The media coverage for the Detroit bankruptcy promotes Governor Snyder’s plan to default on Detroit debt and pension contracts by repeating the debt total over and over. Detroit has debt of $18 billion, $18 billion, $18 billion. Repeating the amount helps dramatize the notion there is no choice except to yield to terms handed down by a Federal Bankruptcy judge after considering proposals from an appointed city manager.
The state legislature of Michigan has the authority to govern every square inch of the state that includes Detroit. All states define and delegate their authority to govern the cities in carefully written enabling legislation, and also for all other sub state units of government. State legislatures grant authority to tax, borrow and spend and they can change it or take it away, anytime they want.
When there is no hope that a private company will ever be able to pay creditors, companies can expect to be dissolved and disappear in a bankruptcy. The state of Michigan and the city of Detroit cannot disappear and the state always has taxing authority that assures it can raise revenue to pay its bills. Michigan is not bankrupt.
After some delay Mayor Gray of the District of Columbia decided to veto the Large Retailer Accountability Act that raised the minimum wage to $12.50 an hour for large retailers, where large retailers are part of a company with revenue over $1 billion per year that occupy more than 75,000 feet of retail space. In his veto message he cited all the dreary and sinister doctrine of economists: high wages hurt employment and so on. His veto message ignored wage data and retail employment in the District.
As of 2012 the District has only 19 thousand jobs in retail or 2.5 percent of total employment where all other states have 11 to 12 percent. The District is underserved in retail and ripe for expansion.
Even though the minimum wage is $8.25 an hour there are no jobs in the District with a median wage as low as $8.25 an hour. Nor does the Bureau of Labor Statistics wage report for the District show 25th percentile or 10th percentile wages as low as $8.25 an hour for any of 512 occupations reported for Washington DC.
Recently the Obama Administration announced the time has arrived to appoint an Independent Payment Advisory Board as part of its duties under the Affordable Care Act. The legislation gives the advisory board authority to change Medicare reimbursements for doctors and determine new ways to deliver quality health care.
An article about the 15 member board in the Washington Post [Experts not lining up to sit on health-care cost-cutting panel, 1-29-13] describes the difficulty finding qualified people to serve on the board. The salary will be $165,300 to each member for full time work on the board, but many quotations from concerned officials explain the salary is too low to find qualified people. These officials worry that qualified people have better opportunities, but I can already tell them changes to Medicare reimbursements to doctors will not control costs or help American Health Care.
The flaws in health care go much deeper than reimbursements.
I recently saw Detropia, a new independent film making the rounds of America’s many film festivals. Detropia is a film of contrasts. As viewers we see the advanced decay of Detroit in panoramic views, but also up close as the camera wonders through ruined buildings and abandoned neighborhoods where the grass grows like waving wheat and few homes remain. Some views show summer scenes in colors galore that contrast with winter scenes of falling snow on somber gray streets, and a forlorn walker bundled against the cold. Shots of bulky and abandoned commercial and public buildings moldering in the sun add to the sense of loss. I thought I saw shots of the ruined Michigan Central railroad depot where I used to go with my parents and brother to pick up our grandmother on her visits long, long ago.
The misery of Detroit in pictures contrast with a selection of Detroiters we meet in between, and sometimes along with, the visual images. We meet a former teacher who now runs Raven Lounge, the head of U.A.W. local 22, a starving artist and a few more. They all express a gritty determination to stay and make Detroit revive. These are not a Pollyannaish bunch, they have an edge of cynicism and regret, but they are hometown Detroiters and they will stay and keep an eye on the main chance.
Along the way we meet the mayor, former basketball star Dave Bing, whose words and demeanor conveys good will. His city is broke with the loss of the automobile industry and over half its population, but it apparently has nearly 40 square miles of empty land, which he recognizes as a resource. He announces a plan for urban gardening on the empty land. Later when the camera flashes to a residential front porch we find three weary and dubious gents having an eye-rolling laugh at the mayor’s expense. They wonder if people will want to steal their tomatoes in the new agricultural economy of Detroit.
On April 30, 2012 the associated press wrote a story titled “Move to kill planned rules on child farm labor draws criticism.” The article tells readers the Obama administration has abandoned a proposal to restrict the use of child labor on dangerous farm jobs. Restrictions for 16 year olds banned them from operating power driven farm machinery especially tractors, working at heights to protect against falls, and from castrating farm animals. Other limitations among 15 new rules banned 18 year olds from working in grain silos, feet lots and stock yards. Exemptions allowed exclusion for children working on their parent’s farm.
Proponents argued that four times more children are killed while performing farm work than those in all other industries combined. Republican opponents called the plan “impractical, heavy-handed regulation that ignored the reality of small farms.” Democrat Al Franken from a farm state offered his opposition. Sarah Palin chimed in from her Facebook page with her own apocalyptic worry: “If I wanted America to fail, I’d ban kids from farm work.” Gee?
The American Farm Bureau waxed sentimental because “the new prohibitions would upset traditions in which many children work on farms owned by uncles, grandparents and other relatives to reduce costs and learn how a farm operates.
On April 2nd a year ago I wrote a 600 word piece on Wisconsin Jobs through 2010. At the time Governor Walker delighted attacking and taunting state employees, but I recall part of his taunt was “I will create jobs in the private sector.” In 2010 the monthly average of statewide jobs was down 15.3 thousand from 2009. In 2011 the monthly average of statewide employment was up 11.9 thousand from 2010, not enough to replace the prior year’s losses and still 93 thousand jobs below the statewide average for 2000.
The 2011 Wisconsin increase was 40th of the 50 states and the District of Columbia. An increase of 11.9 thousand new jobs is an annual growth rate of .44 percent, less than half the national average. Alabama, Mississippi and Arkansas actually lost jobs as did Missouri and Montana, but none of the losers have as many jobs as Wisconsin. Utah with only 1.2 million statewide jobs managed to create more than 25 thousand new jobs. For a state like Wisconsin with 2.7 million jobs the 2011 increase was measly at best.
In the national economy three sub sectors of durable goods manufacturing in fabricated metals, machinery and automobiles generated a little over 200 thousand new jobs. Wisconsin was able to ride the wave of national increase by picking up 11 thousand durable goods manufacturing jobs with 9 thousand of the jobs in fabricated metals and machinery. Other manufacturing in Wisconsin nudged upward but with barely a thousand new jobs.
Although the 1928 [presidential] election was a portent for the future, its contemporary significance for labor lay in the fact that [presidential candidate Herbert]Hoover and the Republican Party scored a signal victory. This could not have occurred unless many workers had voted for Hoover, and their willingness to do so is suggestive of their social outlook at the end of the twenties.
Observers were struck with the materialism that permeated all levels of American society, including labor; workers shared with their bosses a devout reverence for the almighty dollar. In Middletown [Ohio] workmen derived little satisfaction from their work. “There isn’t twenty five per cent of me paying attention to the job,” a bench molder stated. Since this frustration was linked to a dim prospect for advancement as workers, the more energetic strove to enter the middle class. The acquisition of money was the main objective of life, and people were measured by the externals money bought – where they live, how they lived, the make of car they drove. In the shops, workers were more concerned with maximizing income than with learning skills or gaining leisure by shorter hours.
From Irving Bernstein, The Lean Years: A History of the American Worker 1920 to 1933, (Boston: Houghton Mifflin Company, 1960), page 80-81.
In Virginia the state legislature is redrafting work rules to reduce teacher protections for the state’s public school teachers. The title on one of several Washington Post articles reads “House votes to end tenure-related job protections for teachers.” The governor and the legislature continue to offer false propaganda to make political points because there are NO teacher protections for Virginia teachers.
The state of Virginia goes beyond Federal right-to-work rules and bans public sector unions, which makes it impossible for teachers to have any ability to negotiate contracts or contract rights. Local media reports that suggest teachers “receive ‘continuing contracts’ which guarantee due process hearings before they are dismissed” are false. There are NO due process rights for teacher contracts in Virginia.
Virginia principals have unchecked authority in decisions to remove faculty. While principals are expected to comply with human resource evaluation procedures to perform and write up teacher evaluations there is no avenue of protest and appeal outside of school system full time personnel. A hierarchy of reviews and conferences only goes as far as the human resources department. No disinterested parties need be consulted.
Wal-Mart has spawned a cottage industry in books and articles about Wal-Mart stores and what’s wrong with them for America. Discussion varies among many topics but low wages and high turnover get plenty of attention. Allow me to quote from a 2009 addition to the list of Wal-Mart books: the Retail Revolution by Nelson Lichtenstein. note(1) A Wal-Mart exec is quoted: “It’s hard to believe but turnover drops millions of dollars to the bottom line in cost savings for the company. When an experienced associate leaves the company he or she is replaced by an entry level associate at a lower wage. Turnover of associates, for this reason, actually appears from an expense standpoint, to be a competitive advantage.”
Nearly ten million people work as cashiers, retail salespersons, and first line supervisors/managers of retail sales workers. More than 80 percent of these three jobs are in the retail sector. Together they make up 6.8 percent of America’s jobs in 2010. (2)
The effect on wages from high turnover varies by occupation and industry. In the retail industry high turnover generates a specific pattern of wage compression for jobs like cashier and retail salesperson: lower wage employees replace higher wage employees. The pattern is not unique to Wal-Mart, but given its size, employment totals and the admission that turnover helps profit, it is a specific pattern of wage changes that deserves the title, Wal-Mart Effect.
The most extraordinary phenomenon of the present time, the most incalculable in its after effects, the most menacing in its threat of immediate consequences, and the most alluring in its possibilities of ultimate good, is the unprecedented revolt of the rank and file. ...
The common man, forgetting the old sanctions, and losing faith in the old leadership, has experienced a new access of self-confidence, or at least a new recklessness, a readiness to take chances on his own account. In consequence, as is by this time clear to discerning men, authority cannot longer be imposed from above; it comes automatically
from below. ...
It is by no means impossible, then, that the apparent shift of power indicated by the new movement may bring in the beginning fresh acts of spoliation, a wild riot of red ruin, as many thoughtful observers fear. Such is particularly likely to be the case in the first instance, indeed, if this movement is to be met with nothing but sheer unthinking opposition, with forcible suppression by means of the policeman's club and the soldier's machine gun, if Gary and Huntington and the muzzled steel-towns of the Monongahela Valley are to be the sole reply to this manifestation of the workers' purpose to rule their own lives. Unhappily, our capitalists and politicians seem able to conceive the problem in no other terms. They appear to feel that we are shut up to a choice between ruthless suppression (by the use of armed force, if necessary) of this mutiny of the rank and file, and submission to a "dictatorship of the proletariat," in the worst sense of that horrendous term. ...
Now that the Supreme Court has decided to hear the Arizona immigration case we can suppose they understand how much business likes cheap labor and how much commercial interests love that big supply of low paid immigrants. The law sounds draconian in the summaries I have read and reviewed. Even moderate enforcement of its clauses and conditions will empty the state of unauthorized immigrants. Good by low wages. Hello California.
Arizona’s just the beginning if the Supreme Court lets states decide their own immigration rules which I have to doubt they will, but the mystery for me is to speculate on the politics. Politicians know how much business likes cheap foreign labor, but they also know business avoids announcing their preference in the public media: talk about bad PR. They leave it to politicians to make excuses for them. At least I thought so until the Arizona governor decided to defend the angry electoral block that has to compete with cheap foreign labor.
Maybe the governor has promised to provide some cheap prison labor after the low paid immigrants make their exit? But I just don’t see how she can win election and do what business doesn’t want. Maybe she is counting on the Supreme Court to bail her out?
The question “Do Federal Regulations Really Kill Jobs?” is the title of an article from the November 14th Washington Post. When author Jia Lynn Yang consulted some economists they declared the overall effect of regulations on employment is minimal. There was no mention of the millions of jobs wiped out with the overtime exemptions in the Fair Labor Standards Act rules and regulations.
Fair Labor Standards Act rules define overtime pay as not less than one and half times regular pay rates after 40 hours a week. Any use of overtime means more work for some that could go for more jobs to others. Requiring higher overtime pay for employers gives financial incentive to avoid the added expense of overtime and hire more employees at regular pay, which helps spread available work to more people.
The incentives will be more effective if overtime rules apply to all employment, which is what Secretary of Labor, Frances Perkins intended back in 1938 when the law was passed. Exemptions from overtime rules started back in the 1940’s but new rules drafted during the Bush administration and adopted in August 2004 revised Fair Labor Standards Act rules. The new regulations in Title 29 Code of Federal Regulations Part 541 have pages and pages of new wording that allows business to exempt millions of employees from overtime.