“Trolling For Low-Wage Jobs”: Gov. Rick Scott; Florida’s Ambassador For Cheap Labor And Mediocrity
Florida Gov. Rick Scott went to California last week to steal some jobs.
Guess how that brilliant idea turned out.
Scott urged California businesses to pack up and move to Florida because the minimum wage in Florida is only $8.05 an hour.
That was actually the thrust of his selling point: Why are you paying your workers $10 an hour? Floridians will work dirt cheap!
Scott spent lots of taxpayer money to carry this dubious offer to the Golden State, where it went over like a lead balloon.
In a caustic retort, Gov. Jerry Brown wrote: “If you’re truly serious about Florida’s economic well-being, it’s time to stop the silly political stunts and start doing something about climate change — two words you won’t even let state officials say.”
A Los Angeles Times editorial called Scott’s California trip “especially offensive.” It said he “should be home in Florida … trying to create well-paying jobs, instead of trolling for low-wage ones that he can steal in California, undermining this state’s effort to pay a living wage to more of its low-skilled workers.”
The impetus for Scott’s trip was California’s decision to raises its minimum wage to $15 per hour over the next six years. Scott says the wage hike will cost the state 700,000 jobs, a figure he got from a conservative think tank that didn’t even use California jobs data.
Meanwhile, a study by the Labor Center at the University of California-Berkeley predicted no net job loss in Los Angeles as a result of the state’s phased-in pay increases.
In Florida, we’re used to Scott’s obsession with job numbers instead of quality jobs. It will be the centerpiece of his U.S. Senate run in 2018, by which time we might lead the nation in convenience-store openings.
Last week’s “trade mission” to California was Scott’s second. His first try came in March 2015, and since then California employers have added twice as many new jobs as Florida employers have.
So, that trip didn’t work out so great, either.
Unfortunately for Scott, California’s economy is booming right now.
Although the unemployment rate is higher than in Florida, there is no corporate exodus. Ironically, census figures from 2014 indicate that more Florida residents are moving to California than going the other direction.
Florida is an easier sell to multimillionaires looking to relocate in a state with no income tax. That’s undoubtedly one of the reasons that Scott himself moved to Florida in 2003.
However, Florida isn’t so alluring to firms looking for a skilled and educated labor force. That’s because the state still spends an embarrassingly paltry amount on its schools.
According to the National Education Association, the average salary of public teachers in Florida in 2013-2014 was $47,780. That’s 39th in the country, worse than even Alabama or Louisiana.
In California, the average teacher salary that year was $71,396.
Now, if you’re on the board of Apple or Microsoft, where do you think your employees with school-age children would rather live?
It’s bad enough that Scott flies around the country bragging about Florida’s pathetically low wages, but he’s using public money to run radio commercials in other states, beseeching companies to close up shop and move to Florida.
Which would basically screw all the working people on their payrolls.
The governor’s job-poaching junkets are, as the Los Angeles Times said, offensive. But his mission is futile, and his lack of sophistication is breathtaking.
Scott puts the “goober” in gubernatorial.
In March, he invited Yale University to leave its iconic Connecticut campus and resettle in Florida, to avoid state taxes on its endowment fund.
That would be Yale University, founded in 1701. A perfect fit for Boca Raton, right? Or maybe Yeehaw Junction?
Whether Scott was serious or not (he insisted he was), he came off looking like a dolt. They’re still laughing at him (and us) in New Haven.
Out of courtesy to his GOP colleagues, Scott focuses his job-stealing raids on states with Democratic governors. There’s nothing for them to be afraid of, no manic stampede of companies — or Ivy League universities — to the Sunshine State.
All we Floridians can do is apologize to the rest of the country for any past and future appearances by our weird ambassador for cheap labor and mediocrity.
Don’t take him seriously. We certainly don’t.
By: Carl Hiaasen, Columnist for The Miami Herald; The National Memo, May 10, 2016
“Barking Up The Wrong Tree”: Ted Cruz Keeps Talking About ‘Wages’ — But He Won’t Support Raising Them
“Washington” is keeping wages down and impoverishing the American middle class, at least according to Ted Cruz, who has adopted economic populism as a line of attack against the political establishment as a routine part of his stump speech in recent months.
The Texas senator has tried to link rival Donald Trump to Democratic frontrunner and perennial enemy of the American right, Hillary Clinton. But the argument that the federal government, and by extension the Obama administration, was responsible for the decline in wages of American workers, was yet another baseless charged levied against a rhetorically-convenient “Washington establishment.”
Where to start. It’s unclear whether or not Cruz believes in a minimum wage. He has argued against a minimum wage, saying it leads to job losses among American minority groups. “Every time we raise the minimum wage, predictably what happens is a significant number of people lose their jobs, and they’re almost always low-income, they’re often teenagers, African Americans and Hispanics,” he said, voicing concern for demographic groups that are unlikely to vote for him anyhow, and for whom his policies don’t reflect the concern of his talking points.
In Cruz’s mind, the minimum wage is best left to the states. While he assails the loss of American jobs, sounding much like a vague, rehearsed mashup of Donald Trump and Bernie Sanders in their criticism of outsourcing, his policies have a different end in mind: employment above all else.
“I think it’s bad policy,” said Cruz on CNBC, criticizing the existence of a minimum wage. “And you know, one observation I make to folks is next time you go to a fast food restaurant and you start ordering on an iPad, you’re seeing the minimum wage.”
During a Senate hearing in 2014, Cruz spoke out against President Barack Obama’s proposed federal wage increase to $10.10. He said:
The undeniable reality, the undeniable truth, is if the President succeeded in raising the minimum wage it would cost jobs for the most vulnerable. The people who have been hurt by this Obama economy would be hurt worse with the minimum wage proposal before this body. In 2013 the President in his State of the Union address proposed raising the minimum wage to $9.00. Now a year later the request has magically changed to $10.10. The only reason (there’s no economic justification) the only reason is politics. And I suppose if the approval ratings of democratic members of this body continue to fall in another month we’ll see a proposal for $15.00 an hour and then maybe $20.00 or $25.00 an hour. But I think the American people are tired of empty political show votes. The nonpartisan congressional budget office says that raising the minimum wage could cost a loss of 500,000 to 1 million jobs.
Cruz is barking up the wrong tree. It is not the $7.25 an hour minimum wage that made companies like Carrier, whose managers were infamously recorded laying off 1,400 at its Indianapolis plant earlier this year, outsource those jobs to Mexico. As the Economic Policy Institute pointed out in a 2003 report, NAFTA resulted in a period of job growth in the U.S. between 1994 and 2000. But starting in 2001, jobs started disappearing. “Job losses have been primarily concentrated in the manufacturing sector, which has experienced a total decline of 2.4 million jobs since March 2001,” read the institute’s report. “As job growth has dried up in the economy, the underlying problems caused by U.S. trade deficits have become much more apparent, especially in manufacturing.” It pointed to systemic turmoil in internationalized labor markets, the result of free trade agreements, which allow companies to move to where living costs (and thus labor) are cheapest.
But for Cruz, the problem has always been the minimum wage, despite evidence to the contrary: Another EPI report released in 2013 outlining the benefits of increasing the minimum wage to $10.10 concluded, “Raising the federal minimum wage to $10.10 by 2016 would lift incomes for millions of American workers and provide a modest boost to U.S. GDP.”
Despite the doomsday predictions from Cruz and the rest of the 2016 Republican field, the report also predicted large increases in employment. By increasing the federal minimum wage to at least $10.10, low wage earners would experience a recovery of real income the likes of which we haven’t seen in decades.
However, the federal minimum wage has not budged by even a penny, leaving wage increases largely to states or large American cities, exactly the sort of decentralized political process Cruz would be expected to support: Los Angeles, San Francisco, Seattle have all instituted $15 per hour minimum wages following concerted efforts by local organizations that stemmed partly from frustration over partisan gridlock in Washington. Both California and New York’s governors signed bills this year approving wage increases to the $15 an hour benchmark over a period of time. A total of 29 states, and Washington, D.C., have instituted their own minimum wages exceeding the federal minimum wage, as a result of slow progress on the federal level.
Since the minimum was last raised to $7.25 in 2009, it has lost 8.1 percent of its purchasing power as a result of inflation, according to Pew Research. The OECD has described the American minimum wage as an outlier amongst wealthy, industrialized nations — it should really be around $12, if we were to use GDP per capita as a guide. American workers are in desperate need of a minimum wage increase, not just poorly paid employment.
By: Saif Alnuweiri, The National Memo, April 29, 2016
“Protecting Conservative Principles”: Alabama Blocks Local Control On Minimum Wage
It’s been nearly two years since Oklahoma Gov. Mary Fallin (R) announced that her state would not only ignore calls for a higher minimum wage, but also that the state law would block any effort by local Oklahoma communities to raise wages at the municipal level. In other words, if a city in Oklahoma wanted a higher minimum, the state would effectively declare, “Too bad.”
Last year, Michigan Gov. Rick Snyder (R) made the same move, prohibiting local control over minimum-wage increases. And last week, MSNBC’s Zack Roth reported on the identical circumstances playing out the same way in Alabama.
Birmingham, Alabama, raised the city’s minimum wage to $10.10 an hour on Tuesday. Two days later, the state took it away.
Alabama passed a bill Thursday, largely along party lines, that bars cities and counties from raising the minimum wage or requiring employers to provide leave or other benefits. Because the law applies retroactively, it wipes out Birmingham’s raise.
Republican legislative leaders fast-tracked the bill in order to pass it before Birmingham’s raise was set to take effect March 1. The GOP enjoys super-majorities in both houses. Within an hour or so of the bill’s passage, Gov. Robert Bentley (R) announced he had signed it.
It’s amazing how quickly Republican policymakers can move when they feel strongly about an issue. In this case, their zeal applied to blocking a city that wanted to raise its own minimum wage.
The L.A. Times reported that there are now 17 states that prohibit their own cities from raising a local minimum wage – because if there’s one thing the right believes in as a bedrock principle of their entire ideology, it’s the importance of local control, except when Republicans decide they actually believe the exact opposite.
As we discussed the last time this came up, contemporary conservatism generally celebrates the idea that the government that’s closest to the people – literally, geographically – is best able to respond to the public’s needs.
But when communities consider progressive measures Republicans don’t like, those principles are quickly thrown out the window.
So, let this be a lesson to everyone: when officials in Washington tell states what to do, it’s an outrageous abuse and clear evidence of government overreach. When states tell cities what to do, it’s protecting conservative principles.
By: Steve Benen, The Maddow Blog, February 29, 2016
“Liberals And Wages”: Public Policy Can Do A Lot To Help Workers Without Bringing Down The Wrath Of The Invisible Hand
Hillary Clinton gave her first big economic speech on Monday, and progressives were by and large gratified. For Mrs. Clinton’s core message was that the federal government can and should use its influence to push for higher wages.
Conservatives, however — at least those who could stop chanting “Benghazi! Benghazi! Benghazi!” long enough to pay attention — seemed bemused. They believe that Ronald Reagan proved that government is the problem, not the solution. So wasn’t Mrs. Clinton just reviving defunct “paleoliberalism”? And don’t we know that government intervention in markets produces terrible side effects?
No, she wasn’t, and no, we don’t. In fact, Mrs. Clinton’s speech reflected major changes, deeply grounded in evidence, in our understanding of what determines wages. And a key implication of that new understanding is that public policy can do a lot to help workers without bringing down the wrath of the invisible hand.
Many economists used to think of the labor market as being pretty much like the market for anything else, with the prices of different kinds of labor — that is, wage rates — fully determined by supply and demand. So if wages for many workers have stagnated or declined, it must be because demand for their services is falling.
In particular, the conventional wisdom attributed rising inequality to technological change, which was raising the demand for highly educated workers while devaluing blue-collar work. And there was nothing much policy could do to change the trend, other than aiding low-wage workers via subsidies like the earned-income tax credit.
You still see commentators who haven’t kept up invoking this story as if it were obviously true. But the case for “skill-biased technological change” as the main driver of wage stagnation has largely fallen apart. Most notably, high levels of education have offered no guarantee of rising incomes — for example, wages of recent college graduates, adjusted for inflation, have been flat for 15 years.
Meanwhile, our understanding of wage determination has been transformed by an intellectual revolution — that’s not too strong a word — brought on by a series of remarkable studies of what happens when governments change the minimum wage.
More than two decades ago the economists David Card and Alan Krueger realized that when an individual state raises its minimum wage rate, it in effect performs an experiment on the labor market. Better still, it’s an experiment that offers a natural control group: neighboring states that don’t raise their minimum wages. Mr. Card and Mr. Krueger applied their insight by looking at what happened to the fast-food sector — which is where the effects of the minimum wage should be most pronounced — after New Jersey hiked its minimum wage but Pennsylvania did not.
Until the Card-Krueger study, most economists, myself included, assumed that raising the minimum wage would have a clear negative effect on employment. But they found, if anything, a positive effect. Their result has since been confirmed using data from many episodes. There’s just no evidence that raising the minimum wage costs jobs, at least when the starting point is as low as it is in modern America.
How can this be? There are several answers, but the most important is probably that the market for labor isn’t like the market for, say, wheat, because workers are people. And because they’re people, there are important benefits, even to the employer, from paying them more: better morale, lower turnover, increased productivity. These benefits largely offset the direct effect of higher labor costs, so that raising the minimum wage needn’t cost jobs after all.
The direct takeaway from this intellectual revolution is, of course, that we should raise minimum wages. But there are broader implications, too: Once you take what we’ve learned from minimum-wage studies seriously, you realize that they’re not relevant just to the lowest-paid workers.
For employers always face a trade-off between low-wage and higher-wage strategies — between, say, the traditional Walmart model of paying as little as possible and accepting high turnover and low morale, and the Costco model of higher pay and benefits leading to a more stable work force. And there’s every reason to believe that public policy can, in a variety of ways — including making it easier for workers to organize — encourage more firms to choose the good-wage strategy.
So there was a lot more behind Hillary’s speech than I suspect most commentators realized. And for those trying to play gotcha by pointing out that some of what she said differed from ideas that prevailed when her husband was president, well, many liberals have changed their views in response to new evidence. It’s an interesting experience; conservatives should try it some time.
By: Paul Krugman, Op-Ed Columnist, The New York Times, July 17, 2015
“A Major Issue In The 2016 Elections”: Walker Dismisses Minimum Wage As ‘Lame’
Just a few weeks before his re-election bid, Wisconsin Gov. Scott Walker (R) was asked whether minimum-wage laws should even exist. The Republican governor replied, “Well, I’m not going to repeal it but I don’t think it’s, I don’t think it serves a purpose.”
Seven months later, shortly after kicking off his GOP presidential campaign, Walker went just a little further. The Washington Post reported:
Scott Walker appeared to take aim at the national minimum wage on Monday evening, referring to it as one of many “lame ideas” pushed by Democrats.
Walker’s comment came in a lengthy interview with Fox News’s Sean Hannity immediately following a speech formally announcing his entrance into the 2016 presidential race. Walker said the next president needs to speak the language of the industrial Midwest and connect with the working class.
According to the video, eagerly disseminated by Democratic officials, Walker told the Fox News host, “The left claims that they’re for American workers and they’ve just got just really lame ideas – things like the minimum wage.”
In context, there was nothing to suggest the governor was talking about his opposition to a minimum-wage increase, so much as the existence of the minimum wage itself. To hear Walker tell it, the law is a “lame” benefit for American workers.
It’s a pretty provocative move for a national candidate – increasing the minimum wage is one of the more popular ideas in the country right now, enjoying broad support for a wide range of voters. Just a month ago, a CBS News poll found 71% of Americans want to see the minimum wage go from $7.25 an hour to $10.10 an hour – and that included a majority of self-identified Republican voters.
The Wisconsin governor, meanwhile, appears to support lowering the minimum wage to $0.
What’s just as interesting is how common this position has become in GOP circles. For decades, the debate was largely limited to those who wanted to raise the minimum wage and those who wanted to leave it unchanged. There were a few folks on the margins opposed to the law itself, but this was a fringe position that few took seriously.
This year, however, a growing number of presidential candidates are practically boasting about their hostility forwards the minimum wage. Former Texas Gov. Rick Perry (R), for example, has suggested getting rid of the minimum altogether, arguing it’s not “the government’s business” to interfere with wages. Sen. Marco Rubio (R-Fla.) has said, plainly, “I don’t think a minimum wage law works.”
Earlier this year, former Florida Gov. Jeb Bush (R), whom some see as a moderate, went so far as to say, “We need to leave it to the private sector. I think state minimum wages are fine. The federal government shouldn’t be doing this.”
Walker clearly wants to be part of the same club. Expect this to be a major issue in the 2016 elections.
By: Steve Benen, The Madow Blog, July 14, 2015
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