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OpenMarket: Labor and Employment

  • Minimum Wage Increase to Wipe Out 500,000 Jobs

    February 19, 2014 5:51 PM

    "Boosting the federal minimum wage as President Barack Obama and congressional Democrats are proposing" would "cut employment by roughly 500,000 jobs, Congress' nonpartisan budget analyst said Tuesday"; the Congressional Budget Office predicts that a minimum wage increase will result in "fewer jobs, especially for low-income workers; higher costs for business owners and higher prices for consumers. The study was unveiled as the Senate prepares for a March debate on a plan by Sen. Tom Harkin, D-Iowa, ramping up the minimum in three steps to $10.10 by 2016." (Source: Associated Press).

    Raising the minimum wage also drives up unemployment among young people and unskilled workers. This CBO report comes on the heels of an earlier CBO report that predicts a fall in employment of about 2 percent over the next decade due to work disincentives contained in the 2010 healthcare law. Obamacare has caused layoffs in the medical device industry, and will wipe out many jobs. It is also replacing full-time jobs with meager part-time jobs in community colleges, restaurants, and other sectors.

  • Growing Support for Road User Charges Will Be Highlighted at March Conference

    February 18, 2014 11:55 AM

    I've written about the importance of charging road users for their road use for some time. Moving toward a truly user-pays system will require significant reform. For U.S. highways, federal and state fuel taxes provide the bulk of the funding. While the idea behind levying an excise tax on gasoline to fund roads was rooted in user-pays, political developments and new technology necessitate the move away from user taxes and toward more direct, and distance-based, user fees.

    Recently, road usage charges became an issue in the Virginia gubernatorial race, with some Republican activists trying and failing to paint the Libertarian candidate as a big-government tool for broadly suggesting that the state investigate the viability of replacing fuel and sales tax road funding with a user charge. Oregon has become the first state in the nation to introduce a user charge pilot program and many others are investigating similar programs. High-tech user charges such as all-electronic tolling and GPS-based charging systems are increasingly being seen as the next logical move for road revenue collection.

  • Ambush Elections Diminish the Understanding They Seek

    February 12, 2014 12:46 PM

    Workers would have less time to study for their huge, life-changing test of whether to unionize, under a new, proposed Obama administration rule that nonsensically claims it would increase understanding of and participation in the unionization process.

    Currently, unionization elections occur an average of 38 days after they are called. The National Labor Relations Board (NLRB) has now proposed to have elections in as few as 10 days. Thus, under the proposal, workers could have only about a quarter of the time to study the unionization material.

    Would a student feel more prepared for pop quizzes or for well-planned tests? Would cutting study time to one-fourth of the previous average improve understanding? Would cutting students’ inquiry and prep time by seventy-five percent increase or diminish participation?

    The labor board’s proposal follows the logic of Nancy Pelosi: “We have to pass the bill so that you can find out what is in it.” As we have seen with the ObamaCare law, perhaps this is not the best way to create policy.

    The NLRB proposal is a purely partisan one, passed on a 3-to-2, party-line vote. Yet, as my colleague Trey Kovacs noted, NLRB Chair Mark Pearce glosses over this pure partisanship, emphasizing that the board is “unanimous” in support for “important,” “effective,” and “constructive” procedures.

  • CEI Podcast for February 12, 2014: Are Cell Phones Coming to an Airplane Near You?

    February 12, 2014 11:26 AM

    CEI Fellow Marc Scribner opposes a bill that would ban in-flight cell phone usage on airplanes. He believes that decision should be left to airlines, who have the technology to disable phones' voice communications allowing data usage for texting, emailing, and web browsing.

  • House Committee to Markup Bill Banning In-Flight Cell Phone Calls

    February 10, 2014 6:41 PM

    Tomorrow morning (Tuesday, February 11), the House Transportation and Infrastructure Committee will markup the Prohibiting In-Flight Voice Communications on Mobile Wireless Devices Act (H.R. 3676). The bill would bar travelers from making cell phone calls on commercial flights—a response to the Federal Communications Commission’s recent proposal to relax its longstanding ban on in-flight cell phone use.

    H.R. 3676 purports to solve a problem that doesn’t exist by depriving consumers of travel choices, as I explained recently in an op-ed in USA Today. To be sure, I sympathize with travelers who fear being stuck next to a chattering bore for a long flight. However, the FCC’s deregulatory steps wouldn’t require any airline to offer voice calls in-flight; rather, the new rules would merely permit airlines to experiment with in-flight calling if they so choose.

    The bill’s sponsors concede that some in-flight phone calls are acceptable, exempting Airfone-style in-seat phone calls from the ban. If voice calls on commercial flights are so bad, why continue to allow some passengers to make them on some planes?

    Supporters of the bill have fretted about the prospect of passengers loudly yakking away on long in-flight cell phone calls. Yet the technology that enables in-flight cell phone calls usually charges roaming rates for voice calls, discouraging passengers from spending hours on the phone.

  • More Equality in the U.S. Than in Europe: When the Minimum Wage Buys More in the U.S.

    February 10, 2014 11:04 AM

    France and England may have higher minimum wages than most of the U.S. does, but things cost so much there that minimum-wage workers can afford less stuff than a U.S. minimum wage worker can (due partly to consumption taxes like the VAT that finance the European welfare state). One example is provided at the liberal-leaning blog The Daily Dish: beer. A minimum wage worker can buy a beer with 0.4 hours of labor in the U.S., compared to 0.5 hours in the United Kingdom, and 0.6 hours in France. It's a graph of "How many hours of minimum wage work it takes to buy a beer" in countries across the world. The graph actually understates the advantage enjoyed by the American minimum wage worker, since it uses the U.S. federal minimum wage, which is lower than the state minimum wage in many states.

    The things working-class people buy are cheaper in the U.S. than in Europe. That is especially true for electricity, heating, and clothing, which are much more expensive in Europe. To a lesser extent, it is also true for things like fast food. When I visit my French relatives, I pay a lot more for a hamburger than I do in the U.S., although the gap is less now that McDonald's has curtailed its (U.S.) dollar value menu, a discount option that never existed in France. Until late 2013, an American could buy a double cheeseburger with as much meat as a Big Mac for $1.29, or even as little as a dollar, in U.S. McDonald's franchises. No such deep-discount option existed in France, and Big Macs are more expensive in France and most of Europe than in the U.S. In January 2012, a Big Mac cost $9.63 in Norway, $8.14 in Finland, $7.29 in Sweden, and $6.81 in Switzerland, much more than in the U.S.

  • USDOT Calls for Connected Vehicle Mandate; Security and Privacy Concerns Remain

    February 3, 2014 2:03 PM

    The U.S. Department of Transportation (DOT) announced today it would chart a regulatory path that would require all new automobiles to be equipped with vehicle-to-vehicle (V2V) communications systems sometime in the next several years. This follows a National Transportation Safety Board recommendation that connected vehicle technology be mandated on all new vehicles.

    V2V and vehicle-to-infrastructure (V2I) safety systems could provide large safety benefits in the future. Unfortunately, DOT has jumped the gun, requiring systems while large challenges remain, particularly issues related to data privacy and security.

    A November 2013 report from the Government Accountability Office (GAO) provides a good description of what DOT is attempting to do:

  • Long-Suspected TSA Abuse and Incompetence Confirmed by Former TSA Employee

    January 31, 2014 3:44 PM

    tsa-nun-screeningPolitico Magazine has a disturbing article by former transportation security officer Jason Edward Harrington. At least it would be disturbing if it wasn't largely just a confirmation of what many of us had long suspected. (Titled "Dear America, I Saw You Naked: And yes, we were laughing. Confessions of an ex-TSA agent.") Harrington details the dim view the Transportation Security Administration holds of traveling public, in addition to their willful use of ineffective screening techniques and technologies, which may or may not be deployed by spiteful TSOs to humiliate or delay a passenger who rubs them the wrong way. A taste:

    We knew the full-body scanners didn’t work before they were even installed. Not long after the Underwear Bomber incident, all TSA officers at O’Hare were informed that training for the Rapiscan Systems full-body scanners would soon begin. The machines cost about $150,000 a pop.

    Our instructor was a balding middle-aged man who shrugged his shoulders after everything he said, as though in apology. At the conclusion of our crash course, one of the officers in our class asked him to tell us, off the record, what he really thought about the machines.

    “They’re shit,” he said, shrugging. He said we wouldn’t be able to distinguish plastic explosives from body fat and that guns were practically invisible if they were turned sideways in a pocket.

  • State of the Union: More on the President's Debunked Wage Gap Claim

    January 29, 2014 2:14 PM

    Aloysius Hogan has already debunked the president's wage gap claim in his State of the Union Address in an earlier post, noting that labor economist Diana Furchtgott-Roth found that "men and women make about the same" per hour in each "individual" occupation after taking into account factors like “job responsibility" and "experience."

    What's noteworthy is that even fact-checkers for some liberal newspapers such as The Washington Post are finally taking issue with the president's claims in this area. In his State of the Union address, President Obama said,

    Today, women make up about half our workforce. But they still make 77 cents for every dollar a man earns. That is wrong, and in 2014, it’s an embarrassment.

    But as the fact-checker for The Washington Post (which hasn't endorsed a Republican for President since 1952) noted yesterday, this figure is quite misleading, since it involves comparing apples to oranges: Women on average do not work the same number of hours men do per year, nor do female workers have the same individual or occupational characteristics as male workers:

    Obama is using a figure (annual wages, from the Census Bureau) that makes the disparity appear the greatest. The Bureau of Labor Statistics, for instance, shows that the gap is 19 cents when looking at weekly wages. The gap is even smaller when you look at hourly wages — it is 14 cents — but then not every wage earner is paid on an hourly basis, so that statistic excludes salaried workers.

    In other words, since women in general work fewer hours than men in a year, the statistics used by the White House may be less reliable for examining the key focus of legislation pending in Congress — wage discrimination. The weekly wage is more of an apples-to-apples comparison, but it does not include as many income categories.

    Economists at the Federal Reserve Bank of St. Louis surveyed economic literature and concluded that “research suggests that the actual gender wage gap (when female workers are compared with male workers who have similar characteristics) is much lower than the raw wage gap.” They cited one survey, prepared for the Labor Department, which concluded that when such differences are accounted for, much of the hourly wage gap dwindled, to about 5 cents on the dollar.

  • State of the Union: President Gets Minimum Wage and Gender Pay Gap Wrong

    January 29, 2014 9:53 AM

    President Obama surprised few in his State of the Union address, which was dominated by egalitarian and populist themes. The president is entitled to his ideology, but not to his own facts. On both the minimum wage and gender pay gap, the president's position runs counter to the economic reality.

    President Obama voiced strong support for legislation sponsored by Sen. Tom Harkin, D-Iowa, and Rep. George Miller, D-Calif., to raise the federal minimum wage from $7.25 to $10.10 per hour. He also encouraged cities and states to raise their minimum wages, citing the five states to have done so in the past year, while calling on businesses themselves to increase employee pay. Every employee would certainly like to be paid more. Unfortunately, increasing the minimum wage will decidedly not promote economic growth nor help our present employment woes.

    Writing in the The Wall Street Journal nearly two decades ago, Nobel laureate economist James Buchanan called out such populist rhetoric as economically baseless: “[N]o self-respecting economist would claim that increases in the minimum wage increase employment. Such a claim, if seriously advanced, becomes equivalent to a denial that there is even minimal scientific content in economics, and that, in consequence, economists can do nothing but write as advocates for ideological interests. Fortunately, only a handful of economists are willing to throw over the teaching of two centuries; we have not yet become a bevy of camp-following whores.”

    Nonetheless, President Obama proclaimed, “In the coming weeks, I will issue an Executive Order requiring federal contractors to pay their federally funded employees a fair wage of at least $10.10 an hour -- because if you cook our troops’ meals or wash their dishes, you shouldn’t have to live in poverty.”

    What the president fails to note is that his proposed minimum wage of $10.10 per hour would still leave a full-time breadwinner’s family below the poverty line.

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