The Des Moines Register recently published an editorial that showed how out-of control Iowa and other states are in giving incentives to businesses to locate in their state. To help reverse this situation, Congress should exercise its Constitutional power to “…regulate commerce… among the several states…” and should limit states’ ability to bribe companies to locate in their state. States should be prohibited from giving custom incentives to specific businesses to locate in their state. They should only be allowed to use schemes that provide uniform incentives to all companies that locate their business or otherwise create new jobs in that state.
Link to Register editorial: https://www.desmoinesregister.com/story/opinion/editorials/2018/11/20/amazon-apple-corporate-iowa-workers-education-environment-bribing-business-workforce-jobs-money-tax/2061418002/
Link to AAUW report: https://www.aauw.org/aauw_check/pdf_download/show_pdf.php?file=The_Simple_Truth
The Des Moines Sunday Register published a lead article (Page 1) titled, “The rich keep getting richer”. (See link below.) Included were a number of misleading statistics or misleading conclusions based on the statistics. For example, according the think tank, Iowa Policy Project, the median hourly wage in 2016 was $16.04 per hour. 37 years ago, the average wage, adjusted for inflation, which is fair, was $15.91. The Register concluded, “This means a typical wage earner working 40 hours per week for a full year would have seen a real increase of $270.40 over a 37 year span.” While the statistics are technically true, you cannot logically conclude and that any specific person or group of people did not move themselves from a lower wage to a significantly higher wage. I’m sure it is true some people moved down while some people moved up. An interesting study would be to see how wages correlate to the number of years in the employment market. It would be interesting to know the median starting hourly rate for a young inexperienced worker versus and an experienced worker who has been in the labor market to 30 years. The fact that the average stays about the same my be a problem, but almost no one stays at the average wage for 37 years.
Another statistic was that the number of people who earned $1 million or more during specific years increased from 5,031 in 2010 to 8,325 in 2015. Their “slice” of the state’s total adjusted gross income grew 37%. Meanwhile, the number of Iowans claiming gross incomes of $40,000 to $99,999 climbed by 23% while their slice of the state’s total adjusted gross income fell 2%. First, I would venture to guess that a significant majority of the $1 million+ earners are people who sold their businesses or had other one-time income. So, again,there is no logical reason to presume that the $1 million+ club is made up of the same people year-after-year. At the same time, from 2010 to 2015 the Iowa economy was generally continuing to improve, so values and prices of businesses likely climbed. Also, in the case of an “expanding pie”, the fact that any group gets a smaller percentage of the total does not mean that their real income is not increasing.
Finally, the Register reported that their analysis of U.S. Census data showed that the bottom fifth of earners saw practically no growth in household income – going from $13,798 in 2006 to $13,848 in 2016, again adjusted for inflation. Here again, there is no logical reason to believe that the specific group of people who were in the bottom 20% in 2006 are the same people who were in the bottom 20% 10 years later. It would be interesting to know what percent of the people in the bottom 20% in 2006 were still in the bottom 20% 10 years later. My guess is there would be some, but not a majority.
As a society we need to make sure we don’t put hurdles in front of people who are trying to improve their lot in life. In many cases this means removing government created regulatory barriers to entry into certain jobs. The Register has done very good work exposing job licensing regulations that are in place more to protect existing businesses from competition and to protect the profits of licensing education businesses, than to protect the public. Yet, the Iowa Legislature has done precious little to address this real problem for low income workers who are trying to work their way up in our economy.
Link to Register article: https://www.desmoinesregister.com/story/money/business/2017/11/25/most-iowa-wages-have-stagnated-but-rich-keep-getting-richer/818770001/
Contrary to the opinion of almost every person who already has a government required license to work, many of the licenses required by the State of Iowa are not only unnecessary, their primary purpose seems to be to protect existing licensees against competition, rather than to protect the public.
I am sure that certain state licensing requirements do help to ensure the safety and quality of the service provided, but in almost all cases, private certification programs could serve the same purpose without involving the use of force by government, and without giving government backed protection to existing licensees. A great example of this is Certified Financial Planners (CFPs). Financial professionals who want to hold themselves to a higher standard can get this private certification, and then advertise that fact. The same is true of Realtors.
I’m sure that many licensed professionals also have various college degrees, private certifications, and other professional credentials. In many cases, these private credentials should be sufficient. Those who have them should advertise the fact, and not ask government to prohibit others from competing against them.
In the Register today, 1/30/2015, Daryl Bouwkamp, with the Vermeer Corp., advocated that the Export-Import Bank (Ex-Im Bank) be reauthorized by Congress to help exporters, such as Vermeer Corp. He wrote, “Vermeer currently serves customers in more than 60 nations – some of whom could we could not reach without financing support from the Ex-Im Bank.” I don’t understand why couldn’t Vermeer provide the financing or the guarantees needed? Are there no banks that would loan money to Vermeer or its customers if Vermeer guaranteed that the loans will be paid back? If not, why should taxpayers be on the hook?
This is a chance for Republicans to show whether or not they really mean what they say when they talk about ending crony capitalism. It appears that the exporters and bankers that use the Ex-Im Bank have become dependent on the taxpayer guarantees. We need to get back to true free market capitalism, where both the risks as well as the rewards are are kept in the private sector. If Republicans allow the Ex-Im Bank to be reauthorized, it will send a clear signal that crony capitalism is alive and well in America.
Link to article:
Des Moines and surrounding communities should welcome Uber, the internet based company that coordinates ride sharing as an alternative to taxis and limousines. Uber is now available in the Des Moines area for both drivers (car owners) and for riders. Uber takes advantage of the fact that most privately owned cars are very under used, and that many car owners have available time to provide a ride to those who need one. What a great way to earn extra income, or to start your own business full time. Uber does extensive background checks on people who want to provide rides in order to ensure a high level of safety. Beyond that, Uber actively solicits riders to rate drivers on a scale from 1 to 5 with 5 being excellent. It has been reported that Uber stops working with drivers who’s average rating falls below 4.6. So, Uber strives for high quality. (Uber drivers also rate passengers, so it is possible that Uber can also stop serving customers who are abusive.) Although Uber will be very upsetting to existing taxi companies, the City of Des Moines and surrounding communities should make whatever legal and regulatory changes are needed to allow Uber to operate in the metro area. If Uber is not doing enough to provide for reasonable customer safety, then laws and regulations should address those issues. Licensing should not be necessary. Generating tax revenues or protection of existing businesses should be considered in the process of making any needed changes.