Ohio Nearly Surrounded by Right-to-Work States

A right-to-work law says that workers cannot be forced to pay union dues as a condition of employment. In just the past 12 months, three states–Missouri, Kentucky, and West Virginia–have enacted right-to-work laws. Two of those three states border Ohio. In recent years, two other states bordering Ohio passed right-to-work laws: Indiana in 2012, and Michigan in 2013. Ohio is now nearly surrounded by right-to-work states; the only remaining state that borders Ohio without a right-to-work law is Pennsylvania.

Ohio better wake up before it starts losing jobs to neighboring states. I know that if I had to decide on locating a business, all else equal, I would rather locate in a right-to-work state. Most employers know from experience that they’re better off not having to deal with a union.

If Ohio’s state government does not want to act on right-to-work, another option is that cities and counties could take matters into their own hands. One of the many interesting recent developments on the right-to-work front is that, this past November, the Sixth Circuit Court of Appeals ruled that local governments can enforce right-to-work statutes.

[W]hat if the state decides not to enact right to work legislation but one of its counties does?  Is a county ordinance that effectively makes it a “right to work county” entitled to the same deference as a state law?

According to one court of appeals, the answer to this question is yes.  In a recent decision UAW v. Hardin County, Kentucky et al., No. 16-5246 (6th Cir. November 18, 2016), the Sixth Circuit Court of Appeals ruled that county right to work laws do not conflict with federal labor law and may be enforced.

It will be very interesting to see if some conservative counties in liberal states try to enact right-to-work. This could be an effective way to try to lure employers into the county. I’m guessing, however, that a liberal state government opposed to right-to-work would have the authority to bring a renegade county to heel. We’ll have to see how this situation unfolds.

In any event, the argument made in favor of right-to-work is usually based on personal liberty: workers should be free to choose not to join the union. The liberty case for right-to-work, however, is somewhat ambiguous. Some libertarians, including Milton Friedman, have opposed right-to-work on the grounds that the law infringes on freedom of contract. The idea is that if a union and an employer mutually and voluntarily agree to a contract that sets union membership as a condition of employment, the law should not stop them from doing so.

In December 2012, libertarian writer J.D. Tuccille, in Reason magazine, wrote: “I consider the restrictions right-to-work laws impose on bargaining between unions and businesses to violate freedom of contract and association. … I’m disappointed that the state has, once again, inserted itself into the marketplace to place its thumb on the scale in the never-ending game of playing business and labor off against one another. … This is not to say that unions are always good. It means that, when the state isn’t involved, they’re private organizations that can offer value to their members.”

When it comes right down to it, most people base their position on right-to-work not on liberty arguments, but on whether they are pro or anti-union. Pro union forces accuse right-to-work proponents of trying to bust up unions. My only defense to that accusation would be: You say ‘union busting’ like that’s a bad thing.

Yet another fascinating legal development is a pending lawsuit that challenges the constitutionality of mandatory union dues in government employment. The suit was filed in Illinois and bases its argument on the First Amendment.

“Everything government unions do is political in nature, and if it is political in nature, then the First Amendment is going to cover it, and workers can’t be required to pay anything to unions as a condition of keeping their job in government,” said Mark Mix, of the National Right to Work Legal Defense Foundation.

This lawsuit seems like a bit of a long shot, but if successful, it would effectively impose right-to-work on government employment all across the country. That would be YUGE because it would finally cripple the racket run by Democrats whereby politicians shower unions with taxpayer money who then funnel a cut of the money into Democrat campaign coffers. Thus the public employee union effectively enables the Democrat Party to vote itself taxpayer money.

Right-to-work has made remarkable progress in just the last few years. Let’s hope the momentum continues.

The Minimum Wage is Racist (Bumped)

The amazing Thomas Sowell, still writing a regular column at the age of 84, reminds us of the racist legacy of minimum wage laws.

It is not a breakthrough on the frontiers of knowledge that minimum wage laws reduce employment opportunities for the young and the unskilled of any age. It has been happening around the world, for generation after generation, and in the most diverse countries.

Thomas Sowell

Thomas Sowell

[…]

Low-income minorities are often hardest hit by the unemployment that follows in the wake of minimum wage laws. The last year when the black unemployment rate was lower than the white unemployment rate was 1930, the last year before there was a federal minimum wage law.

The following year, the Davis-Bacon Act of 1931 was passed, requiring minimum wages in the construction industry. This was in response to complaints that construction companies with non-union black construction workers were able to underbid construction companies with unionized white workers (whose unions would not admit blacks).

Looking back over my own life, I realize now how lucky I was when I left home in 1948, at the age of 17, to become self-supporting. The unemployment rate for 16- and 17-year-old blacks at that time was under 10 percent. Inflation had made the minimum wage law, passed ten years earlier, irrelevant.

But it was only a matter of time before liberal compassion led to repeated increases in the minimum wage, to keep up with inflation. The annual unemployment rate for black teenagers has never been less than 20 percent in the past 50 years, and has ranged as high as over 50 percent.

[…]

Incidentally, the black-white gap in unemployment rates for 16-year-olds and 17-year-olds was virtually non-existent back in 1948. But the black teenage unemployment rate has been more than double that for white teenagers for every year since 1971.

In a free labor market, unhindered by the minimum wage, the equilibrium wage adjusts to equate the number of qualified job seekers with the number of available positions. In this case, the market is said to “clear,” and many employers will hire a capable black teenager rather than see a position go unfilled.

But if a minimum wage is imposed, the market no longer clears, and there results a surplus of labor. Employers have more qualified applicants than available positions. The same black teenager now finds himself competing for a single job with a white teenager. The employer might evaluate the two workers nearly equally, and would hire them both if only he had two positions. But with only one position available, he is forced to choose, and even the slightest degree of prejudice means that the black teenager doesn’t get the job. In this way, the minimum wage invites discrimination and greatly exacerbates the effects of employer prejudice.

Students take note. All your professors say that racial discrimination is morally abhorrent and that they would oppose any policy that increases discrimination. At the same time, most of them also support the minimum wage, and none of them perceives the contradiction.

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The Minimum Wage Has Nothing To Do With Helping Low-Wage Workers

Supporters of the minimum wage always sell the policy as a way of helping low-wage workers. The truth of the matter is more nearly the opposite; the minimum wage is intended, and has always been intended, to disadvantage low-wage workers. This conclusion is supported by nearly 100 years of history.

Consider the minimum wage imposed by Congress on the District of Columbia back in 1918. This minimum wage applied only to women, not to men. Was this policy a way of helping working women, to ensure that their labor wouldn’t be exploited? Why, no, the policy was designed to help men by pricing women out of the labor market. And so, when a lady elevator operator lost her job to a man who could legally be paid less, she sued, and the case went all the way to the Supreme Court. The Court ruled the minimum wage to be discriminatory, and stuck down the law.

One hundred years later, not much has changed, except that the Supreme Court no longer so reliably defends economic freedom. And so we have the spectacle of the Los Angeles County Federation of Labor, which last year successfully lobbied for a $15 minimum wage in the city of Los Angeles, and this year lobbied for the same minimum in Santa Monica. In both cities, however, the union argued that its own members, like male workers in 1918, should be exempt. Minimum wage for thee, but not for me.

If the minimum wage is so great for workers, why does the union ask for an exemption? Answer: To increase the cost to employers of hiring non-union workers.

The labor union that led the charge for a $15 minimum wage hike in cities across California is now moving to secure an exemption for employers under union contracts.

The Los Angeles County Federation of Labor buried the exemption on the eighth page of its 12-page proposal for the Santa Monica City Council to review Tuesday while deciding whether to follow Los Angeles and increase the minimum wage.

The loophole would allow employers with collective bargaining agreements to sidestep the wage hike and pay their union members below the proposed $15-per-hour minimum wage…

The move in Santa Monica is not the federation of labor’s first attempt to compound a collective bargaining exemption into a minimum wage increase.

The federation received an outpouring of criticism when it attempted to push the same carve-out for unionized employers after Los Angeles decided to increase its minimum wage from $9 to $15.

“This is hypocrisy at its worst,” the Los Angeles Times wrote in a blistering editorial. “It plays into the cynical view that the federation is more interested in unionizing companies and boosting its rolls of dues-paying members than in helping poor workers.”

And that, Charlie Brown, is what the minimum wage is all about.

Gammon’s Law and the TSA (Bumped)

In a 1991 article in the Wall Street Journal, Milton Friedman explained Gammon’s Law, which states that large, bureaucratic organizations become black holes that suck in more and more funds, but produce no more.

Some years ago, I came across a study by Max Gammon, a British physician who also researches medical care, comparing input and output in the British socialized hospital system. He took the number of employees as his measure of input and the number of hospital beds as his measure of output. He found that input had increased sharply, while output had actually fallen. He was led to enunciate what he called “the theory of bureaucratic displacement.” In his words, in “a bureaucratic system . . . increase in expenditure will be matched by fall in production. . . . Such systems will act rather like `black holes,’ in the economic universe, simultaneously sucking in resources, and shrinking in terms of `emitted production.'”

Gammon’s study didn’t stop the British government, under Tony Blair, from trying to improve the flagging performance of the healthcare system by pouring money into it. Over a period of about 10 years, the amount of funding was nearly doubled. Yet performance hardly changed. The system is just a black hole, a money pit.

Gammon’s Law has innumerable applications. Consider the Transportation Safety Administration. The folks at TSA didn’t perform very well on their latest tests. In fact, they were able to catch only about 5 percent of contraband items.

Department of Homeland Security said Monday that the acting administrator for the Transportation Security Administration would be reassigned, following a report that airport screeners failed to detect explosives and weapons in nearly every test that an undercover team conducted at dozens of airports. According to a report based on an internal investigation, “red teams” with the Department of Homeland Security’s Office of the Inspector General were able to get banned items through the screening process in 67 out of 70 tests it conducted across the nation.

The failed tests included, for instance, having a tester walk through security with a fake bomb taped to his back. The fake bomb sets off an alarm at the scanning machine, but agents doing the subsequent pat down fail to locate the device. Top notch!

So: a success rate of 5 percent. Good enough for government work?

When the TSA performed poorly on tests back in 2009, the attempted solution was to spend more money. Guess how that worked out.

In addition, the review determined that despite spending $540 million for checked baggage screening equipment and another $11 million for training since a previous review in 2009, the TSA failed to make any noticeable improvements in that time.

$551 million spent, and nothing to show for it, just a black hole, as Gammon’s Law would predict.

Government has no money of its own–that $551 million had to be taken from the taxpayers. If left in their hands, the taxpayers would have put that money to good use. If a new home costs $250,000, then $551 million amounts to 2,204 new homes. Assuming 2.5 persons per household means that the money wasted by TSA would put 5,510 people in new homes, bought and paid for. Instead…nothing.

TSA should be abolished, and responsibility for security placed where it belongs–with the airlines. But abolishing TSA seems a political impossibilty. Think about it; have you heard any prominent member of the Political Class propose abolishing TSA? Democrats love TSA because it provides union jobs and therefore Democrat campaign cash. Republicans love TSA because it shields large corporations–the airlines–from accountability. Only the traveling public dislikes TSA, but that is of little concern to the Political Class.

Finally, consider the video below in which John Stossel documents the inefficiency of TSA. Our favorite bit starts at about 5:10 and concerns Glacier Park International Airport, which serves Montana’s Glacier National Park. The airport’s director explains that TSA assigns her airport the same number of screeners year round, even though traffic triples during the summer tourist season. That’s government. But how would the private sector handle it? Does anybody really believe that the private sector, in response to a tripling of demand, would remain totally unresponsive and inflexible, the way the TSA does?

Compared to today, life in the 19th century was simpler, and change came gradually and infrequently. In those days, the relative inefficiency of government perhaps mattered less. So Bismarck or the Russian Czar could bureaucratize social services without a catastrophic loss of efficiency. The bureaucrats moved slowly, but in the 19th century, so did everything else.

But now we’re in the 21st century, and in this complex and rapidly changing world, it makes no sense to put important tasks such as airline safety, schooling, or health care in the hands of incompetent and sclerotic bureaucracies–behemoths that reason with the cognitive ability of a cow and react with the dexterity of a decrepit elephant.


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Government fires employee who skipped work for 24 years

A story from Reuters

New Delhi: AK Verma, an executive engineer at the Central Public Works Department, was fired after last appearing for work in December 1990.

“He went on seeking extension of leave, which was not sanctioned, and defied directions to report to work,” the government said in a statement on Thursday.

Even after an inquiry found him guilty of “wilful absence from duty” in 1992, it took another 22 years and the intervention of a cabinet minister to remove him, the government said.

India’s labour laws, which the World Bank says are the most restrictive anywhere, make it hard to sack staff for any reason other than criminal misconduct.

States, led by Rajasthan and Madhya Pradesh, have recently changed the law to make it easier to hire and fire staff, in a move welcomed by industry leaders but opposed by labour unions.

We’re not really sure how unusual this is.  Keep in mind that 24 years is just 4 terms in the U.S. Senate.

Did You Hear the Cops Finally Busted Madame Marie?

From the N. Y. Daily News here is an amazing story in so many different ways:

The head of the city’s powerful police union has told rank-and-file officers to go back to issuing tickets, summonses and making low-level arrests — but not too zealously, the Daily News has learned.

Patrolmens Benevolent Association President Patrick Lynch told union trustees to spread the word, a source said Thursday.

“He said they should go back to at least 50% of what they used to do,” the police source said.

Just one takeaway question: How does a union boss end up with more power to control police policy than the mayor or the people that actually pay their wages?

The Minimum Wage Should be $0.00

This video from Prager University covers nearly all the major issues with the minimum wage, and it does so in just 5 minutes. Students who watch this video carefully will understand more about the minimum wage than do the vast majority of their professors. Well, not their economics professors, but their other professors.

 

Taxi Association President Compares UberX To ISIS Terrorists

Via the Business Insider:

It’s not often you hear ride-sharing compared to a terrorist group.

But that’s exactly what happened at a Philadelphia Parking Authority board meeting on Tuesday when President of the Pennsylvania Taxi Association Alex Friedman had some choice words about their competitor.

“I try to equate this illegal operation of UberX as a terroristic act like ISIS invading the Middle East,” said Friedman. “It is exactly the same menace.”

Free market competition vs. Islamic Caliphate? It seems like a stretch, but then again, if anyone knows about the effective use of terror tactics it’s a union rep.

The Wages of LA

Here is a recent story about government plans to raise wages from the LA Times:

Los Angeles Mayor Eric Garcetti is circulating a plan to raise the city’s minimum wage to $13.25 an hour over three years, followed by annual boosts keyed to inflation, according to business representatives and City Hall officials.

The action is expected to be announced on Labor Day.

So far, the proposal has received a cool reception from major business groups worried about the effect on payroll and the possibility that higher wages could drive jobs out of the city. Even some labor leaders dislike it because the hourly wage does not immediately rise to at least $15, a goal that unions have been pursuing for months to help their members cope with the city’s high cost of living.
 

Sad. When your policies are based on vast economic ignorance you get a crappy, barely growing economy that cannot produce enough new jobs to naturally raise wages higher through competition. So you have to double down on ignorant economic policies that conspire in a vicious circle to yield a further crappy economy. Ergo policies that keep people poor and suffering, which is exactly in the interest of politicos seeking power.

If you can’t beat them….

The fact that regulators often end up working for firms in the industry being regulated is one of the predictions of regulatory capture theory.    So it shouldn’t be surprising that the early establishment of a legal pot industry in two states would open up some job opportunities for former DEA agents:

If you can’t arrest them, why not go to work for them? That’s what some local and federal law enforcement officers are doing in Colorado and Washington, the nation’s first two states to legalize commercial marijuana.

Trained in special weapons tactics, Craig Kloppenberg used his 30 years on SWAT teams arresting pot dealers to become a private consultant for pot producers in Colorado.

He and another ex-cop, Joel Smith, work together to help about a dozen suppliers stay within the confines of the new law.

“If you could make more money, give a better life to your family, why not?” Kloppenberg told CNBC. “I believe it’s going to be very lucrative.”

Even former Drug Enforcement Administration (DEA) agents are cashing in on the new industry.

Paul Schmidt worked for the DEA for 23 years, investigating more than 100 illegal marijuana operations.

Now, the retired federal agent teaches seminars to medical marijuana dispensaries on doing business and not violating the law.