Tag Archives: jobs

The Price of Labor

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…is also a cost to labor.  Minimum wage mandates took effect at the start of the year in 18 States and in 20 cities.  These mandates have drastically raised the cost to labor.

Late Monday, casual dining chain Red Robin Gourmet Burgers (RRGB) announced that it would eliminate bus boys at 570 restaurant locations, a move that is expected to save the company an estimated $8 million over the course of the coming year. The company’s chief financial officer said the decision was made in order to “address the labor increases we’ve seen.”

Those busboys can thank their respective Progressive-Democratic politicians for the wage increase they can enjoy not having.  They also should remember this largesse in the coming primary season and again this fall.

There’s another cost to labor, one that is far longer lasting, and so far more devastating to us citizens and the economy in which we must operate.  Michael Saltsman, Employment Policies Institute Director, addressed the problems faced by our teenagers and other first-time workers:

I think the loss, as the minimum wage goes up…[is the] hollowing out of entry-level opportunities[.]

Without that entry-level experience—not only in a particular job, but in the nature of having a job, the ethic of work—how will our first-timers get the next-level job?  How, indeed, will they even get any entry-level job when they’re being priced out of the starter market?

A Thought on Student Loans

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Education Secretary Betsy DeVos is taking steps to redress the Obama administration travesty of a student loan program, but these can only be interim steps and by themselves are entirely insufficient.

Unfortunately, the student loan programs are entirely dysfunctional and want complete revamping. My high-level suggestions:

  1. student loan discharge only via bankruptcy, no special treatment of these loans
  2. let schools and students write their own loan agreements, including interest rates and payback provisions, without Government interference
  3. hold those schools and students to those agreements
  4. if Government guarantees any student loans, do so IAW the following:
  • interest rates charged must be commensurate with the employability and median first-five-year pay of the major being pursued; higher rates for lower employability and median pay. Higher risk loans should pay higher rates
  • in the event of bankruptcy discharge of a loan, the school floating the loan must completely reimburse the government, NLT the following fiscal quarter, for the taxpayer loss from the bankruptcy discharge.

Good for Workers, Good for Business

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Recall the National Labor Relations Board’s case of a couple of years ago, Browning-Ferris Industries.

Browning-Ferris concerned a recycling center staffed by contractors. The original [NLRB] ruling found the contractors were jointly employed by a staffing firm and Browning-Ferris.

This ruling, if allowed to stand (the case also is in the Federal court system) would have allowed contractors like those at Browning-Ferris, McDonald’s, and any other franchise-centered corporation not only to form unions at individual franchises (which they’ve always been able to do), but also to form a grand union across the corporation.

President Donald Trump appointed a couple of folks to the NLRB to fill vacancies created when two ex-President Barack Obama (D) appointees quit in a snit over Trump’s election.  Now the NLRB has voted to overturn that prior NLRB ruling.

This is good for both business and for employees.  It’s good for business because modern unions have devolved into extortion rackets that threaten a business’ ability to exist through crippling strikes unless the unions get pay and benefits that they demand, even when those things cost more in their per-employee aggregate than the employee’s work is worth.

It’s good for the workers because it means, with labor costs allowed to match the value of the work done, labor won’t be replaced by automation that’s cheaper than the union-elevated labor costs.  Jobs will be preserved, and more hiring will occur.  It’s also good for workers because it frees them to negotiate their own wage and benefit package instead of being dragooned into whatever a union might impose on them.

Higher Education Improvement

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The Wall Street Journal has a summary of the House’s The Promoting Real Opportunity, Success and Prosperity Through Education Reform (PROSPER) Act, to be proposed this week.  It’s aimed at

filling that gap [in college graduates’ skills, with 6 million jobs left begging] by both deregulating parts of the sector and laying the conditions for shorter, faster pathways to the workforce. The act focuses on ensuring students don’t just enroll in school, but actually graduate with skills that the labor market is seeking.

Highlights include these:

  • revamp of the $1.34 trillion federal student loan program
    • graduate students and parents of undergraduates would have overall caps on tuition and living expense loans, instead of borrowing whatever schools charge.
    • end loan-forgiveness programs for public-service employees
    • eliminate a program that ties monthly payments to income levels for private-sector workers.
  • community colleges would get more funding to team with the private sector and create or expand apprenticeships and learn and earn programs
  • for-profit college sector would be on equal footing with nonprofit schools regarding limits on federal aid and measurements of graduate success: overall, competency-based education
  • functional repeal of the gainful employment regulation, which ties access to federal student aid to whether career programs lead to decent-paying jobs. Government will no longer be the decider of what jobs are suitable; the graduate and employer will.
  • increased accountability of schools by improving the quality of information available to prospective students
  • “historically black” and developing Hispanic schools would have to provably graduate or transfer at least 25% of their students in order to get funding from the pile otherwise earmarked for these schools
  • require schools to pay back some portion of federal loans if the student didn’t rather than leaving the schools strictly as loan generators that get the proceeds from the loans without regard to suitability or outcome.

All in all, this could represent a major improvement to our higher community college/college/university education system, especially in its core: graduates’ employability and the costs incurred (and by whom) in achieving that employability.

Naturally, the colleges and universities, whose funding oxen are going to get gored, will squawk.  Ignore them, and move past the dinosaurs and vested interests.