California: SEIU demands increase in minimum wage, jobs be damned

April 16, 2015
"But at least we won the election! Obama!!"

“But at least we raised the minimum wage! Obama!!”

Fresno is fifth-largest city in California, the largest that’s not on the coast, and the largest in the Central Valley, that agricultural cornucopia that’s being destroyed by drought and environmentalist idiocies.

But don’t get me started on that.

Anyway, just by its position and population Fresno is important to the state’s economy, particularly our agricultural sector. (Where do you think your raisins come from?) But, like much of the Central Valley, it’s suffered more than the rest of California from the 2008 recession and the pathetic recovery: unemployment in the Fresno area in 2014 was still over 11%, well above California’s statewide average of 7.1% at the end of that year.

So, when your city is suffering from a lack of jobs, what’s the first thing you think of to increase opportunities for work?

That’s right! You demand an increase to the cost of labor!

On Wednesday, according to the Fresno Bee, over 150 people joined other workers around the country marking Tax Day by marching in rallies organized by unions as they demanded the current federal minimum wage of $7.24 an hour be raised, as well as the California $9 minimum wage.

Standing in front of a McDonald’s, the protesters–comprised of home and child care workers, county and state workers, students and community leaders, but no fast-food workers–chanted, “Hold the burgers, hold the fries. Make our wages super-sized.”

Union members from the Services Employees International (SEIU) helped lead the way; one member, Beau Reynolds with SEIU Local 100, told the Bee, “We’re here to stand up. We’re here to join forces and we are here to demand better. To demand better wages, to demand better benefits and to demand the right and respect that all working families deserve.”

Notice that none of those protesting in front of McD’s actually work there: they’re just there in service of SEIU’s political goal, which is to get a general increase in the minimum wage, which would include the union’s members, leading in turn to higher dues-revenues for the union to spend on politics. (And union bosses’ salaries…)

But the fast-food workers on the inside? The ones inside who didn’t march, the supposed beneficiaries of SEIU’s fight for economic justice? Apparently they know what happens when you raise labor costs too high:

Welcome to the future

Welcome to the future

In other words, when government raises the cost of doing business —and labor is a cost!— business owners have just a few choices: pass the cost to the consumer and risk losing their custom; reduce profits to perhaps unacceptably low levels; reduce labor costs by cutting back hours, letting people go, and not hiring; or just getting out of the business. They’re already learning this in progressive Seattle, and it looks like the Fresno McDonald’s workers understand basic economics, too, unlike SEIU.

Or maybe SEIU just doesn’t care that fast food workers can be replaced with kiosks, as long as they themselves get their cut.

Either way, they’re not helping Fresno county’s unemployment problem.

(Crossposted at Sister Toldjah)


Aussie Renewable Target: Everyone Gets an Exemption

October 9, 2014

Phineas Fahrquar:

Sounds like Obamacare: if so many exceptions are needed, maybe the law itself is the problem. In this case –say it after me– fighting a problem that does not exist. Only, in this case, the Green Let’s self-indulgence is costing real people real jobs.

Originally posted on Watts Up With That?:

exempt-scrabbleEric Worrall writes – The increasingly farcical Australian Renewable Target just took another body blow today, with mounting pressure on the Labor Party, from Aluminium Industry union delegates, to exempt yet another industry from green energy tariffs.

According to The Australian, a major Aussie daily newspaper;

“THE Australian Workers Union has called for the aluminium ­industry to be exempted from the renewable energy target, a move that will increase pressure on Labor to negotiate a bipartisan deal with the Coalition on changes to the scheme. AWU national secretary Scott McDine warned that the RET maintained in its current form would lead to thousands of jobs shifting overseas with no ­environmental gain.”

http://www.theaustralian.com.au/business/powering-australia/awu-joins-bid-for-renewable-energy-target-reform/story-fnnnpqpy-1227060838447

The main domestic political opposition to Aussie Prime Minister Tony Abbott’s dismantling of carbon pricing and job destroying environmental laws, is a coalition of Greens and Labour in the Australian Federal Senate. But the uncertain Aussie jobs market…

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Nation’s Leader Rejects Keynesian Economics, Acknowledges that Real Jobs Are Created by the Private Sector

October 3, 2014

Phineas Fahrquar:

It’s Finland, sadly, not the US. We can only hope that, in the next administration, the idea of capitalism will catch on… in the USA. :/

Originally posted on International Liberty:

You’re probably surprised by the title of this post. You may even be wondering if President Obama had an epiphany on the roadto Greece?

I don’t mean to burst your bubble, but the leader we’re talking about isn’t the President of the United States.

Instead, we’re talking about the Prime Minister of Finland and he deserves praise and recognition for providing one of the most insightful and profound statements ever uttered by a politician.

He explained that the emperor of Keynesian economics has no clothes.

As reported by Le Monde (and translated by Open Europe), here’s what Alexander Stubb said when asked whether European governments should try to “stimulate” their economies with more spending.

We need to put an end to illusions: it’s not the public sector that creates jobs. To believe that injecting billions of euros [into the economy] is the key to growth is an idea…

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Progressive victory: since 2008, Illinois has created more food-stamp recipients than jobs

September 16, 2014

seal of Illinois

Another mile-marker on the road to state financial collapse, courtesy of the Big Government Liberalism:

Illinois’ sluggish jobs recovery is coming at a tremendous cost. For every post-recession job created in Illinois, nearly two people have enrolled in the Supplemental Nutrition Assistance Program, commonly known as food stamps.

In the recession era, the number of Illinoisans dependent on food stamps has risen by 745,000. Without adequate job creation in the state, Illinois families have had no choice but to depend upon food stamps to put bread on the table.

The Prairie State has had the worst recovery from the Great Recession of any state in the U.S. There are nearly 300,000 fewer Illinoisans working today than in January 2008, and 170,000 fewer payroll jobs.

This couldn’t be the result of a decades-long toxic mix of progressive government and Big Labor exploiting the heck out of taxpayers and creating a corrupt, over-regulated mess that has the most productive people and companies fleeing the state, could it?

Nah. What happened in Detroit was mere coincidence.

Scary thing is, California isn’t all that far behind them.

via… Someone on Twitter. Sorry, lost the link.


Canada pulls the plug on the U.S. Keystone Pipeline – will send oil to Asia

June 29, 2014

Phineas Fahrquar:

This makes me so mad, I could chew nails. Tens of thousands of good jobs lost, a needed economic boost from cheap oil thrown away. Heckuva job, Greens.

Originally posted on Watts Up With That?:

Approves Asia Supply Route, Ignores US Route

H/T Eric Worrall and Breitbart – Obama’s inability to make a decision on Keystone has finally yielded a result – Canada has made the decision for him.

Breitbart reports Canada has just approved the Enbridge Northern Gateway Project – a major pipeline to ship Canadian oil to Asia.

The Canadian oil will still be burnt – in Asia, instead of America.

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Seattle approves $15 minimum wage, higher unemployment

June 3, 2014
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Seattle minimum wage proponent

I wrote about this last week, when it was still just a proposal, noting how some businesses were already slowing hiring and moving out of the city, and how even progressives were coming to have second thoughts.

Well, they did it:

Seattle’s city council on Monday unanimously approved an increase in the city’s minimum wage to $15 an hour, making it the nation’s highest by far.

The increase was formally proposed by Seattle Mayor Ed Murray, and his spokesman said he intends to sign the ordinance on Tuesday.

Washington already has the nation’s highest state-level minimum wage, at $9.32. That rate also applies to the city.

The current federal minimum wage is $7.25, and Democrats in Congress have been pushing for a gradual increase to $10.10, but so far to little effect.

The increase to $15 in Seattle will take place over several years based on a scale that considers the size of and benefits offered by an employer. It will apply first to many large businesses in 2017 and then to all businesses by 2021.

The first increase, on April 1, 2015, brings the minimum wage to $10 for some businesses and $11 for others.

While the law phases in increases starting only with “large businesses,” that designation includes franchises. In other words, if you’re a franchisee with only a couple of Taco Bells, you’re still considered a large employer because you’re part of a large chain; even though your revenue only comes from two locations, you’re still on the hook for $15 per hour starting in 2017. You’re welcome.

This is going to be a good experiment (and, dare I say it? A “teachable moment?”) for several reasons. Advocates of raising the wage say it’s only fair, that minimum wage earners aren’t paid enough to live on, and that the costs to society will be minimal as businesses adjust. And there is some little evidence for the latter, as we have indeed learned to live with the costs previous minimum wage increases. (Whether those wage increases have been worth the costs, however, is another argument for another time.) Advocates in Seattle argue that raising the wage will help around 100,000 people.

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. We’ve already seen in the Seattle case that some businesses are moving to nearby towns that have not raised their wage. And, here in California, where the wage was recently raised to $9 per our and there is a proposal to raise it statewide to $13, some businesses are closing, choosing to put their capital to work where they can get a better return on investment. In each case, these are jobs lost.

Critics also maintain that raising the cost of labor gradually prices out the unskilled, such as teens looking for their first jobs, where they can acquire valuable skills and habits for later, better-paying work. A very interesting piece at AEI (h/t Andrew Garland in the Sister Toldjah comments section) argues for this very point by examining the effects on teen hiring as the minimum wage rose 41% between 2007 and 2009:

And that’s exactly what happened when the minimum wage rose by 41% between 2007 and 2009 – it had a disastrous effect on teenagers. The jobless rate for 16-19 year olds increased by ten percentage points, from about 16% in 2007 to more than 26% in 2009.  Of course, the overall US jobless rate was increasing at the same time, from about 5% to 10%. Therefore, the graph attempts to better isolate the effects of the minimum wage increases between 2007 and 2009 on teenagers by plotting the difference between the teenage jobless rate and the overall jobless rate, i.e. “excess teen unemployment,” and the minimum wage.

During the 2002-2007 period when the minimum wage was $5.15 per hour, teenage unemployment exceeded the national jobless rate by about 11% on average. Each of the three minimum wage increases was accompanied by a 2 percentage point increase in the amount that the teenage jobless rate exceeded the overall rate, from 11 to 13% after the 2007 increase from $5.15 to $5.85 per hour, from 13% to 15% following the second hike to $6.55 per hour, and from 15% to 17% following the last increase to $7.25. The 17.5% “excess teen unemployment” in October 2009 was the highest on record, going back to at least 1972, and was almost 5 percent higher than the peak teen jobless rate gap following the last recession (12.7% in June 2003).

Bottom Line: Artificially raising wages for unskilled workers reduces the demand for those workers at the same time that it increases the number of unskilled workers looking for work, which results in an excess supply of unskilled workers. Period. And another term for an “excess supply of unskilled workers” is an “increase in the teenage jobless rate.”

It will be interesting and edifying how Seattle’s experiment in progressive labor law plays out. I suspect it won’t have nearly the benefit that advocates like Seattle Mayor Murray or California State Senator Leno predict.

And it’s a shame others have to suffer for their hubris.

RELATED: This Center for Freedom and Prosperity video provides a good overview of why minimum wage laws are job killers.

(Crossposted at Sister Toldjah)


California Senate passes $13 minimum wage, jobs flee in terror

June 1, 2014
"But at least we won the election! Obama!!"

“But at least they raised the minimum wage!”

Perhaps they didn’t want to be left behind by their progressive friends in Seattle, but the California State Senate last Wednesday passed a bill that would raise the minimum wage to $13 per hour by 2017. From the legislative analyst’s summary:

SB 935, as amended, Leno. Minimum wage: annual adjustment.

Existing law requires that, on and after July 1, 2014, the minimum wage for all industries be not less than $9 per hour. Existing law further increases the minimum wage, on and after January 1, 2016, to not less than $10 per hour.

This bill would increase the minimum wage, on and after January 1, 2015, to not less than $11 per hour, on and after January 1, 2016, to not less than $12 per hour, and on and after January 1, 2017, to not less than $13 per hour. The bill would require the automatic adjustment of the minimum wage annually thereafter, to maintain employee purchasing power diminished by the rate of inflation during the previous year. The adjustment would be calculated using the California Consumer Price Index, as specified. The bill would prohibit the Industrial Welfare Commission (IWC) from reducing the minimum wage and from adjusting the minimum wage if the average percentage of inflation for the previous year was negative. The bill would require the IWC to publicize the automatically adjusted minimum wage.

The bill would provide that its provisions not be construed to preclude the IWC from increasing the minimum wage to an amount greater than the calculation would provide or to preclude or supersede an increase of the minimum wage that is greater than the state minimum wage by any local government or tribal government.
The bill would apply to all industries, including public and private employment.

(h/t California Political Review)

“Leno” is Senator Mark Leno, whose district includes, naturally, San Francisco. You can kind of guess his politics. (He also backed a bill allowing children to have more than two parents. Yes, you read that right.) He’s also a prime example of Thomas Sowell’s observation about politicians who don’t have to suffer the consequences of decisions they impose on others. In this case, causing the cost of labor to skyrocket forces business owners to decide whether to pass on the cost to consumers, cut workers’ hours or whole jobs, or go out of business. As the head of CKE Restaurants told CNBC, people are doing all three:

CKE Restaurants’ roots began in California roughly seven decades ago, but you won’t see the parent company of Carl’s Jr. and Hardee’s expanding there much anymore.

What’s causing what company CEO Andy Puzder describes as “very little growth” in the state?

In part it’s because “the minimum wage is so high so it’s harder to come up with profitable business models,” Puzder said in an interview. The state’s minimum wage is set to rise to $9 in July, making it among the nation’s highest, and $10 by January 2016.

In cities in other states where the minimum wage has gone up considerably, Puzder said “franchisees are closing locations” after riding out lease expirations.

If the federal minimum hourly pay shoots up to $10.10 from the current $7.25—as many lawmakers and President Barack Obama are advocating—Puzder predicts fewer entry-level jobs will be created. If this happens, CKE would also create fewer positions, he forecast.

A recent nonpartisan Congressional Budget Office study also predicted mass job losses, estimating that a hike to $10.10 could result in a loss of about half a million jobs by late 2016, even as it lifted many above the poverty line.

(h/t California Political Review)

For some reason, I don’t think those who lose their jobs because of the wage increase will see themselves as “lifted out of poverty.”

Minimum-wage jobs are not meant to be lifelong careers. For people just entering the labor market, they’re ways to acquire skills needed to move on to better-paying jobs. For others, they’re a means to bring in additional, supplementary income into the household. The pro-increase arguments distort facts and wrap them in myth, all to disguise what is really a wealth redistribution program.

CKE’s Puzder goes on to relate how, when minimum wage increases are combined with the added expenses imposed by Obamacare, franchisees have chosen not to open new restaurants or have even closed locations, meaning these are jobs lost. But they do it because they can get a better return on their investment money elsewhere, such as by putting it in bonds.

It’s called economic common sense, something Senator Leno and his colleagues are woefully lacking in.

PS: SB 935 has now gone to the Assembly, and I will be shocked if it doesn’t pass. It’s frightening to think we have to rely on Governor Brown to be the sane one in the room and veto this bill when it shows up on his desk.

(Crossposted at Sister Toldjah)


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