ObamaCare, the Federal Finances, and the Upcoming Labor Shortage

As I write this, President Obama, Congress, and the Senate are negotiating a budget deal that would keep the federal government paying its bills after October 1, 2013. Politics aside, it's odd that the politicians would continue to get paid on time while those serving in the military as still required to report for duty and perform their normal duties but don't get paid--they get an IOU. Try buying groceries or gas with that. But I digress...

Much has been mentioned of Obamacare, a/k/a the Affordable Care Act. Let's clear up one point of confusion: it's the same thing. Public approval of it tends to be different depending on what it's called (http://www.huffingtonpost.com/2013/09/26/president-obama-approval_n_3998516.html). Even the source of the polls tends to make a distinct difference (http://www.realclearpolitics.com/epolls/other/obama_and_democrats_health_care_plan-1130.html). I'll end this thought by saying this: it's hard to know how it'll really effect all Americans until it becomes fully implemented, and while mandatory insurance has proven unpopular in several polls, many other provisions (allowing college students to stay on parents' insurance longer, not being allowed to discriminate based on age or preexisting conditions, etc.) tend to be popular across party lines.

Many have said that costs will go up, especially when commenting on Republican blogs (see "Positively Republican" on Facebook). This is true, but health care has increased in cost every year I've been alive. I suggest that more be done to investigate the cause of rising prices both in past years and 2014 without looking at 2014 increases by themselves.

Finally, in an earlier blog, I commented about the increase of part-time workers. Today I looked into the Bureau of Labor Statistics numbers (http://www.bls.gov/news.release/empsit.t09.htm). It shows that, seasonally adjusted, part-time workers are increasing while full-time employees are relatively stagnant. Some will say this is because Obamacare (a/k/a Affordable Care Act) forces employers to pay health insurance to those with over 50 employees who work over 32 hours a week. Note those exceptions: both over 50 employees and working over 32 hours a week; thus, many small employers are exempt because they don't have 50 employees. Those who do can choose to pay the penalty inherent with not offering health insurance, but there's a risk.

The risk is that, with the increase of part-time employees without a simultaneous increase in the labor force, there will be a supply constraint. Employers will need more part-time employees if they don't hire full-time employees, and they'll need either full-time employees to add a part-time job, the existing full-time employees to work more, or lure part-time employees from other jobs. All options are inflationary because of the limited number of part-time employees in the labor pool.

This will truly be a spectacle of economic forces as supply and demand of the labor force take effect. 

The Law of Unintended Consequences: Unemployment....?

http://www.ridersny.org/wp-content/uploads/2012/08/dollar-sign-image.jpg
The unemployment rate remains at or close to 7%, several years into the nation's "recovery" after the Lehman Brothers' bankruptcy and subsequent financial events that commenced five years ago. Still, with all the unemployment, I see many lower-wage jobs (predominantly restaurant and retail) going unfulfilled. Why is this?

Some will say that there's little benefit to some because the federal subsidies for not working are greater than the monetary reward (paychecks) for working. So I did some research:

1) In Wisconsin, the average food stamp benefit for one person is $116.50/week (http://www.fns.usda.gov/pd/18SNAPavg$PP.htm). That's $16/day, which isn't too bad...

2) The maximum unemployment is $363/month (http://www.wisconsinunemployment.us/benefits). I don't know where to live on that amount.

Together that amount is about $800/month. At $8/hour, 40 hours a week, gross pay is $1280. Because this would maximize any tax incentives to work, actual amount paid would be more at some point (tax refunds, etc.), but there'd be an immediate tax deduction of approx 10% (FICA, etc.). Still, that's at least $1150, or $350 more each month by working. Anyone who can't see the difference in an extra $80/week hasn't seen how far that can go.

The "trap" comes in if there are any unexpected financial hardships, like needing new clothes, prescriptions, or having to pay for drug tests up front to maintain state benefits (Florida). Then only a careful financial planner could be prepared for the future.

More following. I wanted to open a series of columns of unintended consequences with opening thoughts. Comments are welcome.

Unintended Consequences, Pt 1: Labor Day

On this Labor Day, I find myself working my 2nd job (as is often the case on Mondays), continuing the second job I've had for over a year. Most weeks, between both jobs, I work over 60 hours a week (sometimes over 70).

Labor Day is a holiday to remember America's workers and all they do for America has a whole. My experience reminds me that, while labor unions brought us the weekend, minimum wage, and safe working conditions (the last of which I consider the most important--time off is unimportant if you're hurt from an on-the-job injury), regulations have consequences.

The minimum wage, while historically low relative to the last time it was changed and inflation thereafter, provides a basic minimum amount to be paid. Raising it raises costs for a business and thus encourages efficiency (to minimize labor and thus maintain total labor costs)(http://www.triplepundit.com/2013/08/mcdonalds-15-minimum-wage/). Raising the minimum wage also discourages workers from improving themselves by attaining additional skills which would make them more valuable to their employers.

This wraps into "Obamacare", a/k/a the Affordable Care Act. Should the government force employers to buy insurance and/or require individuals to have insurance? The Supreme Court says "yes"; it's a tax. However, this gives both sides leverage to make improvements--the individual can improve themselves and move to a job with better insurance and the employer can offer better insurance in an attempt to recruit better employees. In each case, each can cut insurance quality to the minimum required, knowing that costs are passed on to customers and to try to maintain profitability.

Capitalism is evolving. Clearly we have more regulation than at other times in history, but we also have longer life expectancies and lead healthier lives. Regulation is good, but going too far (my favorite example is the myriad of regulations that go into every car sold in the US; http://www.caranddriver.com/features/the-cafe-numbers-game-making-sense-of-the-new-fuel-economy-regulations-feature) costs jobs and money. The key is balance, and that's sometime we all need to work toward.

How do you know you're in love?

My wide and I are celebrating 10 years together this year. (We've been married 9 of them.) I proposed on our 6-month anniversary, which didn't seem too sudden at the time, but now (now?) it's brought up questions by friends. The main question centers around: "How did you know you were in love?", followed closely by "How did you know you wanted to marry her?"

The simple answer: I didn't. Sometimes you just go on a gut hunch, and you communicate everything with your partner. (I'm trying to keep this gender neutral because--this is also a hunch--all couples have the same basic communication issues regardless of sexual orientation of the couple.)

We were "introduced" via match.com way back in the days when internet dating was unheard of and made fun of. (Sherry likes to point out that she found me online, and I should be grateful she did. Yes, I'm grateful.) Sherry and I talked almost every day in the weeks before we met, often until 1 or 2am. We'd talk about bad relationships, good relationships, family, hopes & dreams, goals--both personal and professional, and anything else that came up. We knew volumes about each other before we met.

We met in a Starbucks on a sunny June day in 2003. We chatted first inside, then by Lake Mendota. It didn't seem odd that we had more to say, even though we had been talking for weeks before. We kissed goodnight around 9 that night...no more than a kiss.

She's still my muse for many love songs. I think of her when I hear love songs from everyone from Barry Manilow to Billy Joel, from Tim McGraw to Journey. She's made me a better person--I'm both in better shape than when we met and I weigh less.

Back to the beginning of today's blog. How do you know you're in love? You value their opinion. You share your thoughts and feelings without fear of being judged. You don't feel the need to put up a false appearance in front of the person. You don't need to flirt in front of them. You look into their eyes and feel the love--even from across the room. Even a quick kiss is terrific and lifts your spirits. You don't read something into them not spending every minute with you because you each live your lives, but know that you'll be together soon. Just maybe not soon enough.

How do you know you're ready for marriage? Common hopes and dreams are good, but worthless without ongoing communication of those goals to the other.

Finally, there are no guarantees of a happy marriage " 'til death do you part". Marriage is a lifelong job, and there are many days when it's hard work. There are days when I frustrate Sherry and she's not as happy with me as she is on other days. However, the love she has for me pulls her through the tough times and we live to love another day....together.

Refocusing Life & Getting it Right

 I'm less than 3 hours back from vacation and, as usually happens when I visit northwestern Wisconsin, I relax and refocus my brain. I make more resolutions in 4 days than I've done all year. I think about what I truly value in life, what I want to be doing (personally and professionally), and what I can do in the short-term to get me to the long-term goals I want to achieve. I've always loved to write, so one resolution was to restart my blog.

That said, I vow to get my facts right. I'm reminded of the importance of getting facts right when a teenager overheard a news story and said, "Wow! The Brewers are in trouble! Rickie Weeks is going to prison for 3 years!" I was initially perplexed, then I realized the source of the confusion. He'd overheard a story of Bradley Manning, the Army intelligence officer who leaked hundreds of thousands of pages of military secrets to Wikileaks. The teenager HEARD "leaks" (rhymes with "Weeks") and "prison", then mentally combined the two. I corrected the issue to the teenager (who'd already repeated it to other teenagers, all of whom denied that there's such thing as "Wikileaks"), but this reminded me of the importance of getting the facts right the first time, not just repeating the first rumor I hear without getting confirmation. We're all guilty of not getting confirmation of time to time, to the detriment of us all. We're all in such a rush to be right that few take the time to confirm the accuracy of the "facts" we repeat.

There are other resolutions I'll mention in future blog posts, and I want to continue to create achievable resolutions for myself. Some are to make the world a little bit better, but most are simply because I see a problem and I'm sick of doing nothing about it. If I do nothing, who will?

"If you want to make the world a better place, take a look at yourself and make the change". (Michael Jackson)

American History, Pt 2: The Articles of Confederation

  The Articles of Confederation is probably the most-forgotten about document of American History. I admit that I had to research several places before remembering & understanding what it said as well as the intentions behind it.
  Think back in time. The colonists, a small and relatively unorganized group of rebels, had just fought and defeated the most powerful army in the world. Today this would be like what the Afghani people did to the Soviets, then to the Americans--they never gave in. But I digress.
  The colonists won their independence, so what's next? The Articles of Confederation were the blueprint for what was to come. Almost. The colonists had an idea of what they wanted, but didn't consider some of the ramifications of what they might say. The document took effect March 1, 1781.
  The Articles setup a framework of government and two branches which still exist (legislative and judicial) and named the country which it represented, but it's weaknesses were many. For example, in Article IV, it refers to 'friendship between the states'. Friendship? In politics? These colonists had clearly never thought of a political action committee.
  However, the biggest single weakness was that of the federal government. There was no national army, no federal court system, amendments to the Articles required a unanimous vote (families can't even get a unanimous vote; how could 13 states do anything without opposition?) , Congress had no power to tax...in summary, the federal government could do very little. This may sound fine in theory, but when there's a problem in one state, other states are unable to help. Also, each state had only one vote in Congress (regardless of size) and laws required a 9/13 majority to pass. This was truly a supermajority situation, in which the minority (as few as 5 of the states) could keep any law from passing.
  This was replaced by the US Constitution on March 4, 1789. I'll discuss the Bill of Rights in the next post and will conclude discussions of all the amendments before the presidential election.

American History, Pt 1: Declaration of Independence

The election for president is under 2 months away. We all know that. Thus, I'm devoting the blogs between now and then to the Declaration of Independence and the Constitution. Today I'm devoting to the Declaration of Independence.

First, I'll address some common misconceptions. "God" is never explicitly mentioned, although "Nature's God" is (once). We're left to decide on our own who "Nature's God" is--the founding fathers didn't want to decide that. (In all fairness, "Creator" is also mentioned once.) The point is that there is no specific religion mentioned as "official"--the founding fathers, thankfully, didn't make that mistake. When I see how well an official religion hasn't worked in other countries, I'm happy we don't have one.

The most famous phrase in it states "We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness". This is the core phrase of the entire document; after stating this, the founders list their grievances (long and varied) against the king. So, bit by bit, and briefly:

"All men are created equal..." This is possibly the most hypocritical thing ever said. As many before me have said, a group of white men, half of whom owned slaves as property, stated that all men are created equal. Women couldn't vote for until the 20th century, so did they not have the same rights as men?

The document states that "among these rights..." That said, this implies that this is by no means an exclusive, end-all, be-all list. The founders were starting with the basic inalienable rights and seemed to imply that there are rights other than those specified.

The next major phrase is my favorite, and it states that among the rights of "all men" are "Life, Liberty and the pursuit of Happiness". "Life"--when does life begin? Conception? Birth? (I'd note that there's no tax deduction for unborn babies, so I think we have our answer already. Also, what if a woman is pregnant 12/31 but doesn't know until after taxes are filed? Refile?) Then, again, if all men have the right to life, no government can execute them--yet our government did in Colonial times and does so now. Have we strayed from this? Are convicted felons no longer "men"?

"Liberty"--liberty is, I'd argue, where we as a society place the most emphasis. The Nazis marched in Skokie in the 70s, based on their right to free speech. Citizens United v FCC decided that corporations are people--therefore, I'd argue, they're also "men". Our Constitution (which I'll get to in future blogs, 5-10 amendments at a time) guarantees many other freedoms, such as religion, press, and right to peaceful assembly. Could we be more free? Unequivocally, yes. It's up to us to remove restrictions placed in the way of our liberties by our government. (How's that war on drugs going? War on poverty? War on hunger? War on anything that doesn't have a face & name?)

"the Pursuit of Happiness"--I'd argue that this is the most misread phrase. Reread it. It doesn't say "Happiness", it says "Pursuit of Happiness". All men are entitled to the pursuit of happiness, but--much like a road trip--the journey is yours.

Finally, and as a reminder of how bad things were, the founders devoted twenty-nine paragraphs (1-3 sentences each) addressing the grievances with the King of England. I'd challenge any American to get to ten complaints of the same magnitude that the Colonists had.