Tag Archives: jobs

In Which I Agree with Obama

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…to a point.

Currently, many companies that do business with the Federal government can get Uncle Sugar to pick up as much as $763,000 of their executives’ pay—a cap that, in today’s world of the Evil Sequester, is going to go up to $950,000 at the start of the new fiscal year this October.  And it will be retroactive for all of the current fiscal year of 2012.  That’s your and my money going into a paycheck that companies in the private world cover entirely out of their own revenue flows.  President Barack Obama wants the cap lowered to $400,000.

I agree.  Cord Sterling, Vice President of the Aerospace Industries Association, does, too:

Arbitrary caps are not the best approach and do not account for competition among all hi-tech industries in the market for talent.

Indeed, and to that point: why are we taxpayers subsidizing any part of these guys’ pay?  This is a subsidy that needs to be eliminated altogether.

Yet Another Thought on Taxes

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The Wall Street Journal has reported that

Apple, Inc paid no corporate income tax to any national government on tens of billions of dollars in overseas income over the past four years, Senate investigators found, a revelation that fuels the debate over whether the US tax code needs an overhaul.

The Senate thinks this is a bad thing, even as they acknowledge that Apple actually paid all the taxes it legally owed.  Senator John McCain (R, AZ), ranking Republican on the Senate Permanent Subcommittee on Investigations that hectored Apple’s CEO, Tim Cook, on that dastardly legal behavior earlier this week, gripes that

What they often leave out is the second part of the story, that Apple is one of the largest tax avoiders…Apple [is] the most egregious offender [among US corporations trying to avoid tax bills].

This despite the Subcommittee’s already completed investigations finding that Apple has, indeed, behaved entirely legally.  (Which makes me wonder, as an aside, whether McCain has outlived his usefulness and become just another RINO who needs to be terminated in his next primary.)  Regardless of any findings, though, in the finest Federal government tradition (can you say, “IRS,” boys and girls?), we’re going to hector and harass, anyway.  That was the point of haling Cook before the subcommittee to answer their inquisition.

This comes as part of a debate that the

US is undergoing…about the earnings that US companies are keeping overseas.  The profit at foreign subsidiaries are out of the reach of the IRS, and largely unusable to their US operations.

The sums amount to an estimated $1.9 trillion, according to an analysis by Audit Analytics….

However, instead of thinking about how to get their grubby mitts on all that money—which they then can dole out to select groups in return for votes and political power—these politicians should think about how much good that money would do in terms of jobs and innovation (and so more jobs) and lower product costs (and so more demand and so more jobs) were that money allowed to come home by an intelligent tax régime that would contain rates that encouraged rather than prevented repatriation of the money.

But thinking about that would require these politicians to “ask not what they can do for themselves, ask what they can do for their country.”

Obamacare Fail

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…again.

Employers are increasingly recognizing they may be able to avoid certain penalties under the federal health law by offering very limited plans that can lack key benefits such as hospital coverage.

Benefits advisers and insurance brokers—bucking a commonly held expectation that the law would broadly enrich benefits—are pitching these low-benefit plans around the country.

This, of course, is backwards.  The coverages here should be paid out of pocket.  The better policy would cover only catastrophic events—like hospitalization.

Then there’s this:

[E]mployers and benefits experts have understood the rules to require robust insurance, covering a list of “essential” benefits such as mental-health services and a high percentage of workers’ overall costs….

But a close reading of the rules makes it clear that those mandates affect only plans sponsored by insurers that are sold to small businesses and individuals, federal officials confirm.

The money-saving bare bones policies are only available to large companies.  The jobs producers remain stuck with the expensive, overwrought mandated policies that they cannot afford.  Nor can they afford the penalties Obamacare exacts for not affording them.

And this from Kansas Insurance Department Special Counsel Linda Sheppard:

The whole idea is to get healthy people in and not-so-healthy people in.

Never mind that healthy people don’t need to be in, since they don’t need the coverage, and so they shouldn’t be being forced in.

Business Factoid

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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

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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.