Friday, December 06, 2013
Destroying entry level jobs and teen opportunity
Foolish push to hike minimum wages
By Rick Manning
Fast food restaurants will get the joy of having labor unions stage protests demanding an increase in their worker's wages and more than doubling the overall federal minimum wage this week.
Everyone wants to make more money, so what could go wrong?
Perhaps it would be wise to ask Food and Commercial Worker Union members in the Washington, D.C. area. These union members have priced themselves out of jobs as the consuming public is being trained to scan their own food items, cutting out the middle man. The union workers are so concerned about their dwindling numbers that they are threatening to strike on December 20th with a major complaint being that the implementation of self-scanning technology is eliminating their jobs.
Now the same Big Labor economic geniuses whose demands for ever increasing benefits and wages threaten the grocery clerks very existence are being equally helpful to entry level fast food workers. Workers who perform low skill functions for a minimum wage or just slightly higher.
At a time when Amazon has built a drone to deliver packages, and hopes to have them operational with full Federal Aeronautics Administration approval within four to five years, it takes little imagination in our current culture to see a fast food restaurant operating with very few personnel.
You punch your order in at a display screen, or in drive thru, Siri's younger, more advanced sister, takes your order showing you the results on the screen. You put your credit card or cash into the ATM like payment system and drive to the pick-up window where you get your food that comes out when sensors tell the machine you are in place to receive it. The food gets cooked by a series of machines that put the right patty on the grill, drop just the right amount of fries and automatically puts the appropriate soft drink cup under the right beverage. A lid is attached and your meal is delivered to you when you drive up.
The restaurant has next to perfect food cost controls, and a labor force that doesn't sleep in on Saturday or shut the restaurant fifteen minutes early because it is slow and they are bored.
Automakers build cars using very exact automation, is it so unreasonable to believe that a burger could be made similarly?
Yet, protestors are going to blithely march around fast food restaurants demanding wages that virtually guarantee mechanized product delivery, a result that has disastrous consequences.
Fast food restaurants are gateway jobs, and are not intended for the vast majority of people to be anything but that – entry level. This is a great thing.
Teens learn that they have to get to work on time both from getting pinged by their bosses, and by having to stay late due to the tardiness of a coworker. Teens learn about this FICA fellow who takes a bunch of their paycheck without their ever seeing a dime, and wonder how their $183.75 check for five, five hour days dwindled down to a mere $135. And most importantly, teens learn that money to go to the movies, pay car insurance and put gasoline in the car has to be earned by trading time, energy and effort in a value creating way.
The demand that these entry level wage jobs be transformed into "living wage" jobs changes this fundamental dynamic.
Those positions that do remain will be highly sought after by older, more experience people who never would consider a burger joint job, driving the stereotypically unreliable teen from taking their first step into the American economic workplace.
Already, our nation is seeing a destruction of opportunities for young Americans to enter the workforce which may be why almost two out of three teens aren't even trying to get a job in today's America.
Contrast this with teen expectations forty years ago. In 1973, the economy was terrible. Gas lines, oil embargoes, the economy reeling from the impacts of Nixon's wage and price controls, 1973 was a mess for those trying to get a job. Yet, more than half the teens were in the workforce and the Bureau of Labor Statistics reports that 46.9 percent of the teens aged 16-19 in October, 1973 were employed compared to 26.6 percent today.
When three quarters of your teens are not working either by choice or due to the lack of employment opportunities, something is dramatically wrong.
It would be foolhardy in the face of a youth unemployment crisis to destroy the very entry level jobs that young people depend upon to gain the work experience and basic workplace skills to survive and thrive moving forward.
While doubling the minimum wage sounds like a swell idea on its face, the impact on our nation's youth will be devastating.
It is time to just say no to those who would destroy our nation's entry level jobs under the mantle of doubling wages at fast food and other retailers. After all, those jobs are for our teen children.
Liberals Are Culture War Aggressors
Maybe someone can explain to me how, exactly, conservatives are the aggressors in the culture war? In the conventional narrative of American politics, conservatives are obsessed with social issues. They want to impose their values on everyone else. They want the government involved in your bedroom. Those mean right-wingers want to make "health care choices" for women.
Now consider last week's decision by the U.S. Supreme Court to consider two cases stemming from Obamacare: Conestoga Wood Specialties v. Sebelius and Sebelius v. Hobby Lobby Stores. Democratic politicians and their fans on social media went ballistic almost instantly. That's hardly unusual these days. But what's revealing is that the talking points are all wrong.
Suddenly, the government is the hero for getting deeply involved in the reproductive choices of nearly every American, whether you want the government involved or not. The bad guy is now your boss who, according to an outraged Sen. Patty Murray, D-Wash., would be free to keep you from everything from HIV treatment to vaccinating your children if Hobby Lobby has its way. Murray and the White House insist that every business should be compelled by law to protect its employees' "right" to "contraception" that is "free."
I put all three words in quotation marks because these are deeply contentious claims. For starters, the right to free birth control -- or health care generally -- is not one you'll find in the Constitution. And even if you think it should be a right, that is hardly a settled issue in American life.
The right to own a gun is a far more settled issue constitutionally, politically and legally in this country, but not even the National Rifle Association would dream to argue that we have a right to free guns, provided by our employers. If your boss were required to give you a gun, your new employer-provided Glock still wouldn't be free because non-cash compensation is still compensation. The costs to the employer are fungible, which means whether it's a pistol or a pill, the cost is still coming out of your paycheck -- and your coworkers' paychecks.
"Regular, predictable expenses such as birth control pills cannot be defrayed by insurance; they can only be prepaid, with a markup for the insurer's administrative costs," writes Bloomberg's Megan McArdle. "The extra cost is passed on by the insurers to your employer, and from your employer to you and your fellow workers, either by raising your contribution or lowering the wage they are willing to offer."
Last, birth control pills really aren't the issue. Both companies suing the government under Obamacare have no objection to providing insurance plans that cover the cost of birth control pills and other forms of contraception. What both the Hobby Lobby and Conestoga Wood Specialties object to is paying for abortifacients -- drugs that terminate a pregnancy rather than prevent one. (Hobby Lobby also opposes paying for IUDs, which prevent implantation of a fertilized egg.) The distinction is simple: Contraception prevents fertilization and pregnancy. Drugs such as "Plan B" terminate a pregnancy, albeit at an extremely early stage.
The plaintiffs in these cases aren't saying the government should ban abortifacients or make it impossible for their employees to buy them. All they are asking is that the people using such drugs pay for them themselves rather than force employers and co-workers to share the cost. In other words, Hobby Lobby and Conestoga Wood want such birth control decisions to be left to individual women and their doctors. Leave the rest of us out of it.
But leaving the rest of us out of it is exactly the opposite intent of the authors of Obamacare. The law forces not only arts and crafts shops but also Catholic charities and other religiously inspired groups to choose between fulfilling their mission or violating their values. You may have no moral objection to such things, but millions of people do. By what right are liberals seeking to impose their values on everyone else? Isn't that something they denounce conservatives for?
They could have allowed for plans that exclude controversial forms of birth control -- or even uncontroversial ones -- which would have lowered premium costs and expanded health care coverage to more poor people.
But Democrats wanted a wedge issue to drum up a new battle in the culture war -- a war in which liberals have always been the aggressors.
John Stossel gives below his idea of how to channel charitable giving. My rule is to give only to the end user, not to any middleman organization. My biggest gifts are to people I know -- JR
'Tis the season for giving. But when you give, do you know your money will help someone?
Social workers say, "Don't give to beggars." Those who do give are "enablers," helping alcoholics and drug users to continue bad habits. It's better to give to charities that help the "homeless." I put "homeless" in quotes because my TV producers have quietly followed a dozen of the more convincing beggars after "work," and all had homes.
Once, I put on a fake beard and begged for an hour. At the rate money was coming in, I would have made ninety bucks in an eight-hour day -- $23,000 per year, tax-free! I see why people panhandle.
Their success, however, means that people who give them money, no matter how good their intentions, are not engaging in real charity. Giving may make you feel better, but it doesn't make the world a better place.
So where should we give? Charity-rating services try to separate good charities from scams, but they get conned, too. The definition of "charitable work" is rarely clear. How should the board of a nonprofit's first-class hotel expenses during a trip to Africa be classified?
That's why I give to charities I can watch. I donate to The Doe Fund, a nonprofit helping to rehabilitate ex-convicts. I saw their "Men in Blue" working near my apartment -- cheerfully and energetically. I thought, "Whoever's rehabbing these guys is doing something right!" So I give money to them -- and to a couple other groups I can see.
Finally, I give more to charity because I'm not much of an entrepreneur. I don't have business-building skills. But for those who do, here's a novel idea: Don't give to charity.
Years ago, Ted Turner was praised for donating a billion dollars to the United Nations. He said he wanted to "guilt" other billionaires into giving more and told me Warren Buffet was "cheap" for giving too little.
At first, the idea makes sense. Billionaires have more than they need; merely chasing more profit seems selfish.
But giving it a second thought, I found a fallacy in Turner's argument. The U.N. is a wasteful bureaucracy, leading me to assume it squandered Turner's gift. Buffet, meanwhile, continued to direct his investors' money to growing companies. Based on Buffet's stock-picking success, his investments were probably a more productive use of capital than Turner's. Money went to people making better products, inventing better things, creating more jobs and so on. Maybe Buffet's stock picks are now funding the next Bill Gates.
Today, the real Gates spends his time giving money away. He's unusually conscientious about it. He experiments, funding what works and dropping what doesn't. His charity work saves lives. Good for him. But Gates was also unusually skilled at bringing people better software. Had he continued doing that at Microsoft, I bet the company would have been even more productive. And Gates would have done more for the world.
I tried that thought experiment on Turner, who, in turn, unclipped his microphone and walked off the set.
OK, so people who give away a billion dollars don't want to hear skepticism about their gift. But there's little doubt capitalism helps people more. Even rock star Bono from U2 has come to understand that. He used to call for more government spending on foreign aid. Now he says: "Aid is just a stopgap. Commerce, entrepreneurial capitalism take more people out of poverty."
Bingo. If Bono gets it, Turner should, too.
I applaud those who give to charity, but let's not forget that it's capitalists (honest ones, not those who feed off government) who do the most for the poor. They do more good for the world than politicians -- and more even than do-gooders working for charities.
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Posted by JR at 1:36 AM