Posts tagged with: Tuition payments

starbucksWhen most people think of Starbucks they think of overpriced coffee, free wifi, and omnipresence. Starbucks are everywhere. The company was founded in 1971 and since 1987 they’ve opened an average of two new stores every day. In the U.S. alone there are 12,973 locations.

When most people think of “big business”, though, they don’t often think of the Seattle-based coffee company. But they should. Starbucks has 151,000 fulltime employees, $15 billion in annual revenues, and three times as many locations as Walmart. Starbucks is one of the biggest of big businesses. And, not surprisingly, a big proponent of cronyist policies.

Cronyism occurs when an individual or organization colludes with government officials to create legislation or regulations that give them forced benefits they could not have otherwise obtained voluntarily. Those benefits come at the expense of consumers, taxpayers, and everyone working hard to compete in the marketplace. A prime example is minimum wage laws. Almost without fail, big businesses tend to support higher minimum wages.

Since they could just choose to pay higher wages, why would they support federal mandated wage floors? One reason is because it helps to eliminate the competition from small business who don’t have the size and scale to absorb higher-than-market wage increases.

In a recent interview with CNN, Starbucks CEO Howard Schultz said he supports an increase to federal minimum wage even though he admits the $15 wage in Seattle could have “traumatic effects” on small business owners and employees.
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“When loans are guaranteed by the state and detached from market forces and personal responsibility,” says Dylan Pahman in this week’s Acton Commentary, “those institutions being paid with that loan money experience inflated demand as everyone and anyone now can go and wants to go college. As a result, tuition prices have been inflated. The full text of his essay follows. Subscribe to the free, weekly Acton News & Commentary and other publications here.

Federal Student Loans: A Problem of Subsidiarity

by Dylan Pahman

Ever see one of those used car ads that says, “Bad credit? Drive today!” The implication being that the dealer will happily arrange a loan regardless of the borrower’s credit history. For years now, the federal government has been running a similar scheme: “Poor student? Go to college anyway!” While this campaign has had better intentions behind it, it is no less of a problem. In the field of higher education, the federal government has usurped the roles of families, private organizations, and markets, with negative moral and economic consequences.
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