Richard J Grant

Published in The Tennessean , Sunday, March 31, 2013 and the full version at FORBES with archives . Richard J. Grant A reader writes, “The Center for Economic Policy and Research found that the minimum wage would be $21.72 an hour if it kept pace with increases in worker productivity.” Touting data from the same study, in a U.S. Senate committee hearing last week Sen. Elizabeth Warren (D., Mass.) noted that the current federal minimum wage of $7.25 falls short of the productivity indexed estimate of “about $22 an hour.” She asked, “What happened to the other $14.75? It sure didn’t go to the worker.” Sen. Warren’s question is absurd for the same reason that it would be wrong to assume that all senators share her economic illiteracy. Just as not all senators are equal, not all workers are equal. Each worker’s productivity level differs from others depending on attitudes, skill levels, and the types of tools available to the worker. Productivity is generally higher in...

Published in The Tennessean, Sunday, March 17, 2013 and the full version at  FORBES with archives. Richard J. Grant In how many states have the governors or legislators claimed that their state would be a net beneficiary of federal spending for Medicaid expansion? There are supporters of Medicaid expansion in all 50 states who do make such claims. But not everyone can be a net beneficiary of subsidization. When redistribution is the game, someone must be a net contributor. What becomes important here is that the burdens borne by such contributors are not necessarily relevant to the decision process. The question of whether Medicaid expansion brings net benefits to a state is a less-useful predictor of a state politician’s actions than is the expected effect of that expansion on the politician’s reelection chances. ... READ THE FULL ARTICLE Richard J. Grant is a Professor of Finance and Economics at Lipscomb University and a Senior Fellow at the Beacon Center of...

Published in The Tennessean , Sunday, March 3, 2013 and the full version at FORBES with archives . Richard J. Grant In the coming weeks, several state governors will attempt to increase low-income citizens’ access to medical services by expanding a state-federal program that, on average, pays doctors 40 percent less than private insurers pay. How wise is this? When you pay less, eventually you’ll discover that you are getting less. In the case of Medicaid programs, we found that out pretty quickly. Medicaid has created a class of medical consumers that do not have either the incentive or ability to consider the cost of the services they consume. As with any third-party payment system, which gives the illusion of someone else paying, patients tend to demand far more medical services than they would if they believed they could spend any savings on something else. In this regard, Medicaid works less well than food stamps. Whatever the flaws of the food stamp progr...