Wednesday, June 29, 2005

Michigan Minimum Wage Zealots

As GR Pundit readers should already know, there is a campaign in Michigan to get a proposal on the ballot to increase the state's minimum wage to $7.15 an hour. We've already pointed out how increasing the minimum wage increases unemployment, but we've come across an amusing fact about the folks who are pushing this ballot proposal.

An organization called the Association of Community Organizations for Reform Now (ACORN) is one of the prime backers of the proposal. ACORN is essentially a bunch of ill-informed socialists who campaign for living-wage and increased minimum wage laws, in addition to a whole host of other collectivist campaigns such as universal health care, "affordable housing," social[ist] security "protection," etc.

However, the funny part is that when ACORN was confronted with having to pay a "living-wage" in California, they sued the state, seeking an exemption. In ACORN's legal brief, they claim:

"The more that ACORN must pay each individual outreach worker—either because of minimum wage or overtime requirements—the fewer outreach workers it will be able to hire."

Well, that summs it up perfectly, doesn't it? Need we say more?

Oh, by the way, unemployment rates increased in 14 of Michigan's 17 major labor market areas in May. The Grand Rapids area's unemployment rate went from 5.7% in April to 6.3% in May.

Tuesday, June 28, 2005

Banning Wine Shipments?

The legislative busybodies are at it again. A committee in the State House voted to ban all in-state and out-of-state shipments of wine. Basically, they want to make it illegal to mail wine to anyone from anywhere in or out of Michigan.

This is in response to a US Supreme Court ruling that decided that it is illegal for states to ban out-of-state wine shipments while allowing in-state wine shipments. So, what does the legislature appear to want to do? Ban all shipments across the board.

One quote from the above-linked article made us chuckle:

Rep. Chris Ward, R-Brighton, said he introduced the bill because he is worried about teenagers being able to easily buy wine on the Internet without such a ban.

Give us a break. If kids want wine, you'd better believe that there are easier ways than ordering it online. Heck, that takes a lot of time to do. It would probably take the average teenager about an hour to find a friend or a friend of a friend to buy locally.

Of course, as the state expands its reach to protect us from ourselves, real people's jobs will be affected.

"It will literally kill our business," said Ed Gerten of Pentamere Winery in Tecumseh. "What we're looking for is a fair and equitable solution, but this bill is not. This bill will crush us."

As the legislature looks to fix a problem that no one has any evidence exists, they will kill another industry in Michigan and put more people out of work. Brilliant.

Monday, June 27, 2005

Limiting Growth of Government

Michigan Senator Nancy Cassis has introduced a bill to amend the state's constitution to limit the growth of state government. While there is already a constitutional provision (known as the Headlee amendment) limiting the amount of revenue the state may take in, this bill would limit the state's spending growth. The bill, called Senate Joint Resolution D, limits annual total state spending growth to the previous year's spending, plus the inflation rate, plus the state population growth rate.

This bill takes the previous year's spending and starts from there for the following year's spending limit. For instance, if the state spent $30 billion in 2002 and $29 billion in 2003, the state can increase spending a maximum of the inflation rate over the 2003 spending level rather than increasing from the highest previous point. If the inflation rate was 3%, then 2004 spending would be limited to approx $29.8 billion.

We think this is an outstanding idea. It would force constraint upon the politicians and limit government. Of course, many of the politicians will whine and complain that they won't be able to spend like crazy when the economy is good, but that's the point.

Michigan is a high tax state and jobs are fleeing like there's no tomorrow. Jobs are going to states that have low taxes and a better labor environment. This bill would address the state's insatiable appetite for taxes and begin to address the business environment problem.

Thursday, June 16, 2005

State Unemployment Rate Rises Again

Michigan's unemployment rate rose again in May, to 7.1%. In the mean time, the national unemployment rate continues to decline. It stands at 5.1%.

And the legislature and governor continue to argue over how much more money the state should borrow to "invest" in creating jobs. It's akin to trying to borrow money to invest in the stock market. No financial expert would ever suggest doing so, but our politicians need to look like they're doing something. Past government attempts at picking the economic winners and loser have failed, and they will again.

It comes down to this. Michigan is a high tax state that makes it tough for business to grow. The state single business tax is the most onerous tax in the nation. It taxes businesses even if they don't make a profit. Heck, it even taxes companies when they pay for health care for their workers.

If the governor and legislature were serious about brining business to Michigan, they would do a few things:

  • Eliminate the single business tax
  • Eliminate the cap on charter schools to inject competition in education
  • Reduce state government red tape

    The state house passed next year's budget with no increase in spending and no increases in taxes. Of course, this is sending the governor into a tizzy, who wants to increase taxes on liquor, vending machines, and doctors. Apparently she doesn't get it. Increased taxes kill jobs.

    That Which is Seen and that Which is Not Seen.