Business Factoid

Matthew Payne, writing in The Wall Street Journal this weekend on a related subject, had this little tidbit.  Quoting a Chief Executive Magazine poll of business-worthy states, he wrote,

CEOs are well disposed to Texas, and it’s not hard to understand why.  52 Fortune 500 companies now call Texas home.

That’s 10% of the Fortune 500 that live here.

If those 500 companies were spread evenly across the 50 states, there would be 10 of them here.  If the 500 were spread proportional to each state’s population relative the nation’s population, Texas would have 4 of them.

Hmm….

Another Impact of Obamacare

The Labor Department released its April jobs data last Friday.  First, the good news: the labor force participation rate didn’t change from March—good news because it actually means more folks, in absolute terms, are participating, since the US’ population increased from March, and because while participation still is down from last January and remains near 30-year lows, it’s not dropping further.  Also, 165,000 new non-farm jobs were added in April—no great shakes compared with what’s needed for actual economic growth, but it’s better than even the upwardly revised number for March.  These combined to lower the unemployment rate a tick from March, to 7.5%.

Buried in the numbers, though, are some worrisome data [emphasis added].

[A] broader rate, known as the “U-6” for its data classification by the Labor Department, increased to 13.9% from 13.8% a month earlier.

In April, the rate ticked up as the number of workers who are part-time but want full-time work increased.  That came even as the numbers of hours worked also dropped this month for all workers.

The primary reason the hours are dropping is illustrated by this.

…the decision by some employers to keep fewer full-time workers on the payroll or reduce the hours of near full-time workers to avoid having to provide health insurance.

It’s not limited to private enterprise:

Consider the city of Long Beach.  It is limiting most of its 1,600 part-time employees to fewer than 27 hours a week, on average.  City officials say that without cutting payroll hours, new health benefits would cost up to $2 million more next year, and that extra expense would trigger layoffs and cutbacks in city services.

And

Overall, an estimated 2.3 million workers nationwide, including 240,000 in California, are at risk of losing hours as employers adjust to the new math of workplace benefits, according to research by UC Berkeley.  All this comes at a time when part-timers are being hired in greater numbers as US employers look to keep payrolls lean.

As the WSJ put it,

This raises the question about the kinds of jobs being created, and whether they can support a faster recovery.

It’s Bad

…when the court pokes fun at a case.

In Bayou Lawn, et al., v Department of Labor, Bayou Lawn, the Chamber Of Commerce of the United States of America, the National Hispanic Landscape Alliance, the Silvicultural Management Associates, Inc., and the Professional Landcare Network, among others, objected to a number of wage rules and bureaucratic requirements related to the H-2B visa program that had been promulgated by DoL.  Among other things, these groups doubted DoL’s authority even to write such rules.

Nor were DoL’s rules insubstantial:

These rules would decrease the maximum number of months an employer may employ an H-2B worker from ten to nine; require employers to guarantee that H-2B employees will work at least seventy-five percent of the hours certified in any twelve-week period and, if not, pay the employees the difference for the time not worked; require employers to pay non H-2B workers’ wages and benefits at least equal to those paid to H-2B workers if the two perform “substantially the same work;” require employers to pay for the round-trip airfare and subsistence costs of H-2B workers; and impose additional bureaucratic requirements, such as the filing of job orders, performing extensive domestic recruitment, and applying for a temporary labor certification.

A Federal court in Florida agreed and enjoined DoL from enforcing its rules.  DoL appealed, even while conceding that it had no actual authority for promulgating these rules [emphasis in the original]:

The DOL does not dispute that it has no express authority to make rules for the H-2B program.

Rather, DoL argued in all seriousness,

DOL counters that its authority may be inferred from the “statutory scheme [that] shows a Congressional intention to grant [it] rulemaking power.”

And here is the scheme that DoL argued [emphasis still in the original]:

[Federal law] instructs the Secretary of DHS to consult with the “appropriate agencies of the Government” in resolving whether to grant a foreign worker a visa upon the “petition of the importing employer.”  Although there is no grant of rulemaking authority to DOL in this statutory section, DOL asserts that as the result of the permission it grants to DHS to consult with it, DOL “has authority to issue legislative rules to structure its consultation with DHS.”  The end result, in DOL’s view, is that it is empowered to engage in rulemaking, even without the DHS.

The 11th Circuit thought this pseudo-reasoning…foolish.

We reject this interpretation of “consultation.”  Under this theory of consultation, any federal employee with whom the Secretary of DHS deigns to consult would then have the “authority to issue legislative rules to structure [his] consultation with DHS.”  This is an absurd reading of the statute and we decline to adopt it.

DOL was designated a consultant.  It cannot bootstrap that supporting role into a co-equal one.

DOL next argues that the “text, structure and object” of the INA evidence a congressional intent that DOL should exercise rulemaking authority over the H-2B program. This would be a more appealing argument if Congress had not expressly delegated that authority to a different agency.

And so on.

Just what is the competence level in this administration?

The 11th‘s ruling can be read here and here.

 

h/t Law Blog

The Party of Stupid

New York Branch.

As the quid pro quo for agreeing to Governor Andrew Cuomo’s demand for his higher minimum wage, the New York Senate Republicans browbeat him into accepting a tax credit for businesses who hire at that new minimum wage.

Leaving aside the anti-hiring outcomes of minimum wage increases, as a result of this foot-shooting everyone in New York now gets to pay a piece of that higher wage, not just the businesses and their customers.

Brilliant, guys.

Some Questions about the Labor-Chamber of Commerce Accord on Immigrant Labor

Over the last few days, Big Labor and Big Business have reached a working agreement on one the last (apparently) sticking points in the immigration reform idea being worked by the Immigration Gang of Eight in the Senate.  This agreement, which centers on low-skill “guest workers,” has the following outlines.  These guest workers

  • would be paid the higher of the prevailing industry wage as determined by the Labor Department or the actual employer wage
  • would be allowed to pursue a path to citizenship and to change jobs after they arrived in the United States

Moreover, the visas

  • would be issued under a W Visa program that would start at 20,000 visas, rise to 35,000 visas in the second year, 55,000 in the third, and 75,000 in the fourth.  In the fifth year, the program would expand or shrink based on the unemployment rate, the ratio of job openings to unemployed workers and various other factors.  A maximum of 200,000 guest visas would be granted each year after the fourth, with a maximum of 15,000 visas per year for some construction occupations
  • although low-skilled construction workers would be included, trades like crane operators and electricians would be explicitly excluded
  • one third of all visas available in any given year would go to businesses with fewer than 25 employees

Richard Trumka, President of the AFL-CIO, says of this agreement

We have created a new model, a modern visa system that includes both a bureau to collect and analyze labor market data, as well as significant worker protections.

I have a number of questions about this.

  • Why do we need another government bureaucracy to assess this program and to determine the allowed limits—and wages—to the expanding and contracting visa program?  Why not let the free market determine the demand for labor?
  • Why do we need a minimum wage—which suppresses hiring?  Why not let the market for those low skills determine the wages paid?
  • Why does this guest worker program need a special path to citizenship?  If the immigrants are here legally, and if they’re allowed to stay and to change jobs, they already have the existing citizenship path that any other legal immigrant has.
  • Why do we need a quota on visas?  If the end game is to let the program expand or shrink based all those government-assessed factors, why not, instead, let it expand or shrink more responsively and efficiently based on market factors: demand for labor as driven by demand from consumers and businesses for the product on which that labor will work?

To abuse an old sitcom’s tag line: hold it.  I don’t think you’ll like this picture.