Shoup argues employer-provided parking is a transportation subsidy that contradicts the free market principles Cato advocates

Providing benefits on top of a salary is a contradiction of the free-market?

What an asinine statement, considering that free-market refers to the role of the government in the larger economy.

Now, subsidizing the parking spaces will typically result in over-consumption of them, but by that logic, salaries themselves distort the free market because people can then buy more goods than they otherwise would have.

by MPC on Oct 14, 2010 3:57 pm • link • report

RE: Income Gap

While education may be pointed at not assisting the lowest incomes with elevating themselves higher; from the photo/chart it instead seems that the gap increase is a result of increased wealth instead of necessarily increased impoverishment. The gentrifiction of large portions of the city over the past decade is, in my opinion, one of the primary causes for this. While that could be partly related to schools, I'd suggest there are numerous other factors potentially as valid & perhaps moreso.

by Bossi on Oct 14, 2010 4:12 pm • link • report

David & Eric: the Amtrak link is apparently a link to an admin portion of the site. Can't get to it.

by Eric on Oct 14, 2010 4:14 pm • link • report

Cato providing parking for its employees is not anti-free market, it's part of the total compensation package. It's an employee benefit. Your total compensation package is made of more things than just what is declared on your pay stub.

by ksu499 on Oct 14, 2010 4:28 pm • link • report

damn. I knew those black people didn't like paying their mortgages. Perhaps the hipsters can colonize PG county next.

The more you read Shoup, the more you realize what a bunch of fish-bones Shoupians are. He started with a useful insight (too much parking in cities) and is trying to build an edifice on top of it.

A more useful answer would be to tax parking benefits. Granted, that would mean employer-provided parking would be only for the rich, as they couldn't care about the marginal rates.

by charlie on Oct 14, 2010 4:31 pm • link • report

Cap Independence:

What they need to do is poll the time spent not at work.

How do they get around when shopping

How do they travel when visiting friends

How do they getting around when having fun

How do they get around when going to the doctor/hospital

If they have kids how do they get around when they are traveling to any of the above with family

by kk on Oct 14, 2010 4:39 pm • link • report

I mostly disagree with Shoup's opinion on this. If I were an employee of Cato and a non-driver, I would probably make a fuss out of it. But I'm not.

It's more like a dare. Shoup's saying "if you truly believe this, I dare you ..."

by Tim on Oct 14, 2010 4:43 pm • link • report

Is that graph adjusted for inflation.

(Because, if not, ouch.)

by andrew on Oct 14, 2010 4:51 pm • link • report

I've fixed the Amtrak link.

The Shoup explanation definitely oversimplifies his argument since it couldn't fit in a few lines any other way.

by David Alpert on Oct 14, 2010 4:59 pm • link • report

The poorest 20% of DC residents earn $12.36/hr or less while the richest 20% earn at least $38.95/hr.

And this differs from the rest of the country how?

by Tom Tomorrow on Oct 14, 2010 5:17 pm • link • report

andrew, the graph is in 2009 dollars.

Tom Tomorrow, DC's income gap is among the biggest in the nation. In other words, we're the rest of the county on steroids. The report is really fascinating in the disparities it uncovers.

by Eric Fidler on Oct 14, 2010 5:30 pm • link • report

@charlie I knew those black people didn't like paying their mortgages.

Is that meant to be funny?

by jcm on Oct 14, 2010 5:34 pm • link • report

@charlie, mpc

The other argument is that employers should not be able to give only free parking as a tax free benefit. Should be required to allow cash out or else the benefit is taxable.

by Michael Perkins on Oct 14, 2010 5:48 pm • link • report

That said, the best part of Shoup is to get the street prices right. Once you do that, you can reduce or eliminate minimums, and get out of the regulation business.

by Michael Perkins on Oct 14, 2010 5:50 pm • link • report

The other argument is that employers should not be able to give only free parking as a tax free benefit. Should be required to allow cash out or else the benefit is taxable.

Only if you allow me to cash out on my tax-free health insurance benefit.

by MPC on Oct 14, 2010 6:14 pm • link • report

Only if you allow me to cash out on my tax-free health insurance benefit.

My employer allows us to do this (I don't)

by Tina on Oct 14, 2010 6:45 pm • link • report

^that is "I don't cash it out"

by Tina on Oct 14, 2010 6:46 pm • link • report

@mpc: the government has an interest in not degrading the health of the insurance market. Allowing employees to select insurance or cash equivalent without an individual mandate would lead to adverse selection and an insurance market that is closer to failure. I think health insurance has positive externalities, so it is beneficial to encourage the purchase of health insurance generally.

On the other hand, driving involves high negative externalities, and at the very least the government should not be in the business of encouraging consumer choice toward those choices that have high externalities. At worst, the policy should be neutral, which is exactly what cash-out is.

by Michael Perkins on Oct 14, 2010 8:28 pm • link • report

I think the 'car independence in dc/commute mode share' numbers are only what they are -- they could mean something, but they don't necessarily mean something.

for instance, we have to compare apples to apples. portland, for instance, is about half as dense as either dc or baltimore. portland's land mass is over two times that of DC. what were the building blocks of each city? who planned them initially? how much is the initial planner responsible for the current incarnation of the city? what about geography, like rivers, oceans, mountains, etc. (i.e. 'natural constraints', like SF has)?

then, by 'good planning', we have to all be talking about the same thing. like, recently? 5 years worth? 30 years? 100 years?

and is building a high-speed train (like Metro) to move tens of thousands of commuters very large distances in relatively small amounts of time a good thing, or a bad thing? objectively, and without at least some context, it's very bad for sustainability, but if you're replacing car trips with train trips, then maybe it's OK or possibly even good-ish?

and there are other measures to consider, like what good planning has Portland done that might not show up on a stat sheet? like, declining funds for a highway, but then redirecting the cash to mass transit (a first, I believe)? and what advantages did Baltimore and DC have in terms of being East Coast/older cities, closer to centers of power?

by Peter Smith on Oct 14, 2010 8:29 pm • link • report

77% auto mode share here in LA. Seventy effing seven. DC, I'm ready to move home.

by Chris L on Oct 14, 2010 9:07 pm • link • report

@Michael Perkins

You know why health insurance is untaxed, right? I saw on your blog that you link to Mankiw, so I figure you're smart. So you know the answer dates back to the Depression.

For the record, I do realize that larger insurance pools bring down the costs, well, as long as the marginal health of the newest member is no worse than the aggregate of the group.

But, to get back to my point, why stop at health insurance. Currently there would be positive externalities if consumption went up (i.e. higher employment). Why not drop the tax on income as well...it would generate externalities after all.

by MPC on Oct 14, 2010 9:23 pm • link • report

I thought the answer was tied to war era price controls, and the inability of the northern California shipyards under kaiser to pay its workers more, so they came up with giving employees health care instead of the raises they would have without regulations.

I link to economists on both sides of the aisle. Mankiw as well as a taxing matter.

I think I disagree about externalities on dropping taxes because then we would either run deficits or have to cut spending.

I think you are not using externalities correctly, though I will have to think on it some more.

by Michael Perkins on Oct 14, 2010 9:35 pm • link • report

Yes, you are right. From the way I learned it, there were wage controls which resulted in wartime labor shortages, so compensation was simply transfered from wages to benefits.

by MPC on Oct 14, 2010 9:51 pm • link • report

"Car independence in DC: 50.4% of DC residents commute without an automobile.

And that's supposed to be a good thing? Over half of DC residents who don't have the transportation means to be part of the Greater Washington community? How sad ... We really need to do something about it!

by Lance on Oct 15, 2010 2:45 am • link • report

@mpc

http://pfr.sagepub.com/content/29/4/304.abstract

According to this paper as well as other resources I found, the other kinds of externalities that are reflected in prices are called pecuniary, and are necessary for functioning markets. So I'm no expert but it appears the consensus is that you don't need to try to counteract or promote them.

But the externalities like pollution or herd immunity that are unpriced, we should do something to discourage or encourage them through assignment of property rights (see Coase theorem) or pricing adjustments (taxes or subsidy or other pricing actions)

by Michael Perkins on Oct 15, 2010 8:16 am • link • report

Oh please, Lance. My wife and I are part of that 50.4% and we own a car and have the means to support its use comfortably. As do the large numbers of my neighbors who I see getting on the Metro in the morning. Is it so hard to believe that many of us choose the convenience of Metro/walking/biking/etc. over the hassle of dealing with a car?

by TimK on Oct 15, 2010 8:18 am • link • report

I _think_ Lance was trying to make a joke, though it can be hard to tell.

by davidj on Oct 15, 2010 8:25 am • link • report

I haven't tried to "balance" Shoup's equations the way Micheal has, but I'm not sure setting street parking price correctly is the way to go.

Shoup's street parking has two good qualities. First, pricing street parking -- as opposed to residential parking permits. Clearly, once you start pricing parking people will start to ration it. Beyond that, however, I don't find shoup helpful on WHAT price works or what is the optimal mix. Second, for reducing circling. I think he way overstates the problem -- double parked delivery trucks are more of problem in the city -- but it does exist and clearly having available parking (both street and underground) reduces that.

Mind you, I'm not for introducing more cars into the city. And regulating parking more is clearly a way to incenctize people not to drive. But reading the ACS report, what really matters is having a functional and working transit system -- and one that is more than moving poor people around.

by charlie on Oct 15, 2010 8:46 am • link • report

@davidj ... well ... kinda yeah ... and also I misread the posting ... thought it said that that percentage of folks were without a car ... I missed the 'commute' part ...

by Lance on Oct 15, 2010 9:23 am • link • report

I'm pretty sure Lance wasn't joking - he thoroughly believes that every person should be able to enjoy the freedom of the American traffic jam.

Just FYI, Lance, I took a look through the 2009 ACS and 35.2% of DC households don't have a car. 9.8% of households in the MSA don't have a car.

by MLD on Oct 15, 2010 9:51 am • link • report

My wife and I also share one car, but for commuting purposes, I take some combination of Circulator/metrobus/metrorail/CaBi (lots of flexibility in my routine)and she walks.

by Jacques on Oct 15, 2010 10:17 am • link • report

@MLD 35.2% of DC households don't have a car.

If you believe in a Greater Greater Washington, you need to be able to participate as an equal in all that the greater Washington area has to offer. And no matter how you cut it, if you don't have own an automobile, you're not really participating in all aspects/all areas of the greater Washington area ... And you're unfortunately only getting a 'mass transit'-perspective of what is out there to do to enjoy to participate in ... including employment opportunities and suburban friends you otherwise can see only rarely or out 'your' turf, which ends up being only a very very tiny percentage of all the land area around here when you can't easily get 'there'. And that is a bad thing.

by Lance on Oct 15, 2010 10:18 am • link • report

I am not sure I understand those mode share charts. The one you refer to says 50% non-auto. However, if you scroll down, there is a chart that says that 66% of workers commute by driving alone and an additional 10% carpool.

Can you explain these?

by beatbox on Oct 15, 2010 10:40 am • link • report

@beatbox; I think you are comparing the metro area to DC proper.

@lance; I agree with you -- but you are overstating the case. I do think lack of car ownership translates directly into a lack of metropolitan regional views. But should you own a car in DC -- really depends on your situation. Young people, single folks -- are they missing out on the diversity of the suburbs by not having a car -- absolutely. Do they care -- probably not. It's always more popular to be cool than hip, and fairfax ain't cool. ever.

Would more car ownership help out with the 30% unemployment? A bit. There are a lot of other factors -- economy, education, location, etc. that are driving that.

Own a car. Use it less.

by charlie on Oct 15, 2010 10:52 am • link • report

@beatbox

The first number is only the District of Columbia. The second number is the entire Washington Metro area (the MSA). The MSA is huge:

http://en.wikipedia.org/wiki/File:Dc22counties.jpg

by Alex B. on Oct 15, 2010 10:52 am • link • report

@mpc @michael perkins - I know opting out of med benefits is legal b/c my employer offers this option.

by Tina on Oct 15, 2010 12:05 pm • link • report

@Tina

Your employer allows you to opt-out of medical benefits AND then pays you the money they would have spent on your benefits?

by MLD on Oct 15, 2010 12:14 pm • link • report

@mPC i don't do it so I don't know the details. Cash back is involved. Maybe it is only the cash contribution of the employee. IDK. But then you get into ".. If I were going to take the benefit I would take the most expensive one and therefore I want the cash back for contribution to that premium and not the basic"...

by Tina on Oct 15, 2010 1:17 pm • link • report

If you can't be a part of the Greater Washington community without a car, something is wrong with the community.

by Matthias on Oct 27, 2010 10:03 pm • link • report