force participation rate for black males is 52.1% according to most recent BLS data (2011).  That's even worse than Greek levels.  Baltimore?  The overall BLS statistics for the Baltimore/Tyson metropolitan area do not seem at first blush to reflect the same levels of idleness.  For example, these BLS statistics for 2011 show black male labor force participation for that area as 65%.  But in the aftermath of the recent Baltimore riots, multiple sources have reported that in specific areas like the one where Freddy Gray lived, non-working rates for working age black males were in the range of 50%.  For example, see this op-ed in the New York Times by Michael Eric Dyson.   The areas with the lowest rates of working are the same area where so-called "anti-poverty" government spending is the highest.

So perhaps it is time to consider the hypothesis that the high spending and borrowing is actually the cause, or at least one of the causes, of the unemployment and idleness.  It's not just that the "anti-poverty" programs don't work.  It's also that the high spending and borrowing actively discourage business formations and relocations.  What entrepreneur wants to put his or her business in a place where massive public debt indicates a future of increasing taxes as far as the eye can see?

Puerto Rico: Here Comes The Next Greece

Even as Greece has shut its banks and its stock market and prepares for its big default, the next big sovereign default is coming right behind it.  I'm talking of course about Puerto Rico.  On Sunday the New York Times reported that Puerto Rico's governor, Alejandro Garcia Padilla, had said that Puerto Rico's debt of some $72 billion "is not payable."

You are probably thinking: but Puerto Rico is part of the United States!  It has the huge advantages of free trade and free travel with the United States.  It's in the U.S. dollar currency union.  How could it possibly be in such a position?

But if you start investigating Puerto Rico's economy, you find that it is far worse than you might have imagined.  Median household income is only about $20,000 (per badly lagged Census data here from 2014).  That compares to well over $50,000 for the United States as a whole, and about $36,000 for the poorest of the 50 states, Mississippi.

Completely free trade should gradually be bringing Puerto Rico up to the income levels of the rest of the country, but it is not happening.  Instead, it's income is stagnating, and indeed the population has been shrinking.

And then there is the most astounding statistic of all about Puerto Rico, the labor force participation rate -- the percentage of working age people either working or seeking work.  For the U.S. as a whole, that rate has recently been 62.8%, itself a significant decline from numbers around 67% prior to the recent financial crisis.  In Puerto Rico the figure is around 42%.  That means there is a full 20% of adults who would be working if they were in the rest of the United States, but are not working in Puerto Rico.   Knowing that, is it any wonder that the government is broke?

Now, in considering why this might be, I would invite you to entertain the hypothesis that the federal minimum wage might have something to do with it.  That minimum wage is only $7.25 per hour, far lower than numbers like $15 per hour that are gradually taking effect in places like San Francisco and Seattle, or than the $12 per hour that President Obama has discussed for the country as a whole.  But for Puerto Rico, $7.25 per hour for a year of full-time work represents a very high percentage of that median household income figure above -- assuming full time work of around 1900 hours per year, it's in the range of 70%.  By contrast, full time work for one person at the current federal minimum wage is only about 40% of median household income in Mississippi, and not much more than 25% for the country as a whole.  A $12 minimum wage would only bring the full-time minimum wage worker's annual pay to about 35% of median household income for the country as a whole.

I am not the only person noticing these dramatic numbers.  Here is what Max Ehrenfreund had to say in yesterday's Washington Post wonkblog:

While labor organizers around the country along with most major Democratic politicians have said the federal minimum wage is too low, it seems clearly too high in Puerto Rico, at 77 percent of per capita income. That puts a lot of people with less education and fewer skills out of consideration for a job.

Of course it is not possible to do fully controlled experiments to see what is causing economic performance to lag in one location versus another.  But it's hard to come up with an alternative hypothesis that explains Puerto Rico's dramatically low labor force participation.  The next best one is that federal benefits, like food stamps, are of much more relative value in poor Puerto Rico, and strongly discourage work.  Of course, those two factors could be working together.

If the minimum wage hypothesis is correct, it means that that law has put a huge contingent of low-education, low-skill workers out of work in Puerto Rico.  Intended to benefit the poor, it in fact has made huge numbers of them much poorer.  As to the $15 dollar minimums in rich coastal cities like San Francisco and Seattle, likely the effect will not be so large as to show up quite so dramatically in the government statistics.  But that doesn't mean that the effect will be zero.  And those who get hurt are of course the poorest of the poor.  Shouldn't they be the ones that public policy should most be seeking to benefit?