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Make-Work Jobs and $16 Hamburgers at Amtrak

By Josh Barro

I live in New York City, so I've eaten my share of $16 hamburgers. If a hamburger costs that much, it's usually pretty good. It had better be!

But that's not true if you're on Amtrak. At a congressional hearing yesterday, we learned that the agency's on-board, microwave-in-bag hamburgers cost $16 to serve, even though the agency only charges travelers $9.50 to buy one.

The purpose of the hearing was to examine why Amtrak's food service operations have lost $800 million over the last 10 years. The answer is, apparently, that it costs Amtrak a ton of money to serve food that is mostly pretty terrible.

Selling edible food at a profit is not rocket science. Even the airlines have increasingly figured out how to do so. If Amtrak can't do it itself, it could outsource its food service operations to a company like Gate Gourmet that has expertise in travel catering.

Why doesn't Amtrak do this? Nick Rahall, the ranking Democrat on the House Transportation and Infrastructure Committee, has one answer. He says Amtrak food service jobs are well-paying, and we shouldn't eliminate them, even if the food service is expensive and terrible. “It’s a whopper of an idea, trading good-paying jobs for cheaper hamburgers,” said Rahall.

This is worth remembering. I have often criticized President Barack Obama and other Democrats for failing to make the case that government does valuable things that the public -- including the middle class -- should be willing to pay taxes for. But that argument assumes that the government will focus on actually doing valuable things.

If Democrats in Congress are going to make the case that the government should keep selling $16 hamburgers at a $6.50 loss -- hamburgers that aren't even any good -- because that helps keep workers on the public payroll, then I see why they aren't prepared to make the case that taxes are worth paying.

(Josh Barro is lead writer for the Ticker. E-mail him and follow him on Twitter.)

Read more breaking commentary from Josh Barro and other Bloomberg View columnists and editors at the Ticker.

-0- Aug/03/2012 20:25 GMT

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