Tag Archives: Unions

News

U.S. cities face half a trillion dollars in public pension deficits

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Story from CNBC. (H/T ECM)

Excerpt:

Big US cities could be squeezed by unfunded public pensions as they and counties face a $574 billion funding gap, a study to be released on Tuesday shows.

The gap at the municipal level would be in addition to $3,000 billion in unfunded liabilities already estimated for state-run pensions, according to research from the Kellogg School of Management at Northwestern University and the University of Rochester.

“What is yet to be seen is how this burden will be distributed between state and local governments and whether the federal government will be called upon for bail-outs,” said Joshua Rauh of the Kellogg School.

The financial demands of unfunded pension promises come as state and local governments grapple with years of falling tax revenue related to the recession.

The combination has raised concern that defaults, which are historically rare in the $2,800 billion municipal bond market where local governments obtain money, could now rise.

“The bondholders would be competing with the pension beneficiaries for scarce government resources,” Mr Rauh said.

Current pension assets for plans sponsored by Philadelphia can only pay for promised benefits through 2015, while Boston and Chicago would deplete their existing funds by 2019.

Cincinnati, Jacksonville, Florida and St Paul have current pension assets that can only pay for promised benefits through 2020.

Local governments use unique accounting methods that many, such as Mr Rauh, believe understate obligations. Based on his estimates, which use US Treasuries as the benchmark, each household already owes an average of $14,165 to current and former municipal public employees in the 50 cities and counties studied.

“Philadelphia has the most immediate cause for concern, as the city can pay existing promises with existing assets only through 2015,” Mr Rauh said, assuming an 8 percent annualized return, the most common benchmark for municipal plans.

In New York City, San Francisco and Boston the total is more than $30,000 a household and, in Chicago, it tops $40,000.

Taxpayers in these areas risk not only local tax increases and service cuts to pay for benefits, but potentially some of the bill for the $3,000 billion unfunded obligations at the state level, the researchers say.

Notice how all the worst offenders are Democrat strongholds. They don’t know how to manage their finances!

News

What causes rich Democrats to lay off Americans and ship jobs overseas?

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First off, I spotted this American Spectator story by Robert Stacy McCain on The Other McCain.

Excerpt:

California Democrat Rep. Jane Harman’s family business is laying off American workers – including engineering employees in California – and shifting jobs overseas.

A letter from the human resources director of one Harman company, obtained exclusively by The American Spectator, describes a “permanent” layoff of dozens of California workers that went into effect last week.

[…]Harman is the third-richest member of Congress, and her net worth increased last year $40 million, according to a study of Federal Election Commission records conducted by The Hill newspaper. Her husband, Sidney Harman, founded Harman International Industries, which was valued in 2007 at about $8 billion.

[…]By May 2009, the company had already slashed its U.S. workforce by 900 and expected to make more than a thousand more layoffs by mid-2010, according to a Saturday Evening Post article that noted: “[W]hile shutting down U.S. facilities, Harman was simultaneously opening factories in China and India, as well as massive multimedia outlets in Dubai and New Delhi.”

She’s a rich Democrat… and she is shipping American jobs overseas? Why???

Well, California is an anti-business state and it’s run by socialist Democrats who hate businesses and capitalism. (H/T ECM)

But what about other countries? Why do they ship jobs overseas?

Look what is happening in New Zealand with the new Hobbit movie. (H/T Anon)

Excerpt:

At least half a dozen countries, including Australia, are lobbying to win the right to film The Hobbit and Hollywood accountants are now doing the numbers of rival offers, the movie’s co-producer and co-writer Phillipa Boyens says.

The $US150 million Sir Peter Jackson blockbuster has been mired in an industrial dispute in recent weeks, following complaints from a group of international labour unions over poor on-set working conditions for actors.

Jackson, who strenuously denies the claims, has accused the Australian-based Media Entertainment and Arts Alliance of bullying to gain control over the production, which he says may be forced out of New Zealand.

Boyens told New Zealand’s National Radio’s Nine to Noon programme the movie was ready to begin filming in January but has now been thrown in turmoil by the actors’ boycott.

She said New Zealand Actors’ Equity seemed to believe the whole thing was a bluff.

“I am concerned over some of the statements made… by New Zealand Equity that there is still a misunderstanding on the seriousness of what is involved here and what is at stake,” she said.

“That is very real and that has put at risk the livelihood of countless thousand New Zealand industry workers,” she said.

Scotland, Ireland, Canada and Eastern European countries had entered the negotiations in a “feeding frenzy” inspired by the threat of union action.

And it’s not just left-wing anti-capitalist governments and unions that cause outsourcing and shipping jobs overseas.

It’s the uncertainty caused by massive spending, constant interventions, anti-business regulations, the appointment of radical anti-capitalists and judicial activists to positions of power.

Here’s a story from Reuters.

Excerpt:

Tough budget measures to keep its international bailout on track have helped prompt thousands of Romanian companies to relocate to neighboring Bulgaria, where lower taxes and more stable regulations offer an easier place to do business.

Bulgaria has corporate and income tax on profits of just 10 percent, compared with Romania’s 16 percent, and now also has lower value added tax after Bucharest hiked its rate as part of efforts to meet the conditions of a 20 billion euro EU/IMF bailout.

Sofia has also cut red tape and initial capital for setting up a company is now 2 levs ($1.39), compared with a previous 5,000 levs and 200 lei ($63.55) in Romania. It takes less than a week, almost half the time needed in Romania.

That may seem like small beer, but business people say the speed of the changes forced by the bailout and uncertainty over future cuts in Romania have encouraged them to move base.

Bulgarian authorities have not released precise data, but local media report up to 2,500 Romanian companies have set up there already and another two are registering daily in the border city of Ruse alone.

“Romanian legislation and taxation are changing from one day to another. So how can I have any guarantee, any certainty if I open a company here?” said 23-year-old Bogdan Popescu from Bucharest, who wants to open an online television business.

“I could as well wake up with a 40 percent income tax tomorrow (instead of 16 at present),” said Popescu, who plans to put his headquarters in Bulgaria. “The present fiscal legislation is in no way a stimulus.”

The two Balkan countries share a long border and though links can be complicated — only one bridge connects the states along a 470 kilometer (294 miles) stretch of the Danube — companies can set up a paper headquarters but still effectively run operations from Romania.

Both suffered deep and painful recession after 2008’s financial crisis, but while Romania is having to cut spending and raise taxes, Bulgaria previously ran large fiscal surpluses and has enough reserves to keep taxes low despite dwindling revenues.

Whenever government and their union supporters make life difficult for businesses, the businesses leave. Governments and unions ship jobs overseas. Governments and unions outsource jobs to other countries. Businesses just dance the the tune that governments and unions play. It’s no use complaining about big corporations and rich greedy executives. If you want a job then you promote the conditions that will attract businesses. Left-wing unions, left-wing political parties, left-wing news media and left-wing judges attack businesses, and that’s why unemployment goes higher.

And businesses know that massive government spending is going to require higher taxes or printing more money to that will devalue savings. They are not going to expand in banana republic economies like the United States until we vote a large enough number of Democrats out of all three branches of the federal government.

What I resent is when rich Democrats create the legal conditions that require companies to outsource and then complaining about outsourcing while engaging in outsourcing themselves. That’s hypocrisy.

News

Obamacare’s impact on ER wait times and low-wage workers

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First, ER wait times. (H/T ECM)

Excerpt:

As the number of insured people goes up while health care reform takes place, the long waits and crowded lobbies at emergency rooms are anticipated to increase as well.

“We’re starting out with crowded conditions and anticipating things will only get worse,” American College of Emergency Physicians president Dr. Angela Gardner told the Associated Press.

Nearly 32 million more people will have health insurance as a result of changing health-care laws, and about 16 million are to be added to the Medicaid system, but that apparently won’t keep them out of the ER, the AP reported.

“Just because we’ve insured people [that] doesn’t mean they now have access,” Dr. Elijah Berg from Boston told the AP. “They’re coming to the emergency department because they don’t have access to alternatives.”

[…]Since 2006, when it began offering government-run health care to its residents, Massachusetts has been considered the test model for the federal health changes, requiring health coverage for everyone, but data has shown visits to the ER have continued to rise since the Massachusetts law took place.

ERs are already overly crowded, with the biggest users being those under the federal Medicaid plan. Many doctors limit the number of Medicaid patients that they see because of the low rate of reimbursement from the government.

Here’s what should have happened. Voters should have looked at Massachusetts and Tennessee and seen what government control of health care does to health care. Universal coverage increases demand, but supply stays the same because of onerous certifications, taxes and regulations that block new entrants. Somewhere along the line there will be a shortage. And that means waiting lists, abortion, denial of care, and eventually euthanasia in order to keep costs down.

But there’s more – from the Heartland Institute.

What about Obamacare’s impact on low-wage workers? (H/T Rob)

Excerpt:

The requirements of President Obama’s new health care regime could penalize low-wage workers and cause a further slowdown of hiring for positions at chain restaurants and other small businesses.

White Castle, a national fast food chain, recently announced it would slow planned expansion in the United States and curtail hiring at its numerous restaurant outlets thanks to Obama’s law, which the chain says will cut its earnings in half.

According to a White Castle representative, the requirement that employers pay a $3,000 fine to the federal government for every employee whose out-of-pocket cost of health insurance exceeds 9.5 percent of their income will destroy their business model.

[…]Diana Furchtgott-Roth, a health care analyst at the Hudson Institute in Washington, DC, says much of this process is out of the employer’s control.

[…]Furchtgott-Roth says this aspect of Obamacare is part of a larger trend toward government pricing low-skilled workers out of the U.S. economy.

“The burden of all these Obamacare provisions is going to fall more on America’s low-skilled workers—the workers at White Castle, Burger King, and so on. Because their labor will become more expensive for companies to use, we’re going to see more mechanized solutions, a trend that is already happening in Europe,” Furchtgott-Roth said.

Well, some of these people who don’t pay income taxes are certainly going to be getting a wake-up call. Larger companies like John Deere, Verizon, Valero, Caterpillar, etc. already announced that they were going to be taking huge hits to their bottom line as a result of Obamacare. All these good intentions and high-minded blabberings don’t amount to any benefits for American working families. Happy-talk wins elections, but it doesn’t pay the bills or feed the children.

Next time, we need to be more diligent at looking at what actually happens in other countries and even in our own states when people try to nationalize health care in order to provide universal coverage. We can have universal coverage – we just need to let people choose what level of coverage they want and we need to make market reforms to the health care industry. Choice and competition works better for consumers. That’s real health care reform.