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OpenMarket: Labor and Employment

  • 33 House Republicans Join ALPA to Restrict Competition and Soak Consumers

    June 3, 2014 10:01 AM

    previously wrote about the campaign from the Air Line Pilots Association (ALPA) against Norwegian Air International's (NAI) attempt to offer low-cost flights from the U.S. to Europe. Having lost their case in Europe, ALPA has teamed up with a European pilots' union to pressure the Federal Aviation Administration to deny NAI's petition for a foreign air carrier permit. In addition, ALPA is spending millions on a xenophobic ad campaign in a pathetic attempt to stoke ethnic and national division for its members' narrow benefit. A sample line: “NAI calls itself Norwegian, but it registers its airplanes in Ireland, hires its pilots in Singapore, and bases its flight crews in Thailand.”

    As I noted, none of this is surprising given ALPA's history of turning a blind eye to racism within their ranks. For instance, in 2012, ALPA succeeded in getting one of its member pilots, Marcin Kolodziejczyk, reinstated after he had been fired by his employer Mesa Airlines. Kolodziejczyk, who at the time was vice chairman of the Master Executive Council (MEC) at Mesa, was fired by the airline after sending an email to a number of ALPA officials with the following remarks about Mesa's Senior Vice President of Human Resources, who also happens to be black, during contract negotiations:

    He was hanging from the ceiling making monkey sounds. That's all I witnessed at the meeting I was at . . . Stay focused and I already have the chains for him, just need your help to string him up!

    Not only did ALPA get Kolodziejczyk reinstated with full seniority and back pay by exploiting technicalities within the collective bargaining agreement, it then promoted him to chairman of the MEC at Mesa. Making things even worse, ALPA is currently featuring a YouTube video starring Kolodziejczyk from November of last year. I guess we know how to get ahead at ALPA.

    Their multi-million dollar campaign against NAI is rooted in similar small-minded bigotry, although this time it's cloaked in creepy nationalism and vague appeals to patriotism. Many have seen through this anti-consumer protectionist campaign. Unfortunately, 33 House GOP members sent a letter to the Secretary of Transportation yesterday parroting ALPA's bogus claims against NAI. Republicans constantly talk about "principles," "limited government," and "free enterprise." But when the time comes to actually promoting free enterprise, competition, and consumer welfare, they often do the opposite of their stated beliefs.

  • Seattle Minimum Wage Hike Already Hurting Businesses

    June 2, 2014 2:19 PM

    What did they think would happen?

    Seattle is likely to lift its minimum wage to $15 an hour. The move, supported by leftists and labor unions, would make the city's artificial wage floor the highest in the nation. Proponents gush about the importance of "living wages," while opponents, citing economic research, warn against the increases in unemployment and harm to small businesses likely to follow. Unfortunately for artificial wage floor boosters, Seattle politicians need only look a few miles away to see the harm a $15 minimum wage can do.

    SeaTac, a suburb of Seattle, recently decided to raise the minimum wage to $15 an hour and United Liberty tells us that employers in SeaTac have had to cut employee benefits to stay in business after the dramatic raise. In an interview with a publisher from Northwestern Asian Weekly, one employee describes how her company had to cut her benefits to counter the skyrocketing cost of wages: “I lost my 401k, health insurance, paid holiday, and vacation,” she responded. “No more free food,” she added. The wage hike is already hurting Seattle businesses, even though it has not been implemented yet.

    The Washington Policy Center chimes in as well, showing how the minimum wage hike has discouraged small business expansion and kept small business owners from opening new businesses or hiring new workers.

    The Seattle Times also notes, “At the Clarion Hotel off International Boulevard, a sit-down restaurant has been shuttered, though it might soon be replaced by a less-labor-intensive cafe."

  • CEI Labor and Employment Scorecard: Insourcing Amendment to Intelligence Authorization Act

    May 30, 2014 8:39 AM

    This week, the Competitive Enterprise Institute (CEI) will score a vote in the U.S. House of Representatives in its consideration of the Intelligence Authorization Act for Fiscal Years 2014 and 2015 (H.R. 4681).

    The intelligence authorization is considered annually, though there is some history of the process falling short of annual enactment. The vote below pertains to employment considerations for America’s labor force, both governmental and private. The score will be incorporated into CEI’s Congressional Labor and Employment Scorecard, which can be seen in full on CEI’s labor and employment policy website,

    In the course of government operations, work and employees are transferred between the federal government and private employers through “insourcing,” whereby activity once performed by the private sector is brought under government control, and “outsourcing,” whereby the private sector takes over some functions formerly performed by government employees. When deciding whether to insource or outsource, policy makers should follow a basic principle: Businesses should not be subjected to unfair competition from government entities.

    A good guide is the “Yellow Pages” test, which has been applied by mayors and governors around the nation, both Democrat and Republican. It operates under a simple premise: If you can find a private sector firm providing products or services that the government is also providing, then the service should be provided by the private sector. This would insert market competition into the government procurement process, break up government monopolies, and provide better value for taxpayers.

    The Center for Naval Analyses found benefits of competing work, in its 1996 examination of the issue. The visibility and identification of alternate providers were beneficial aspects of the process identified by the Center. As a bottom line, the Center for Naval Analyses determined a 30 percent average savings resulted from this beneficial focus on competition, with savings persisting over time.

    Government workers cost more per hour worked than private sector employees. As the Congressional Budget Office concluded in 2012,

    On average for workers at all education levels, benefits for federal employees cost about $20 per hour worked, whereas benefits for private-sector employees cost $14, CBO estimates. Thus, benefits for federal workers cost 48 percent more per hour worked, on average, than benefits for private sector workers with similar attributes. Benefits also constituted a larger share of compensation for federal workers, accounting for 39 percent of the cost of total compensation, compared with 30 percent in the private sector.

  • How Policy Makers Should Approach Google's Driverless Shuttles

    May 28, 2014 10:25 AM

    Yesterday, Chris Urmson, director of Google's Self-Driving Car Project, wrote a post for the company blog describing Google's newest prototype: fully automated vehicles that lack manual steering, accelerating, and braking functions:

    It was inspiring to start with a blank sheet of paper and ask, “What should be different about this kind of vehicle?” We started with the most important thing: safety. They have sensors that remove blind spots, and they can detect objects out to a distance of more than two football fields in all directions, which is especially helpful on busy streets with lots of intersections. And we’ve capped the speed of these first vehicles at 25 mph. On the inside, we’ve designed for learning, not luxury, so we’re light on creature comforts, but we’ll have two seats (with seatbelts), a space for passengers’ belongings, buttons to start and stop, and a screen that shows the route—and that’s about it.

    Here's a short video of the prototype in action:

    Google's announcement of a low-speed, non-highway vehicle is not surprising. As Stanford Law's Bryant Walker Smith noted last fall at The Volokh Conspiracy,

  • Congress Must End Department of Transportation's Abuse of "Unfair and Deceptive Practices" Authority

    May 21, 2014 10:29 AM

    The Department of Transportation is opening a rulemaking proceeding to, among other things, require airlines and ticket agents to include ancillary fees (for, e.g., checked bags, seat assignments) in any fare comparison. More troubling is its expansion of "ticket agent" to "apply to all entities that hold out airfare, schedule, and availability information to consumers," including meta-search engines such as Google Flights and KAYAK. But most troubling is the Department's summary of its preliminary regulatory analysis, reproduced in full below:

    The quantifiable costs of this rulemaking exceed the quantifiable benefits. However, when unquantified costs and benefits are taken into account, we anticipate that the benefits of this rulemaking would justify the costs. It was not possible to measure the benefits of the proposals in this rulemaking, except for the benefits for provision 2. For example, there are a number of unquantified benefits for the proposals such as improved on time performance for newly reporting carriers and code-share flights of reporting carriers, improved customer goodwill towards ticket agents, and greater competition and lower overall prices for ancillary services and products. There are also some unquantified costs such as increased management costs to improve carrier performance, increased staff time to address consumer complaints, and decreased carrier flexibility to customize services, though we believe these costs would be minimal. If the value of the unquantified benefits, per passenger, is any amount greater than one cent and the unquantified costs are minimal as anticipated, then the entire rule is expected to be net beneficial. (Emphasis added.)

  • CEI Labor Scorecard: National Defense Authorization Act

    May 21, 2014 8:51 AM

    This week, the Competitive Enterprise Institute (CEI), a Washington, D.C.-based organization dedicated to the principles of free enterprise and limited government, will score a vote in the U.S. House of Representatives in its consideration of the National Defense Authorization Act for Fiscal Year 2015 (H.R. 4435). The defense authorization is one of the largest bills considered each year. The vote below pertains to employment considerations for America’s labor force, both governmental and private. The score will be incorporated into CEI’s Congressional Labor and Employment Scorecard, which can be seen in full on CEI’s labor and employment policy website,

  • CEI Podcast for May 20, 2014: Phones on a Plane

    May 20, 2014 6:17 PM

    CEI Fellow Marc Scribner supports the FCC's attempt to lift a ban on in-flight cell phone use.

  • Failed Obamacare Exchanges and No-Work Contracts Drive up Obamacare Costs

    May 19, 2014 8:45 AM

    Politico tallies the rising costs for "four failed Obamacare exchanges," reporting:

    Nearly half a billion dollars in federal money has been spent developing four  state Obamacare exchanges that are now in shambles — and the final price tag for salvaging them may go sharply higher.

    Each of the states — Massachusetts, Oregon, Nevada and Maryland — embraced Obamacare, and each underperformed. All have come under scathing criticism and now face months of uncertainty as they rush to rebuild their systems or transition to the federal exchange.

    The federal government is caught between writing still more exorbitant checks to give them a second chance at creating viable exchanges of their own or, for a lesser although not inexpensive sum, adding still more states to . .The $474 million spent by these four states includes the cost that officials have publicly detailed to date. It climbs further if states like Minnesota and Hawaii, which have suffered similarly dysfunctional exchanges, are added.

    CNS News and KMOV TV describe how Obamacare is hiring hundreds (or perhaps thousands) of employees to do nothing for weeks on end in largely-useless application-processing centers (such as processing virtually non-existent types of paper applications).

  • Insurance Premiums Rising More Due to Obamacare

    May 16, 2014 11:00 AM

    There are "rate hikes for all" coming due to Obamacare, predicts The Daily Caller, citing state insurance filings:

    Virginians will see upped health insurance premiums in 2015 . . . according to the filings from the first state to release any information about what Obamacare could bring next year. The premium proposals were submitted to the state insurance office for official approval and were made public Monday. Each health plan expects to increase its prices in 201  past nominal increases for inflation, the Wall Street Journal reports. Anthem HealthKeepers, run by WellPoint, expects to up its premiums on and off Virginia’s Obamacare exchange by an average of 8.5 percent. . . others will see increases up to 16.6  percent. The fees are due to a multitude of Obamacare worries, including sicker new customers, an influx of demand for health care services from the newly  insured and a plethora of new Obamacare taxes.

    Big increases in premiums and deductibles are coming after the November election, notes The Fiscal Times. As we noted earlier, Washington, D.C., recently imposed a one-percent health-insurance tax in the city to pay for the ballooning costs of its Obamacare health insurance exchange, increasing costs for both employers and individuals. Obamacare has increased the cost of employer-provided health insurance in the District of Columbia, as predicted by experts, who warned that small employers especially “may see their rates increase” in the city. Hot Air proclaims, “get ready for the next round of Obamacare price spikes."

    Many people will be plunged into the individual health insurance market as they lose their employer-provided coverage due to Obamacare. An NPR report "profiled AmeriMark, a catalog retailer with 700 employees that has long provided coverage for employees. However, the premiums for their 2013 plans escalated 30 percent for 2014, so they switched carriers and forced employees to pay a higher share of premiums with higher deductibles and co-pays."

  • EPW Drops Highway Bill Nothing Burger, Attempts to Bail Out Sinking Ship with Leaking Bucket

    May 13, 2014 2:06 PM

    htf-ha-cboYesterday evening, the Senate Environment and Public Works (EPW) Committee's "big four" (Democrats Barbara Boxer and Tom Carper, and Republicans David Vitter and John Barrasso) released their draft highway bill reauthorization proposal. It basically calls for six more years of the status quo, with some nice gimmicks thrown in for good measure. You can read the full thing here. There's also this handy summary for people who don't have too much time on their hands.

    As was expected, EPW's proposal has been met with crickets. Observers knew it would fail to address the core problem facing the Highway Trust Fund: that Congress spends more money than it takes in. Not only that, but it failed to include President Obama's excellent suggestion of removing the present federal prohibition on states tolling their own Interstate segments. The Senate Finance Committee handles surface transportation reauthorization revenue, so Boxer and Vitter will now wait for their colleagues to produce about $100 billion in needed bailout money out of thin air.


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