New Jersey should rethink its nuclear power ban

By Paige Lambermont of CEI.

"Right now, the state of New Jersey has a significant amount of offshore wind power planned for the near future. As part of its net zero plans, the state has set  a goal of 7,500 MW by 2035. But as many of those projects are financially collapsing, and offshore wind projects elsewhere are physically falling apart, this is yet another reason for the state government to reassess the range of power sources available within its borders. One piece of low hanging fruit when it comes to reassessing its power sources would be removing the state’s moratorium on new nuclear power. 

New Jersey currently requires that a permanent repository for spent nuclear fuel be established before the public utilities commissioners are able to approve new nuclear power plants in the state. Current on-site storage at nuclear power plants across the country, including in New Jersey, has been safe for decades, and will remain so for centuries. 

Nuclear power has the highest capacity factor of any power source, operating 92.5 percent of the time on average. This is far better than wind’s average of 35.4 percent or even the average of other reliable sources like natural gas and coal. Removing the moratorium on new nuclear would allow utilities within the state to build reliable capacity to meet increasing demand.

New Jersey has two safely operating nuclear power plants, the Salem and Hope Creek Nuclear Generating Stations which are located on the same site. Together, these two plants are the second largest nuclear site in in the country producing enough power to supply three million homes. If on-site storage is appropriate for this site, why would the waste safety needs of a future plant be radically different?  

Power demand is changing rapidly. The main driver of this is increasing power demand from data centers. Goldman Sachs estimates that data center power demand will grow by 160 percent by 2030, other estimates are even more extreme. This will prove to be a huge driver for power demand, leading utility companies to seek to build new power plants. New Jersey’s net zero goal of 100 percent clean energy by 2050 (which it will struggle to meet regardless) may also make nuclear appealing in the state because it has no carbon emissions at the point of generation while producing reliable power. 

New Jersey is one of 12 states that partially or fully restrict the construction of new nuclear power plants. When power demand growth was relatively stagnant, and there was little interest from utilities in building new nuclear, these bans were not as obvious of a problem. Now that the economics of power production are shifting, and interest in building these facilities is rising, these bans have clear consequences for the power mix and the ability to reliably meet demand. 

As power demand from data centers and other sources rises in the coming years, New Jersey would be wise to keep a range of options on the table for new power demand. Removing the moratorium on new nuclear power plant approvals would be a simple way to give utilities the flexibility they will need to meet the coming challenge.   

A version of this article first appeared on Catalyst."

Assessing Javier Milei, the World’s Best Leader: Part VII

By Dan Mitchell. 

"Argentina’s economy suffered a dramatic decline from 1946-2023 because of statist policy.

The economy became such a disaster that voters shocked the world in late 2023 by choosing Javier Milei, a hard-core libertarian, to be their next president.

Even though the Peronists still control the legislature, Milei has been somewhat successful in pushing his laissez-faire agenda. Over the past month, I’ve assessed his performance.

• In Part 1 of this series, I showed how Javier Milei has done a great job shrinking the burden of government spending.
• In Part II, I investigated how much he might be able to improve Argentina’s ranking in Economic Freedom of the World.
• In Part III, I shared central government spending data to reveal that Milei has been outstanding rather than merely  impressive.
• In Part IV, I reviewed two of the major structural obstacles to Milei’s agenda of economic reform and national revival.
• In Part V, I examined Milei’s efforts to reduce the suffocating impact of excessive regulation on Argentina’s economy.
• In Part VI, I shared a video on his impact as part of a look at the country on the one-year anniversary of his inauguration.

Today, let’s look at what has happened to the economic status of poor people since Milei took office.

This is supposed to be his weakness. A web search generates dozens and dozens of stories about Milei’s budget cuts ostensibly causing a big spike in poverty.

And poverty did jump at first, as shown in this chart based on data from the Universidad Catolica Argentina (UCA).  Especially between the final quarter of 2023 and the first quarter of 2024 (“pobreza” is regular poverty and “indigencia” is even worse).

Here’s some analysis of the data from Charles Lajoie.

…let’s see the UCA’s projections for the third trimester of 2024 (average of July, August and September) and the month of October 2024. …its microsimulations have projected a 46.8% poverty rate for the first period and a 44.6% poverty rate for October. We can also observe that the poverty rate for the fourth trimester of 2023 (average of October, November and December) was 45.2%, a higher rate than their latest projection. However, even this number is a bit misleading if used as the pre-Milei data point, since the poverty rate of the month Milei took office stood at 49.5%, according to the same university… Therefore, if these projections are accurate, the poverty rate was already 5.3 percentage points lower 2 months ago than at the beginning of Javier Milei’s presidency.

I’m not a big believer in drawing sweeping conclusions based on less than a year’s worth of data, but I will say that these numbers are much better than I would have predicted.

Milei is making radical changes and people losing government jobs and/or welfare benefits won’t necessarily have immediate success transitioning to the productive sector of the economy.

Especially since there’s also usually some short-run pain when an economy is weaned off the sugar high of easy money and inflation.

So I expected at least one year of bad economic news from Argentina before a rebound. Yet it seems the good news is already beginning to materialize.

Let’s now dig into some more numbers, this time from the Universidad Torcuato Di Tella.

Once again, there was an increase in poverty immediately after Milei took office. But now the trend is very positive.

Now let’s look at some more analysis from Charles Lajoie.

The Universidad Torcuato Di Tella has also projected a reduction of the poverty rate since December of 2023, their latest number indicating that the poverty rate for the bimester of October and November stood at 45.7%… Putting this together with the findings of the UCA, taking into account the fact that the latest estimate we have is a bimester starting 2 months ago and considering that nominal wage growth has outpaced inflation every single month from April to September according to official INDEC data (likely during the last 2-3 months as well since inflation has hit record lows and the economy is growing substantially again), I think it’s fair to say that it would be a quasi-impossibility for poverty to be higher than 49.5% at the moment. Poverty is almost undoubtedly lower today than when Milei first entered the Casa Rosada.

I’ll conclude with two observations.

First, Lagoie makes a persuasive case that poverty is lower today that when Milei took office. That’s very impressive, but what really matters is that he has changed the direction. Poverty was on an upward trajectory when he took office and now it’s declining.

Here’s an analogy that I used in an e-mail exchange about Milei with some leftist friends yesterday, I asked, “If you’re a copilot in a plane and the pilot has you hurtling toward a crash landing at 300 miles per hour and you decide to take the controls, will you instantaneously be climbing? Or will it take some time to arrest the fall and begin to ascend (especially if the pilot is still trying to crash the plane)?”

Just in case my point isn’t obvious, the Peronists (who still control the legislature and used to hold the presidency as well) are the suicidal pilot and Milei is the copilot trying to avert disaster.

My second observation is that we obviously will be able to more confidently assess Milei’s performance when we’re looking at several years of data. I hope he is able to make the changes Argentina needs. And if that happens, there’s no question we’ll have great results."

No, California's $20 Minimum Wage for Fast-Food Workers Did Not Create Jobs

A University of California, Berkeley, study trumpeted in the media doesn't say what the press release claims.

By Aaron Brown of Reason. Excerpts:

"the results celebrated in the press release and echoed by the media aren't in the paper. In fact, it barely addresses the effect of the minimum wage increase on fast-food employment in California. It offers no numbers and no models. There's no evidence that fast-food jobs increased after the law was implemented."

"Only toward the end of the 25-page study is employment shown. There you'll find a graph that represents the closest thing to an argument in the paper. It shows full-service and fast-food restaurant employment in California, represented by the red line, and in the U.S., represented by the blue line, from 2023 to 2024."

"The authors state that the data are prone to sampling errors, and make an inconclusive finding that "we do not detect evidence of an adverse employment effect." 

"But the solid red line on the chart clearly shows California fast-food employment increasing more slowly than the solid blue line showing national fast-food employment, which is the opposite of the authors' claim. If they suggest anything, these data show that the minimum wage increase reduced California fast-food jobs."

"the chart ends in July 2024, when California fast-food employment was up 1.85 percent since March 2024 while national fast food was up 3.22 percent."

"In 2021 and 2022, national and California fast-food employment grew at nearly identical rates: 7.7 percent over the two years nationally, and 7.8 percent in California. But in 2024, growth slowed dramatically in California, and after July, employment began to decline."

"The slowdown started a couple of months before the law took effect, but that's exactly what you'd expect because it was signed by the governor in September 2023 and management's decisions to close, open, or rebrand their restaurants would have been made in anticipation of the law being implemented."

"Every quarter, California employers submit a series of reports to the state giving details of each employee's hours and pay by Social Security number. The state knows everyone who worked for a fast-food operation covered by the law, and what their wages and hours were before and after the law took effect."

"If minimum wage increases were a drug, governments would have to conduct trials and monitor adverse effects afterward. That's what happened in Seattle when it raised the minimum wage in 2014. The city called for proposals to study the impact on actual workers earning below the minimum before the law. The Evans School of Public Policy and Governance at the University of Washington was the only volunteer. Its researchers found that the law didn't cause an increase in layoffs among workers who had previously earned below minimum wage, but it did reduce their hours by an average of 7 percent. That was partly offset by a 3 percent increase in hourly pay for the hours they did work. On net, the law cost these workers an average of $888 per year."

"workers who benefited from higher pay were the ones most likely to have risen out of the minimum wage ranks to the middle class even without a mandated increase, while the workers who lost much more than $888 per year are more likely to be the ones blocked forever from economic advancement. In fact, the paper found that the workers who benefitted net were the most experienced and highest paid among the group–earning more than the old minimum but less than the new–while the less-experienced workers earning the old minimum or close to it, lost considerably more than the average.

Seattle legislators must have been unhappy with those findings because they cut funding for the Evans School and reached out to the same group at U.C. Berkeley that did the California minimum wage study to do its own distorted analysis"