Tuesday, September 10, 2013

Liberals Hate Job Creation

It is becoming more apparent that Liberals actually hate job creation. As if crafting fiscal policies that stifle economic growth and discourage job growth weren’t enough, they feel it is necessary to actively protest one of the few sectors of the economy that is actually growing: low paid, unskilled, retail and service jobs.

OUR Wal-Mart, an affiliate of the United Food and Commercial Workers International Union (UFCW), held a series of protests last week against Wal-Mart’s “unlivable” wages. Of course, hardly anyone showed up. (Although, compared to recent Organizing For America events it looked like a million man march.) According to David Tovar, Wal-Mart’s Vice President of Corporate Communications, less than one-tenth of the company’s 1.3 million employees took part in the “protests.” I guess that means there are potentially 50 new job openings at the retail giant.

The Wal-Mart walkouts (or . . . um . . . attempted walkouts) followed a recent series of protests aimed at shaming fast food restaurants into raising their hourly wages. Such demands, after all, make sense in the minds of Liberals: Of course a person flipping 99 cent hamburgers deserves $15 per hour!

But back to our point about Liberals hating job creation: According to the August Jobs report we have finally achieved something in the Obama-economy that has been elusive and evasive since the conception of Obamacare. . . Full Time positions were actually created! And in what sectors were these elusive full time positions created? In the “lowest paid” sectors. In other words: At Wal-Mart, McDonalds, etc.

Exactly the places the UFCW and other Lefties are picketing.

The trend highlights a disturbing trend in both American’s understanding of work, and the overall economic conditions of the good ole’ USA. It seems highly improbable that the majority of full time “low paid” positions are being given to up-and-coming entrants to the work force. In fact, it is seeming more likely as Obama’s great recovery drags on, with penetrative devastation to our economy, that skilled labor is having to settle for less than optimal employment opportunities.

And there is a reason that these low-skilled and low-paid jobs are offering full time employment: The low wage allows employers to appropriate excess capital to the required benefits that laws such as Obamacare will soon mandate. What the UFCW and leftists world-wide seem incapable of grasping, is the concept that such a low-paid job is not designed to be a career. A position at a Wal-Mart, or a McDonalds, should be a stepping stone to something greater. Such a position is not designed to produce a “livable” wage, because it is not designed as a lifelong pursuit, or a 40 year investment of time and labor. Such a position is, by its very nature, a position that should offer new entrants to the workforce an opportunity for experience and resume building. It should not be the ambition of any American to work as a hamburger flipper for fifteen years – regardless of their ability to earn a livable wage.

Unfortunately, in Obama’s America, the opportunities for career minded individuals seems to be diminishing. As firms engage in “temporary” hiring, “contract” hiring, and part time hiring, careers are slowly being turned into lucrative “jobs” that offer employees a resume enhancer while prepping them for very little. The once praised action of engaging in a lifelong career, is being slowly eradicated by Labor laws, Obamacare regulations, and the anemic “recovery” that looks an awful lot like a recession continued.

And now, as America struggles to produce some sort of real job market recovery, Leftists are choosing to picket the few employers that are unafraid to offer full time work – albeit at entry level wages.

It seems to merely be more proof that the Left hates Job creation. . . Or they have a fundamental ignorance of free market economics. Either option should disqualify their altruistic impulse to engineer our economy into their economic vision.



Create a job and be harassed by your government

“So, what did you do during your summer break?” If you happen to be a certain 12 year old boy from Pocatello, Idaho, you spent the summer being productive and successfully carrying on an entrepreneurial venture, and then experiencing your state government cracking-down on you for not being licensed and demanding a portion of your revenues.

The 12 year old son of Jason Weeks is who we’re talking about. Weeks’ son announced at the beginning of the summer that he wanted to acquire a motorcycle. Weeks had the good sense to tell his son to earn money and purchase one for himself. So the son took the father’s advice, and – presumably with some help from some adults – he launched a fruit stand, right near a Red Wings Shoe store in small town Pocatello.

But soon after Weeks’ son launched, the Idaho State Tax Commission lunged. “They confronted him first and he called me” Weeks told the Idaho State Journal newspaper. “It was the second day that my son was in business.”

According to Weeks and the local newspaper, the state is demanding payment for a 6% state sales tax that they claim should have been collected by the boy from cash paying customers that bought his raspberries. Weeks would not return my calls prior to the writing of this piece, but, without commenting specifically about the incident, the state tax commission acknowledges that it happened and notes that they have to enforce the law with everybody.

Americans everywhere should make note of this situation and learn from it. Lesson number one is that nobody should attempt to launch any sort of business in the United States without making certain that they are in full compliance with city, county, state and federal regulations. That’s a tall order, but that’s how costly it has become to do business in America.

Governments nationwide and at all levels are almost universally on the hunt for money, and many of them are broke. There is no limit to governments’ willingness to turn people upside down and shake cash out of their pockets, and they’ll even do it with children. (The Idaho state tax commission had a similar run-in with a 6 year old back in 2010!). If a business is being operated without the proper licensure and permitting requirements being met, and without proper taxation procedures in place, an operator no matter their age will likely be fined for being out of compliance, and fined retroactively for however long the non-compliance has been happening. Business owners, beware.

The other great lesson in this situation is to realize that we live in an era of abusive government. Agents of city, county, state and federal government often don’t know any limits to how they can and will exercise their powers over the lives of private individuals, and the cause of the problem is we, the people. With often less than 50% of the American population participating in U.S. presidential elections, voter turn-out for state and local elections is usually even smaller. Such ambivalence is emboldening to bureaucrats and politicians who have power and enjoy using it.

Abusive government won’t stop until Americans wake up and choose otherwise. Hopefully the young Mr. Weeks from Pocatello – and others in his generation – will someday choose more wisely than today’s adult population.



Medisave Accounts in Singapore

By John C. Goodman

In 1984, Richard Rahn and I wrote an editorial in the Wall Street Journal in which we proposed a savings account for health care. We called it a Medical IRA. That same year, Singapore instituted a related idea: a system of compulsory Medisave accounts. Through the years, my colleagues and I at the National Center for Policy Analysis have kept track of the Singapore experience, including publishing a general study of Singapore’s social welfare system in 1995 and a study of its health care system in 1996.

It’s taken about almost three decades, but all of a sudden Singapore has come to the attention of a lot of other policy wonks, including a book by Brookings, a whole slew of posts by Austin Frakt and Aaron Carroll, a good overview by Tyler Cowen, and lots of links in all of this to other studies and comments.

Before commenting on the commenters, let me jump to the bottom line, which was completely missed by Austin and Aaron, as well as some others: No, Singapore does not have a free market for health care. What it does have is an alternative to the European/American welfare state, in which private saving and private insurance do what employers and governments do in other countries. The Singapore philosophy is:

    Each generation should pay its own way.
    Each family should pay its own way.
    Each individual should pay his own way.

    Only after passing through these three filters, should anyone turn to the government for help.

If the United States adopted a similar approach to public policy, there would be no deficit problem in this country.

How the system works.

In Singapore, people are required to save for health care, retirement income, and other needs. They can use their forced saving to purchase a home, pay education expenses, and purchase life insurance and disability insurance. For individuals up to age 50, the required saving rate is 36% of income (nominally divided: 20% from the employee and 16% from the employer). Of this amount, 7 percentage points is for health care and is deposited in a separate Medisave account. Individuals are also automatically enrolled in catastrophic health insurance with a deductible of about US $1,172, although they can opt out. When a Medisave account balance reaches about US $34,100 (an amount equal to a little less than half of the median family income) any excess funds are rolled over into another account and may be used for non-health care purposes.

Some hits and misses by the commenters:

    A number of commentaries (including comments by Singapore officials) seem overly focused on the issue of whether health care should be delivered in free markets or in regulated markets. However, that has always been a secondary issue, if an issue at all. Medisave accounts are self-insurance, as distinguished from third-party insurance. They affect incentives on the demand side of the market, regardless of how capitalistic or socialistic the supply side is. The issue both in the United States and in Singapore is: can individuals be counted on to manage some of their own health care dollars in a responsible way, or does health care work better if all the dollars are controlled by third-party payers? This topic has generated extensive, heated debate in the United States ― ever since we formally proposed Health Savings Accounts in the early 1990s.

For example,Paul Krugman (who has almost a perfect record for getting everything wrong in health care) called HSAs a sop to the healthy and the wealthy. After three decades of experience, Singapore has shown the world (to the great consternation of the critics) that individual self-insurance works and it works well.
 There has been a lot of back and forth about whether Medisave accounts have reduced overall health care spending, including some commentary by William Hsiao, who seems to have forgotten the Econ 101 distinction between the income effect and the substitution effect. Anytime you force people to save for a consumption item and the savings rate for a lot of them is higher than what they were previously spending, total spending is going to go up. Duh. That’s the income effect.

But, money in the accounts belongs to the account holder and anything not spent in the current period rolls over and is available for future spending. Choosing between current and future spending is the substitution effect. So, compared to taxing people and giving the revenue to insurance companies to pay for first dollar coverage, of course spending is going to be lower than it would have been. How could it be otherwise?

    The most important thing Singapore has accomplished in health care (in contrast to all the other developed countries) is an enormous shift of money and power from the public to the private sector. Since 1984, the Singaporean government’s share of the nation’s total health care expenditure dropped from about 50% to 20%. When you stop to think about it, that’s incredible.

    Finally, the most important feature of Singapore’s overall approach to social welfare is that the country has found a rational way to provide services that are provided by ill-conceived social insurance programs in the rest of the developed world. As is well known, programs for the elderly have devolved into little more than legalized Ponzi schemes in the United States and throughout Europe. Governments everywhere have made promises of benefits they were unwilling to fund. So now they must either default on those promises or impose draconian taxes on the productive sector. Singapore has avoided that problem.


There is a  new  lot of postings by Chris Brand just up -- on his usual vastly "incorrect" themes of race, genes, IQ etc


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