Surprising no one, California loses another business to Texas

July 20, 2014

Moving

This time, Perry’s Poachers have snagged Omnitracs LLC of San Diego, a fleet management firm that will be moving to Dallas and taking 450 jobs with it:

Fleet management software company Omnitracs LLC will relocate it headquarters to Dallas from San Diego, creating 450 jobs and $10 million in capital investment, Gov. Rick Perry’s office announced Friday.

The company will move into KPMG Centre downtown.

Omnitracs is the latest in a wave of California relocations to North Texas announced this spring and summer.
The Texas Enterprise Fund is providing a $3.9 million incentive to attract Omnitracs. The new headquarters will house jobs in a variety of high-paying fields, including engineering, research and development and finance.

Omnitracs provides fleet management solutions for the trucking industry. Its services include software applications, GPS fleet tracking, platforms and information services.

Omnitracs is just the latest in a long line of businesses that have fled or are about to flee the once-Golden State. The article lists others, including Toyota, and mentions Vista Equity Partners, a California firm that specializes in buying firms and moving them to Texas.

Yes, the one business that California can keep is one that helps others get the heck out.

Well, we bloody well deserve it, with a business climate that’s designed to drive people away, not bring them here. I’m old enough to remember when California was a place to people rushed to, in order to build a future.

Now, thanks to 40 years of progressive misrule, they rush to get out, in order to save what future they have left.

via Stephen Frank

RELATED: Victor Davis Hanson, a fellow Californian, on our frivolous legislature. Must reading.

(Crossposted at Sister Toldjah)


It begins: SeaTac businesses add “living wage surcharge” to cover minimum wage

June 6, 2014

When discussing Seattle’s new, progressive –FAIR!!– $15 per hour minimum wage, I wrote that business owners had just a few choices in response:

Critics, on the other hand (and including your humble correspondent), argue that the laws of economics cannot be repealed by legislative fiat: raise the cost of labor, and businesses will be faced with a choice from among four options — pass the costs on to the consumer; reduce labor costs by cutting hours or whole jobs; eat the costs and accept lower profits; or cease doing business in that jurisdiction, either by moving or closing shop. 

Having seen some businesses hold off on hiring, while others moved out of Seattle, we now have an example of another option: pass the cost along to the consumer:

And just look at that sales tax, too: 10.9%. Add the “living wage charge” and…

Yep. This is going to be a very interesting experiment.

via Twitchy

UPDATE: Just had it pointed out to me that SeaTac is not Seattle. My mistake; I’m not that familiar with Washington. Still, it can’t be all that long before Seattle itself sees these “living wage surcharges.” Also fixed the headline.

via:

(Crossposted at Sister Toldjah)


Seattle: $15 minimum wage already costing jobs

May 28, 2014
"But at least we won the election! Obama!!"

“But at least we raised the minimum wage!”

And it’s not even in effect, yet.

But, it’s not surprising. Business managers have to plan for the future, and a looming huge increase in their labor cost will force many to rethink how they do business in Seattle, if they continue to do business there at all. Writing for the free-market Washington Policy Center, Erin Shannon reports on how small businesses are planning to cut back on hiring, delaying expansion, or moving out of the city to deal with the new wage law. Most striking, though, is the account of one business owner who supported the law, but now thinks she may have made a mistake:

One of those business owners is a well-known and active supporter of “progressive” labor policies, including a higher minimum wage. Jody Hall, owner of Cupcake Royale, initially supported a $15 minimum wage. But now Hall admits the proposed policy is, “keeping me up at night like nothing ever has.”

While Hall has serious concerns with Mayor Ed Murray’s plan to phase in a $15 minimum wage over seven years with a temporary tip credit, her biggest fear is if voters approve the radical charter amendment sponsored by the group 15Now. The charter amendment would force all large employers to begin paying $15 in 2015, and would give small business owners just three years to acclimate to the high wage. And the 15Now proposal would not allow for any tip credit.

If the charter amendment passes, Hall says she would be forced to close half of her seven locations and lay off 50 of her 100 workers.

But beyond the differences between Mayor Murray’s proposal or the more aggressive 15Now proposal, Hall says she now has “serious second thoughts” about a $15 minimum wage in general, especially since Seattle would be “going it alone” with a wage that is significantly higher than any other minimum wage in the nation.

Hall’s second thoughts about a $15 minimum wage have led to second thoughts about expanding her business. She was set to open a new business in Seattle this year, but has tabled the plan until after voters have their say on the charter amendment in the November election. Hall says if she considers any new locations before then, they will be outside the city limits.

In other words, when progressivism meets economic reality, guess which wins? You would think a successful businesswoman like Hall would have seen this coming. Maybe she thought she’d get a waiver from Obama.

And pay special attention to her comment about “going it alone.” As minimum wage increases are applied and then have the same effect in various places, there will be more and more calls from the fairness crowd to apply these laws statewide and even nationwide, to make sure business owners can’t just move to a friendlier jurisdiction, which would be “unfair.” The minimum wage thus becomes a wedge issue in an attack on local control, federalism, and jurisdictional competition, things progressive just hate, because their favored policies usually fail.

Meanwhile, I want to thank Seattle for volunteering to be a case study on the foolishness of government control of wages.

via Adrian Moore

(Crossposted at Sister Toldjah)


Greedy Politicians Get their Comeuppance as Taxpayers Escape

May 3, 2014

Phineas Fahrquar:

First it was Toyota here in California fleeing to Texas, and now Pfizer want to reincorporate in the UK. Both are perfect illustrations of the insanity of statist tax policy: legislators think they can take as much as they want, and the “marks” will keep on paying. But, eventually, the marks have had enough and simply leave, thus leaving the greedy, foolish legislator with nothing.

Originally posted on International Liberty:

If you’re a regular reader, you already know I’m a big supporter of tax competition and tax havens.

Here’s the premise: Politicians almost always are focused on their next election and this encourages them to pursue policies that are designed to maximize votes and power within that short time horizon. Unfortunately, this often results in very short-sighted and misguided fiscal policies that burden the economy, such as class-warfare tax policy and counterproductive government spending.

So we need some sort of countervailing force that will make such policies less attractive to the political class. We don’t have anything that inhibits wasteful spending,* but we do have something that discourages politicians from class-warfare tax policy. Tax competition and tax havens give taxpayers some ability to escape extortionate tax policies.

Now we have a couple of new – and very high-profile – examples of this process.

First, a big American drug company…

View original 1,250 more words


Fleeing California: Toyota takes its business (and its jobs) to Texas

April 28, 2014

Moving

Oh, man, this is just a gut punch to the Southern California economy:

Toyota Motor Corp. plans to move large numbers of jobs from its sales and marketing headquarters in Torrance to suburban Dallas, according to a person familiar with the automaker’s plans.

The move, creating a new North American headquarters, would put management of Toyota’s U.S. business close to where it builds most cars for this market.

North American Chief Executive Jim Lentz is expected to brief employees Monday, said the person, who was not authorized to speak publicly. Toyota declined to detail its plans. About 5,300 people work at Toyota’s Torrance complex. It is unclear how many workers will be asked to move to Texas. The move is expected to take several years.

I don’t know how many will move to Texas, but I bet several thousand won’t. And that doesn’t even address the ripple effects in the region’s economy, all sorts of support businesses that would lose the revenue spent by those employees — restaurants, dry cleaners, janitorial companies, you name it. Those people won’t be heading for Texas; they’ll be stuck here. And it’s going to hurt.

Toyota originally came to LA in the late 1950s, and staying here made sense for them for a long time, in spite of increasingly burdensome taxes and regulations. After all, most of their cars entered the US through the huge Port Of Los Angeles, so it made sense to have the North American HQ nearby.

But, with the passage of time, Toyota, like so many foreign car manufacturers, built more and more of their cars here in the US, mostly choosing to construct their facilities in business-friendly Southern states… such as Texas. The last auto manufacturing plant in California, coincidentally Toyota’s, closed in 2010. Eventually, economic logic (1) lead the company to decide that the cost of living and business in California wasn’t worth staying in California, not when their manufacturing operations had all shifted to Texas and nearby states.

As Dale Buss writes at Forbes. After talking about the structural shift in Toyota’s business, he looks at the once-Golden State:

Besides, California’s business climate is becoming an even bigger downer. California has become infamous with business executives and owners there not only for high tax rates and complex taxing schemes but also for overzealous regulations and regulators that have managed to stifle the entrepreneurial energy of thousands of companies.

Even Hollywood movie studios have been souring about producing flicks in California, increasingly reckoning that the sweet tax breaks and assistance packages now offered by so many other states offset the legacy advantages and ideal production climate in California.

About the only vast remaining pocket of dynamism in the California economy is Silicon Valley, where the mastery of the global digital economy by companies ranging from Google to Hewlett-Packard has become so complete that they have been able to succeed despite the home-state business landscape.

In the annual Chief Executive magazine “Best States / Worst States” ranking that surveys CEOs for their opinions, Texas has been holding on to the No. 1 spot for a while; California seems permanently relegated to No. 50.

As Automotive News put it, “Despite the deep, creative talent pool in greater Los Angeles, doing business in California has become more expensive for companies and their workers.” Bestplaces.net said that the cost of living for employees is 39 percent higher in Torrance than in Plano, and housing costs are 63 percent lower in Plano.

Thus, over the last 10 years, the Lone Star State has stolen so many jobs from the paragon of the Pacific Coast that Toyota’s reported move should come as no big surprise.

No, it’s no surprise, but it is maddening because it is a largely self-inflicted wound. Business flight has been going on for a few years, now, and, no, “Green jobs” just aren’t going to fill the gap. Heck, a businessman even set up a consulting firm to help companies “abandon ship.”

Losing Toyota should be a loud, blaring alarm for Governor Brown and the progressive oligarchs who dominate our legislature, for it’s their policies, piling on regulations and taxes year after year, decade after decade, that have made it nearly impossible to build a business here. (Just read this “Dear California” letter from a small businesswoman who’d had enough.) And for those companies that had been successful, the incentive to move finally grows too great to resist. But they won’t learn, not until it gets much worse. Like all good oligarchs, they’re isolated in their ivory tower of safe seats and unaccountability (2).

Keep watch at the I-10 crossing into Arizona: pretty soon, a lot of those taillights you see  heading East are going to be on the back of Toyotas.

And they ain’t coming back.

Footnote:
(1) Something progressives should acquaint themselves with, sometime.
(2) And, before anyone else can say it, yes, that’s our fault as voters.

(Crossposted at Sister Toldjah)


Financial Bureaucrats on Easy Street, with Consumers and Taxpayers Paying the Bill

April 23, 2014

Phineas Fahrquar:

Guess who’s getting rich on Wall St.: federal regulators.

Originally posted on International Liberty:

I’ve complained many times about government intervention in the financial sector.

The financial and housing crisis, for instance, was largely a consequence of the Federal Reserve’s easy-money policy, combined with the system of corrupt subsidies put in place by Fannie Mae and Freddie Mac.

But there’s another government-imposed cost that burdens the financial sector.

Writing for the Wall Street Journal, Paul Kupiec of the American Enterprise Institute reveals some very sobering – and disturbing – data on pay levels for both the financial industry and its regulators.

Most banks in this country are small businesses and pay employees modest salaries. The Bureau of Labor Statistics reports that the average annual salary of a bank employee was $49,540 in 2012, not much higher than the average annual across all occupations, $45,790.

In other words, there are some very well paid people working for big banks, but most employees in…

View original 768 more words


#Obamacare to cost employers more than $5,000 per employee

April 2, 2014

 

"Obamacare has arrived"

“Obamacare has arrived”

The American Health Policy Institute did something unusual: rather than estimate the effects of Obamacare from the outside, they went to 100 large employers and asked the directly what their expected costs would be over the next ten years. The results were eye-opening — and disturbing:

Obamacare will cost large companies between $4,800 and $5,900 more per employee and add hundreds of millions to their overhead, according to a new survey.

(…)

Factoring in the health care law’s added mandates, fees, and regulatory burdens, employers anticipate cost hikes between $163 million and $200 million in 2016, a 4.3 percent increase. By 2023, employers will be paying 8.4 percent more than “what they would otherwise be spending” for their employees’ health care.

In the next 10 years, the total cost of Obamacare to all large American employers is estimated to be from $151 billion to $186 billion, according to the study.

“This study is a c-suite diagnosis of how [the Affordable Care Act] ACA is shaping large employer behavior,” Tevi Troy, president of the American Health Policy Institute, said. “We don’t know yet precisely how employers will react, but the study shows that employers will have to make real changes or incur heavy costs, which means that the ACA will have a significant impact on those in employer-sponsored health care.”

While noting that some will say the results will “lead to more economical use of health care dollars,” the study questions whether the increase in health costs could bring the “end of the employer-sponsored health care system.”

I don’t think there’s any “may” about it: the perverse incentives of Obamacare scream at employers to save money by dumping their insurance plans, pay the fines instead, and let the employees try their luck on the exchanges. (And luck is what they’ll need.)

This, of course, is what was intended all along, part of the Obamacare Trojan Horse that Harry Reid admitted we’re all supposed to ride to the land of single-payer, state-run healthcare. Blowing up the existing health care and insurance industries, which most people were satisfied with, was all part of the plan.

We shall have a chance to comment on said plan next November. I, for one, am looking forward to it. Aren’t you?

Read the rest at the Free Beacon.

(Crossposted at Sister Toldjah)


Minimum Wage Laws: Sabotaging the Ladder of Economic Opportunity

February 23, 2014

Phineas Fahrquar:

The only people who truly benefit from minimum wage increases are union bosses, who salivate at the prospect of more dues coming in, money they can use to buy legislators.

Originally posted on International Liberty:

If I banged my head against the wall every time politicians advocated bad policy in Washington – which is a tempting impulse, I would have been institutionalized because of brain damage a long time ago.

But it’s difficult to maintain my self control when I think about minimum wage laws.

All sentient human beings should know higher minimum wage laws will mean more unemployment. Just ask them, for instance, what would happen if the minimum wage was raised to $100 per hour. Once they admit that would lead to massive job losses, they’ve accepted the principle and it’s simply an empirical issue of figuring out how many jobs are lost when the minimum wage is $75, $50, $20, $10, $6, etc.

At the risk of stating the obvious, businesses seek to make money and they won’t hire somebody who can only produce $6 of value per hour if…

View original 277 more words


LA restaurant imposes surcharge to pay for #Obamacare

February 18, 2014
"Obamacare has arrived"

“Obamacare has arrived”

What is it we like to say, folks? That’s right, “Elections have consequences!” When you vote for a party that insists against all sound reason on passing legislation that raises a business’ cost, said business is likely to pass that cost along to the consumer — us.

It’s called economics, progressives. You should acquaint yourselves with it, sometime.

Anyway, a hot new Los Angeles restaurant, Republique (1), has added a 3% surcharge to all tickets to cover the cost of their new, more expensive, Obamacare-mandated insurance:

Republique has taken heat from patrons for the tacked-on cost, but managing partner Bill Chait told Southern California Public Radio there is a method behind the madness.

The restaurant wanted its 80-plus workers to be full-time workers, but the health care law in the coming years will require large employers to provide health coverage to its full-timers or pay fines.

Although the Obama administration has delayed the mandate for companies of 50 to 99 employees to 2016, critics say the rule is forcing employers to trim payroll or move people to part-time status ahead of time.

From there, employees can fend for themselves on new insurance exchanges set up under Obamacare.

“There’s an inherent incentive to put people in the exchanges and not through the restaurant and their employers if they’re part-time employees,” Mr. Chait told SCPR.

But that wasn’t good enough for Mr. Chait or chef Walter Manzke.

Chait and Manzke decided that they needed full-time staff to provide the best service possible to their customers, and that in turn meant paying more for insurance. And that in its turn lead to the decision to charge customers more. All of these are reasonable business decisions, and I have no problem with Chait and Manzke’s decision. It’s their business, their property. And they seem to have made their peace with it. (2)

(Or maybe they don’t want to tick off their trendy, mostly liberal customers by complaining…)

What I do have a problem with is government forcing them to make a choice that leads to higher prices for consumers, especially when it’s clearer every day that this anti-constitutional monstrosity of a law, which a majority of the nation has never wanted and which was shoved down our throats, is not going to do a bloody thing it promised and in fact is going to make things worse. (For the latest example…)

Obamacare doesn’t just need to be repealed. It needs to be staked and buried under a crossroads at midnight.

Here’s a video report from KCAL 9.

via The Right Scoop.

Footnote:
(1) No menu online? Dudes, really?
(2) You can have fun watching customers argue with each other over the surcharge in their Yelp reviews.

(Crossposted at Sister Toldjah)


County government crushes little girl’s cupcake business

January 31, 2014
I said, no fun allowed!

I said, no fun allowed!

And you thought the Nanny State’s “war on child entrepreneurs” was over, after the Great Lemonade Stand War of 2010-11. I’m sorry to say, my friends, that the enemy, enterprising children who want to earn a little money, has opened a new front, threatening us all with the horror of unregulated micro-businesses.

Thank God, however, that the Madison County, Illinois, Health Department is there to protect us from the danger of unlicensed cupcakes:

After-school jobs are tougher to keep, apparently, than they used to be.

On Sunday, a Belleville News-Democrat story featured 11-year-old Chloe Stirling of Troy, Ill., a sixth-grader at Triad Middle School who makes about $200 a month selling cupcakes.

According to a report I watched on Megyn Kelly’s show last night, her parents, seeing Chloe was both serious at her new hobby and good at it, made her an offer: if she saves the money she earns through selling cupcakes, they will match it when she’s 16 and help her buy a car. Great idea, right? Chloe learns some skills and responsibility, how to set and meet goals, and, who knows, maybe she goes on to open her own bakery and creates jobs for other people. “Women’s empowerment,” know what I’m saying?

Winning situation all-around, right?

Well, Nanny State is right there to put an end to this nonsense!

“[The county] called and said they were shutting us down,” Heather Stirling, Chloe’s mother, told the St. Louis Post-Dispatch.

Officials told Stirling Chloe could continue selling cupcakes on the condition that the family “buy a bakery or build her a kitchen separate from the one we have.”

“Obviously, we can’t do that,” Heather Stirling told reporters. “We’ve already given her a little refrigerator to keep her things in, and her grandparents bought her a stand mixer.”

The elder Stirling said that she was willing to get her daughter any necessary licenses or permits to operate a business, but could not meet the health department’s other demands.

“But a separate kitchen? Who can do that?” asked an astonished Stirling.

When asked why they were curb-stomping an 11-year old’s business, martinets for Madison county started channeling Judge Dredd:

Health department spokeswoman Amy Yeager said they had no choice but to ask Chloe to close Hey Cupcake.

The rules are the rules. It’s for the protection of the public health. The guidelines apply to everyone,’ she said.

Sharon Valentine, environmental health manager at St Clair County (1) Health Department, added: ‘If we let one person do it, how can we tell the person with 30 cats in their home that they can’t do it? A line has to be drawn.’

The local health department had been tipped off to Chloe’s baking business after she appeared on the front page of Belleville News Democrat at the weekend.

Somehow –and you can call me “naive”– but I think the “crazy cat lady” scenario is a bit different than a grade-schooler in her parents’ kitchen.

Now, lest I sound like a foaming at the mouth anarcho-capitalist, I’m not averse to regulating food businesses for public health. Restaurants, commercial bakeries, butcher shops and so forth, sure. There is a legit public health interest.

Still, let’s be reasonable here. This is the equivalent of making little Julie Murphy cry in the name of enforcing regulations really meant for adults and real businesses. Asking the parents to buy an inexpensive license, which they were willing to do, and maybe submit the kitchen to a health inspection should be enough.

But “buy a bakery or build a separate kitchen??” That smacks of a petty bureaucrat being bored and needing some enforcement actions to show for the annual review.

And maybe a little bit of cartelism, too. Reason has written several good articles about how occupational licenses are used to limit competition.

Such as from little girls who are saving for their first car.

License required.

License required

Footnote:
(1) Not sure why the Mail reporter called St. Clair county, which is next door to Madison county. I guess from a UK point of view, all those American counties look alike.

(Crossposted at Sister Toldjah)


Go ahead, increase the minimum wage. Then, kiss those jobs goodbye.

January 14, 2014
"But at least we won the election! Obama!!"

“But at least we won our minimum wage increase!”

I’ve said time and again that because wages are a cost for businesses, they have to find a way to control them so they can earn a profit that makes it worthwhile to stay in business. Mandate wages that are too high, and companies will find creative ways to trim those costs back down.

Such as replacing the workers with machines:

Fast food doesn’t have to have a negative connotation anymore. With our technology, a restaurant can offer gourmet quality burgers at fast food prices.

Our alpha machine frees up all of the hamburger line cooks in a restaurant.

It does everything employees can do except better:

It slices toppings like tomatoes and pickles immediately before it places the slice onto your burger, giving you the freshest burger possible.

Our next revision will offer custom meat grinds for every single customer. Want a patty with 1/3 pork and 2/3 bison ground to order? No problem.

Also, our next revision will use gourmet cooking techniques never before used in a fast food restaurant, giving the patty the perfect char but keeping in all the juices.

It’s more consistent, more sanitary, and can produce ~360 hamburgers per hour.

The labor savings allow a restaurant to spend approximately twice as much on high quality ingredients and the gourmet cooking techniques make the ingredients taste that much better.

That’s from the web site of Momentum Machines in San Francisco. You can bet all those progressive Bay Area burger-flippers and baristas demanding a $15 per hour minimum wage will be screaming “unfair!” when they find themselves replaced.

Not that I’m some sort of anti-technological Luddite; far from it. But these idio… er, “people” demanding a huge increase in the minimum wage need to recognize that their bosses have choices to make, and one of those choices may well be a very rational decision to cut back hours or eliminate jobs altogether. Is it worth winning a $15 per hour rate, when you wind up collecting nothing?

Keep it up, burger flippers, and you may well pave the way for the return of the automat.

Forward into the past?

Forward into the past?

via Melissa Clouthier

(Crossposted at Sister Toldjah)


Anti-gun NFL: National Frauds’ League

December 4, 2013

I saw the commercial in question the other day. Nothing offensive about it, at all, even from a moderate pro-gun control PoV. This is just the NFL being politically correct, and ridiculously so. Goodell is killing the League.


Another gun company leaves New York

November 5, 2013

pistol

Via the Washington Free Beacon, this makes the third gun company to head for more welcoming locales:

Nearly 10 months since New York Gov. Andrew Cuomo (D.) signed the SAFE Act, opposition to the law continues to increase, three gun companies have announced plans to leave the state, and a key provision in the law has been quietly delayed.

American Tactical Imports is the third gun company to announce it would be leaving the state and will be investing $2.7 million in its new facility and creating 117 new jobs in South Carolina.

The delayed provision is the real-time background check for all ammunition purchases; no reason has been given for the hold-up. Maybe they hired the same company that designed healthcare.gov.

Read the rest for some jaw-dropping instances of people being arrested for ticky-tack violations of the state’s new ammunition limits. I swear, the best way to get people to realize how bad progressivism is as a governing philosophy is perhaps to just them have power for a while and sit back while they tick everyone off.

RELATED: Earlier 2nd amendment posts.

UPDATE: Welcome Hot Air readers, and thanks for the link, Jazz!


The Obamacare Chronicles: Trader Joe’s to drop coverage for part-time employees

September 11, 2013

"Obamacare has arrived"

“Obamacare has arrived”

In my area of Los Angeles, the Trader Joe’s employees and clientele tend to be liberal and well-left of liberal. I wonder what they think of this news?

After extending health care coverage to many of its part-time employees for years, Trader Joe’s has told workers who log fewer than 30 hours a week that they will need to find insurance on the Obamacare exchanges next year, according to a confidential memo from the grocer’s chief executive.

In the memo to staff dated Aug. 30, Trader Joe’s CEO Dan Bane said the company will cut part-timers a check for $500 in January and help guide them toward finding a new plan under the Affordable Care Act. The company will continue to offer health coverage to workers who carry 30 hours or more on average.

The law mandates that companies with 50 employees or more offer coverage to such full-time employees, though the Obama administration has chosen to delay that rule for a year.

Trader Joe’s has won kudos for offering its health care, dental and vision plans to part-time workers at a reasonable price — a rarity in an industry known for low pay and scant benefits. But with low-wage workers eligible for tax subsidies to buy health insurance next year, the company has apparently calculated that offering medical coverage to part-timers who work 18 hours or more is no longer worth the cost.

“Depending on income you may earn outside of Trader Joe’s” — i.e., another job — “we believe that with the $500 from Trader Joe’s and the tax credits available under the ACA, many of you should be able to obtain health care coverage at very little if any net cost to you,” Bane wrote in the memo.

They have an interesting idea of “little if any net cost,” since the projected increase in insurance rates in California are 23% for a 27-year old, and 14% for a 40-year old.

But, don’t blame Trader Joe’s; they’re just doing what makes economic sense for the business, given the perverse incentives built into Obamacare.  The real targets for anger should be the Democrats and their allies, who shoved this anti-constitutional monstrosity down an unwilling nation’s throat, and the people who voted for them.

Such as many, many of the part-time employees at my local TJ’s, who’ve just had a hard lesson in the old adage, “elections have consequences.”

via Bryan Preston

(Crossposted at Sister Toldjah)


The Obamacare Chronicles: Delta Airlines to take a $100,000,000 hit

August 23, 2013

"Obamacare has arrived"

“Obamacare has arrived”

And it’s not like the airline industry is doing all that well, as it is. But, gee, what’s another hundred million or among friends?

Delta Air Lines has issued an urgent warning about the impact of ObamaCare, claiming the law’s implementation will contribute to a roughly $100 million increase in health care costs next year alone.

The astonishing figure was included in a letter from Delta executive Robert Kight to officials in the Obama administration. The website RedState.com was the first to obtain and publish the letter earlier this week.

(…)

In the original letter, Kight disputes the notion that the law — the biggest parts of which take effect at the start of 2014 — will mean “business as usual” for big employers. A combination of factors, he claimed, will “mean that the cost of providing health care to our employees will increase by nearly $100,000,000 next year.”

Part of that is normal medical inflation and the phase-out of an assistance program tied to the health care law. But a large chunk of it, the exec claimed, comes from various fees and costs associated with the implementation of the health care law.

One of the costly items pertains to an annual fee of $63 per “covered participant” next year. The company estimates this means a more than $10 million expense in 2014. The catch for Delta is that, because many of their employees insure through Delta, the fee meant to help subsidize the health care law’s coverage amounts to a “direct subsidy” from the company that provides “zero direct benefit to our participants,” Kight said.

Another added cost comes from the requirement to cover children and young adults on parents’ plans until they’re 26 years old. Kight reports that the change led to 8,000 more people being added to their rolls, at an annual cost of $14 million.

There’s more; be sure to read it all.

Delta claims it will absorb the costs the “vast majority” of those new costs, but…. come on. Leaving the exact meaning of “vast majority” aside (95%? 75%? 51%??) and ignoring for a moment that the rest will have to be picked up by employees who may already be stretched (and losing their spousal coverage), airlines operate on paper-thin margins; there will be tremendous pressure to recoup these costs. And that means passing them along to the consumer in the form of higher tickets prices and more fees for anything the airline can think of.

Thus not only does Obamacare not make health care more affordable, but it’s almost certain to make airline travel more expensive, too. This is almost a case-study of what happens when government tries to control an economy: the inputs and ramifications are too complex for a few “deciders” to understand, and so we end up with one disastrous unintended consequence after another.

There’s no “fixing it,” regardless of what the Democrats and the Left (but I repeat myself) will try to say in 2014 and 2016. It has to be torn out, root and branch. And if anyone says that’s impossible because there are no alternatives, tell them they lie.

Aren’t you glad the Democrats passed that anti-constitutional monstrosity, just so we could find out what’s in it?

via ST

(Crossposted at Sister Toldjah)


The Obamacare Chronicles: in which UPS proves me right

August 21, 2013
"Train wreck"

“Train wreck”

The timing couldn’t be better. Yesterday I quoted an article from the Pittsburgh Tribune’s TribLive site reporting that, due to Obamacare, some companies were looking to save money by dropping spousal coverage.

Today UPS dropped the hammer:

UPS to drop 15,000 spouses from insurance, cites Obamacare

United Parcel Service Inc. plans to remove thousands of spouses from its medical plan because they are eligible for coverage elsewhere. The Atlanta-based logistics company points to the Affordable Care Act, or Obamacare, as a big reason for the decision, reports Kaiser Health News.

The decision comes as many analysts are downplaying the Affordable Care Act’s effect on companies such as UPS, noting that the move reflects a long-term trend of shrinking corporate medical benefits, Kaiser Health News reports. But UPS repeatedly cites Obamacare to explain the decision, adding fuel to the debate over whether it erodes traditional employer coverage, Kaiser says.

Rising medical costs, “combined with the costs associated with the Affordable Care Act, have made it increasingly difficult to continue providing the same level of health care benefits to our employees at an affordable cost,” UPS said in a memo to employees.

At the risk of wearing out this drum I’ve been beating, UPS is only doing the rational thing for the good of the company and its owners (1), because of the perverse incentives created by this anti-constitutional monstrosity.

This is one reason I’ve come to oppose the “Defund Obamacare” tactic pushed by Heritage and Senators Cruz, Lee, Paul, and Rubio (2), even though I’m unalterably against Obamacare: this thing is falling apart on its own, both through missed deadlines and because of the pain and dislocation it’s starting to cause Americans, such as those 15,000 UPS workers.

But recognizing that it’s collapsing of its own poor design does not meant that we can sit back and relax, because, per the far Left’s plan, the problems of Obamacare will be used to pave the way for truly nationalized single-payer health care. Don’t take my word for it — ask Harry Reid. If we let them, this is exactly what they’ll do. It’s up to us to point out at every opportunity (such as when the UPS guy happens to mention losing his wife’s coverage) that all this is a result of not a few problems in Obamacare that need fixing, but of the law itself. The whole thing.

The basic concept, not just its execution.

If we do the political work to beat the Left’s propaganda and show how Obamacare harms the average American, we can still repeal this thing in 2017, or so reform it that it will be like repeal.

Obamacare delenda est.

via Jim Geraghty

Footnote:
(1) In this case, mostly shareholding mutual fund companies, which certainly include a a large number of pensioners. You don’t want retired people hurt, do you?
(2) “Oppose” means just that: I disagree with their strategy, while still liking, admiring, and generally agreeing with them. It’s the Left that likes to anathematize people for varying from accepted group-think. I just think they’ve misread the tactical situation badly and instead risk leaving Obamacare in place by failing.

(Crossposted at Sister Toldjah)


The Obamacare Chronicles: Like your family’s insurance? Suckers!

August 20, 2013
"Quack medicine"

“Quack medicine”

Great news! Because Obamacare imposes higher costs on employers, but doesn’t require employers to cover spouses, more and more companies are dropping spousal coverage:

A growing number of companies are looking to clamp down on rising health care costs by dumping coverage for their employees’ working spouses.

Others are requiring their workers to pay extra money to cover a spouse who could get health insurance elsewhere. And some may even consider making employees pay the full cost of insuring their children.

The moves are viewed as low-hanging fruit for companies that are expecting higher costs next year under the Affordable Care Act, also known as Obamacare.

“We’re seeing costs going up,” said J.T. Shilling, a benefits consultant who runs the Pittsburgh office of consulting firm Mercer. “Taxes, fees, more enrollment are driving up costs, and employers are looking for ways to reduce costs. And this is a pretty easy one.”

The higher charges and exclusions for spouses are part of a national trend that’s hitting home in Western Pennsylvania.

Or, if you’re “lucky,” they’ll only impose a surcharge.

Again, the companies are acting rationally in the face of an irrational law: since Obamacare vastly increases costs for the employer, it makes sense to drop spousal coverage when that spouse has coverage through his or her employer, even if it’s not as good as what the first company is offering.  But, you know, Obamacare is for the children, and therefore everything is okay.

Oh, wait:

Although the law requires plans to cover children, it allows companies to pass along the full cost of so-called dependent coverage to the employee, McTiernan said.

“Some employers were in fact contemplating” whether to make workers pay for their children, he said. “It’s one way to mitigate the cost.”

Nice. They’ll give you the required coverage, perhaps more than you need, and then stick you for the full cost — thanks to Barack Obama and the Democratic Party.

Remember that when election day rolls around.

Via Jim Geraghty, who asks a darned fine question:

Why does most of the media coverage suggest that Republicans are crazy for wanting to repeal this legislative monstrosity, and the Democrats are sane for wanting to keep it in place?

Because most of them are toe-kissing heralds for their Sun King, Obama? Just a guess.

BTW, Jim, it’s “anti-constitutional monstrosity.” Let’s keep our terms straight, okay? ;)

(Crossposted at Sister Toldjah)


The Obamacare Chronicles: Labor votes for Obama, labor gets its thank-you

August 19, 2013
"But at least we won the election! Obama!!"

“But at least we won the election! Obama!!”

In the form of having their hours of employment cut to avoid the (delayed) employer mandate in Obamacare:

The predictions and fears of the Affordable Care Act’s adversaries have begun to materialize, specifically fears that the law will encourage employers to demote their employees to part-time positions in order to evade federal health care requirements. Popular clothing company Forever 21 is the first of what might be many companies to limit its non-management workers’ hours to 29.5 a week, just below the 30-hour minimum that the ACA deems full-time work.

Explaining that the company “recently audited its staffing levels, staffing needs, and payroll in conjunction with reviewing its overall operating budget,” Associate Director of Human Resources Carla Macias informed employees that effective August 31, they will no longer be full-time employees of Forever 21.

It is a move that will likely harm the reputation of the company, will absolutely harm the economic circumstances of its employees, and will function as a tangible example of the Affordable Care Act’s consequences and shortcomings.

Although the ethical nature of Forever 21’s decision is debatable, it is both rational and understandable. A company that boasts regularly low prices and frequent, sensational sales, Forever 21’s competitive success is largely dependent upon its ability to maintain low manufacturing and operational costs. The ACA is an undeniable burden on this principle, and Forever 21’s management has the prerogative to take any legal measures necessary to avoid raising the costs of its products.

Contra Ms. O’Neill at Policymic, who does a good job with the economics of Forever 21’s dilemma, I don’t think the ethics are debatable at all. Forever 21’s management owes a fiduciary responsibility to the company’s owners to return the most profit at the least cost while staying within the law and the laws of good business. This is their primary duty. They owe their employees nothing more than what is required under law and the overall decent treatment again dictated by good business sense. (Happy employees leading to less turnover and higher productivity.)

What they do not owe their employees is anything that actually harms the business. As the article reports, Forever 21’s business niche is as a provider of low-cost clothing, presumably mainly to a budget-conscious student and working-class clientele. To do this, they have to keep costs down. Obamacare makes this impossible with regard to health care benefits (1), so the managers are faced with three choices:

  1. Pay for insurance as required under Obamacare and accept a lesser profit margin in a business that’s already low-margin, thus betraying their primary duty to their owners;
  2. Pay for insurance as required under Obamacare, but increase prices to the consumer, thus hurting Forever 21’s competitiveness and probably lessening profits, again violating the main reason any business exists;
  3. Adapt by controlling expenses, in this case by reducing employee hours to avoid the employer mandate’s tripwire.

In the end, they still probably harm their business, assuming a higher instance of unhappy employees, but it’s the least harmful option that also meets management’s primary responsibility — to create a profitable business for the owners. It is, in fact, the unquestionably ethical choice.

As I’ve said before, I feel sorry for anyone seeing their hours cut, but don’t blame the company, which is simply making a rational choice. Instead, lay the blame directly where it belongs, with the Democrats who voted for it and their Leftist and Big Business enablers who shoved this anti-constitutional monstrosity down our throats, thus creating the perverse incentives that lead to Forever 21’s decision.

And, to the extent that any of you seeing your hours cut voted for Barack Obama and the (Social) Democrats, blame yourselves, too.

Elections, as they say, have consequences.

via Bryan Preston

Footnote:
(1) And maybe their other costs, too, as their suppliers will likely have to meet Obamacare’s mandates and thus pass the costs along in the form of price increases.

(Crossposted at Sister Toldjah)


Shock and surprise: Diane Feinstein’s husband’s company lands big high-speed rail contract

April 26, 2013
"Train wreck"

“Train wreck”

Because, at nearly $35,000,000 per mile, they surely had to be the cheapest:

Out of the entire universe of those who could have won the first phase construction contract for California’s high speed rail boondoggle, who would stand out as the last person who would win it if there were no political patronage.

Put another way, who is the most likely person to win it if there is political patronage?

Both questions have the same answer: Richard Blum, the husband of California senator Diane Feinstein.

So, who won the contract? Blum, of course, as the principle owner of Tutor Perini, the lead firm in the three-firm consortium selected by the California High Speed Rail Authority.

Yes, Diane, it really does look that bad to us little people.

The group lead by Tutor Perini bid $985,000,000 to build the initial 29-mile stretch, roughly from Fresno to Madera, which doesn’t include the costs for electrification and land purchase. And, as Laer points out at Crazifornia, they started with this section because it’s the cheapest. (I can’t wait to see what the bids are to lay track through the mountain passes…)

I’m sure it’s just a coincidence that the principle owner of the company is husband to a powerful United States senator, who happens to be from the state building said rail system. I mean, it’s not as if there have been any allegations of self-dealing before.

I’m about as shocked as Louis was in Casablanca:

via Katy Grimes

UPDATE 01/30/2014: It appears Blum divested himself of Tutor-Perini stock in 2005, calling into question much of the Crazifornia article. The rail deal still stinks like a fish left out in the sun, however.

(Crossposted at Sister Toldjah)


#GunControl: Another firearms manufacturer stops sales in New York

February 20, 2013

Bit by bit, the reverse boycott of anti-Second Amendment states grows. This time, York Arms of Maine has said “You don’t like us? Well, the feeling is mutual.”

Based on the recent legislation in New York, we are prohibited from selling rifles and receivers to residents of New York.

We have chosen to extend that prohibition to all governmental agencies associated with or located within New York.

As a result we have halted sales of rifles, short barreled rifles, short barreled shotguns, machine guns, and silencers to New York governmental agencies.

For “civilian” customers residing in New York: At your choice, we will:

  • Complete your order and ship to a dealer of your choice outside of NY.
  • Refund your payment in full.
  • Hold your items here for up to 6 months, at no charge – if you are in the process of leaving NY and taking residence in another state.

For LE/Govt customers in New York: Your orders have been cancelled

Again, I don’t know how much business York does in New York, but it’s clear the the progressive gun-grabbers are crossing a line beyond which legitimate businesses and citizens concerned about their rights say “enough is enough.”

via Adam Baldwin

(Crossposted at Sister Toldjah)


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