Tomorrow is election day, and across the country states and localities are putting important questions directly to the voters – some of which will have a direct impact on businesses and the economy. Because off-year elections tend to have lower turnout, you can bet that interest groups with something at stake in these decisions will spend big to turn out their constituencies, and quite possibly reap a big return for each campaign-dollar spent. Here are a few of the most interesting questions voters will be deciding tomorrow:
Minimum Wage Hikes: Voters in New Jersey will vote on a constitutional amendment that will raise the state’s minimum wage from $7.25 per hour to $8.25 per hour, and index the minimum wage to increases in the cost of living thereafter. In a more extreme measure, voters in the city of SeaTac — a Seattle suburb and home to the Seattle-Tacoma International Airport — will decide on whether to raise its minimum wage to $15 per hour. According to the Seattle Times, advocates on both sides of the issue have spent more than $1 million, or $97 per voter, on this effort in a city with just 12,100 registered voters.
The minimum wage is one of the most debated and studied issues in all economics, and the literature on the subject is split as to whether minimum wage help the poor by increasing income or hurt those it is intended to help by reducing overall employment. Standard economic logic dictates that if you force businesses to pay their workers more, those firms will hire fewer people. But real-world examples of minimum wage increases have not always led to this result. Businesses sometimes simply adjust by training their workers to increase productivity or by raising prices. Washington State, however, already had the nation’s highest state-wide minimum wage of $9.19, and raising this to $15 per hour within SeaTac’s city limits would provide stark natural experiment for economists to study going forward.
Genetically Modified Foods: Washington State residence will also get to weigh in on the politically charged issue of mandated labeling for foods that contain genetically modified ingredients. Proponents of the measure say that consumers deserve to know what kinds of ingredients go into their food, while opponents argue that labeling will raise the cost of food and needlessly scare consumers from products that have been deemed safe by the Food and Drug Administration and the American Medical Association.
Casino Expansion: New York voters will get a chance to vote on whether to allow the construction of seven casinos, in addition to the five currently existing on Indian reservations in the state. Proponents of these measures argue that casino construction will lead to greater economic activity and increased tax revenues for state and local governments, while opponents are worried about the negative effects of gambling addiction.
For some supporters of the law it comes down to simply believing the government shouldn’t be involved in saying what businesses can and can’t operate, as long as they can find customers to support their operations. How successful these casinos will be if the measure passes, is another question altogether. As states across the country have begun to allow gambling, revenues in the industry are on the rise, though there are signs of that growth leveling off as the gambling market becomes increasingly saturated. Indeed, a TIME magazine story earlier this year investigated the effect casino-law liberalization is having on the gambling industry in Vegas, and found that visitors are spending less on the games there, likely because they have so many more opportunities to gamble closer to home.
Marijuana Taxes: Colorado, a state which recently legalized recreational use of marijuana, is turning to the ballot box to decide how heavily to tax the newly legal commodity. A ballot measure facing Colorado voters proposes slapping a 15% excise tax on sales of cannabis aimed at funding schools and an another 10% tax which would fund marijuana enforcement. 15% of the 10% tax would be kicked back to any local governments that allow recreational use of marijuana, creating an incentive for more liberal pot policy at the local level. Critics of the tax worry that it is too high and will encourage marijuana users to seek out the drug on the black market.