There Is A Certain Amount Of Irony In This

The political left spends a lot of time complaining about income inequality. They place the blame for that on CEO’s of large companies that are compensated well. Yes, CEO’s are compensated well. They also work a lot of hours a week and have spent a lot of time getting the education that qualifies them for the job they hold. But somehow, they are the villains that are responsible for wage inequality. Well, we have another villain,

The Washington Free Beacon posted an article yesterday about the compensation paid to union officials.

The article reports:

Leading union officials earned an average salary of $252,370 in 2016, outpacing the average salary of private sector chief executives, according to a new report.

The Center for Union Facts compiled the salary information from federal labor filings of 192 of the largest national, state, and local unions. The report found that labor presidents enjoyed nearly a $60,000 advantage over the take-home pay of the nation’s business leaders, who earned an average of $194,350, according to the Bureau of Labor Statistics.

The average compensation of union officials, which includes salary and other perks, was $283,678, according to the report.

One of the complaints of the unions is the ratio of the average CEO’s salary versus the wages of the average worker.

The article further notes:

Airline Pilots Association President Timothy Canoll was the highest-paid union official, according to the federal data. He earned total compensation of $775,829 with a base salary of $526,292. The union, which is a member of the AFL-CIO, gave Canoll about $250,000 in perks in addition to the take-home pay, including $24,000 in allowances and $29,000 in official business expenses, such as meals and entertainment. He was given $196,534 in compensation classified as “Other.”

The claim of wage inequality is bogus to begin with. Like it or not, people are paid according to the scarcity of their skills and their value to a company. It is also noteworthy that somehow when the discussion of wages comes up, athletes, and movie starts are not generally mentioned. How much do they make in relation to the wages of the people who work for them?

Wage inequality is a fake issue, and the hypocrisy of those on the political left regarding union executive wages makes that very obvious.

Sometimes Reality Is Just Not Fun

The Service Employees International Union (SEIU) is known for its fight for a $15 minimum wage for fast food workers. The union chooses to ignore the fact that these are entry-level workers learning the basics of holding a job–showing up on time, being conscientious, treating people with respect, etc. Recruiting these people into the SEIU provides a larger base for union dues (and bigger donations to Democratic candidates), but where has the battle gotten the workers?

Ed Rensi posted an article at Forbes on Tuesday talking about the consequences of the push for a $15 minimum wage for fast food workers.

The article points out a few of the unintended consequences:

Let’s start with automation. In 2013, when the Fight for $15 was still in its growth stage, I and others warned that union demands for a much higher minimum wage would force businesses with small profit margins to replace full-service employees with costly investments in self-service alternatives. At the time, labor groups accused business owners of crying wolf. It turns out the wolf was real.

Earlier this month, McDonald’s announced the nationwide roll-out of touchscreen self-service kiosks. In a video the company released to showcase the new customer experience, it’s striking to see employees who once would have managed a cash register now reduced to monitoring a customer’s choices at an iPad-style kiosk.

…Of course, not all businesses have the capital necessary to shift from full-service to self-service. And that brings me to my next correct prediction–that a $15 minimum wage would force many small businesses to lay off staff, seek less-costly locations, or close altogether.

…The out-of-state labor groups who funded these initiatives aren’t shedding tears over the consequences. Like their Soviet-era predecessors who foolishly thought they could centrally manage prices and business operations to fit an idealistic worldview, economic reality keeps ruining the model of all gain and no pain. This brings me to my last correct prediction, which is that the Fight for $15 was always more a creation of the left-wing Service Employees International Union (SEIU) rather than a legitimate grassroots effort. Reuters reported last year that, based on federal filings, the SEIU had spent anywhere from $24 million to $50 million on the its Fight for $15 campaign, and the number has surely increased since then.

This money has bought the union a lot of protesters and media coverage. You can expect more of it on November 29. But the real faces of the Fight for $15 are the young people and small business owners who have had their futures compromised. Those faces are not happy ones.

I suspect that over time many of the businesses involved would have switched to kiosks anyway, but the drive for $15 an hour definitely helped speed up the process. The fact that the SEIU was able to gather (or pay) protestors and that the news covered this story in a positive light is evidence that we are not teaching people basic economics in school. Somehow we have lost sight of the fact that businesses are in business to make a profit. When businesses are no longer profitable, they go out of business. In this case even the businesses that could afford to automate cut back on their workforce because of increasing labor costs. This is another example of shortsightedness on the part of the unions and of the law of unintended consequences.

Hoisted On Their Own Petard?

Yesterday the Los Angeles Times reported that Los Angeles labor leaders, who recently supported a minimum wage increase approved last week by the Los Angeles City Council, are now asking for changes in the law that would exempt companies whose workforces are unionized.

The article reports:

For much of the past eight months, labor activists have argued against special considerations for business owners, such as restaurateurs, who said they would have trouble complying with the mandated pay increase.

But Rusty Hicks, who heads the county Federation of Labor and helps lead the Raise the Wage coalition, said Tuesday night that companies with workers represented by unions should have leeway to negotiate a wage below that mandated by the law.

“With a collective bargaining agreement, a business owner and the employees negotiate an agreement that works for them both. The agreement allows each party to prioritize what is important to them,” Hicks said in a statement. “This provision gives the parties the option, the freedom, to negotiate that agreement. And that is a good thing.”

Laws for thee, but not for me. If a unionized company can be exempt in order to stay in business, why can’t a non-unionized restaurant be exempt?

The Council voted to raise the minimum wage to $15 an hour by 2020. The increase in the minimum wage will be a problem for both restaurants and fast food places. The increase will also pose a problem for other small businesses.

Looking Past The Obvious

On Monday, the New York Post posted an article about the push to move the minimum wage to $15 an hour. Contrary to what is true in most case, it isn’t about the money.

The article reports:

A Times editorial last week cheered Los Angeles’ enactment of a $15-an-hour minimum wage — but noted that restaurants, particularly fast-food joints, don’t like it. Said The Times: “The restaurant industry . . . will not go down without a fight.”

We didn’t think that bringing down an entire industry was what the campaign for a $15 minimum was supposed to be about. Oops.

Back in March, we noted that a similar hike in Seattle’s minimum wage was leading to a spate of local restaurant closings, given that labor costs account for 36 percent of the average restaurant’s earnings.

The left has been on a war against McDonald’s for years. I will admit that I do not routinely eat at McDonald’s (although I love their mango smoothies), but that is my choice–just because I don’t eat there doesn’t mean that I have the right to prevent anyone else from eating there.

The article cites one example of the impact of the minimum wage hike:

Case in point: Z Pizza, which has to shut down — putting all 11 employees out of work — because its owner can’t afford the higher labor costs. Ritu Shah Burnham says she tried layoffs, cutting hours, price hikes and not paying herself — to no avail.

And while small businesses have six years to phase in the wage hikes, she has only two, since she’s a franchise of a large chain.

The Times dismissed such concerns, saying minimum-wage hikes can be offset by higher prices and by “paying executives and shareholders less.”

That didn’t work for Burnham, who has no shareholders and is no executive — just a victimized small-business owner whose workers’ hourly wage is about to be cut to zero, thanks to their “advocates.”

It is time to send all of the big government types home. The only way to turn this around is to elect people at all levels of government who believe in freedom from excessive government regulation. The big government types are killing small business, and thus, killing the economy.

From The Young Conservatives Website

The following cartoon is from the Young Conservatives website:

branco min wage cartoon

The article below the cartoon states:

A survey of American economists found that 90 percent of them regarded minimum wage laws as increasing the rate of unemployment among low-skilled workers. Inexperience is often the problem. Only about two percent of Americans over the age of 24 earned the minimum wage.

Advocates of minimum wage laws usually base their support of such laws on their estimate of how much a worker “needs” in order to have “a living wage” — or on some other criterion that pays little or no attention to the worker’s skill level, experience or general productivity. So it is hardly surprising that minimum wage laws set wages that price many a young worker out of a job.

Support of an increase in the minimum wage is political–it is  not based on economic realities. Unions support it because it allows them to negotiate for higher wages. Eventually this cycle leads to inflation and hurts low-income wage earners the most.

Looking Behind The Economic Numbers

Breitbart.com posted an article today the current state of the American economy. The article points out that the current stated unemployment rate of 6.1 percent does not tell the whole story.

The article reports:

Only about half of the drop in the adult participation rate may be attributed to the Baby Boom generation reaching retirement age. Lacking adequate resources to retire, a larger percentage of adults over 65 are working than before the recession.

Many Americans who would like full time jobs are stuck in part-time positions, because businesses can hire desirable part-time workers to supplement a core of permanent, full-time employees, but at lower wages. And Obamacare’s employer health insurance mandates will not apply to workers on the job less than 30 hours a week.

The article also mentions the fact that many of our young people are being encouraged by colleges to obtain degrees in subjects that are of limited value in the workplace. These students graduate with massive debt and no marketable skills.

The article concludes:

New business regulations, more burdensome than are necessary to accomplish legitimate consumer protection and environmental objectives, exacerbate these problems.

All of this suppresses wages except for the most skilled and talented workers.

No surprise, average family income, adjusted for inflation has fallen from about $55,600 in 2007 to $51,000 even as the gap between families at the bottom and top widens.

It’s time for a new economic policy for America.

You Really Do Have Less Money To Spend

CNS News reported today that the real median earnings of men and women have decreased 3.2 percent since President Obama took office in January 2009.The data was released today by the Bureau of Labor Statistics.

The article reports:

When Obama took office in the first quarter of 2009, median weekly earnings for full-time wage and salary workers was $344. At that time, the median weekly earnings for men were $384 and the median weekly earnings for women were $304.

Thus, overall real median weekly earnings dropped by $11 between the first quarter of 2009 and the third quarter of 2013 (from $344 to $333). That is a real decline of 3.2 percent.

Men’s real median weekly earnings have dropped $16 dollars since Obama took office (from $384 to $368). That is a real drop of 4.2 percent.

Women’s real median weekly earnings have dropped $2 since Obama took office (declining from $304 to $302). That is a real drop of 0.66 percent.

We really cannot afford too much more hope and change.

 

.

Enhanced by Zemanta