Congress has the power to prohibit states from giving special incentives to specific businesses.

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/

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Pay gap between men and women does not need further regulation or legislation.

According to an article in the Des Moines Register, The American Association of University Women (AAUW) issued their annual report on the “pay gap” between women and men.  According to the report, women in Iowa earn about $10,000 less per year than men. This article, and the related report, are excellent examples of misuse of meaningless statistics.  (See link below.)   Comparing the median pay for all women with the median pay for all men tells us nothing about whether or not sex discrimination is taking place. A valid analysis would compare the pay of women and men who do the same work for the same employer.  The report by the AAUW did not do that.
This report tells us more about the bias of the AAUW than it does about bias in the workplace.  As you reported, Kim Churches, chief executive officer of AAUW, said, “It’s unacceptable. There is no gender differentiation when it comes to quality, skills, and talent.  It’s time to close this gap and give every woman in Iowa and across the country the salaries they deserve.”  She advocated for more regulation.
Based on the facts given in the article, and assuming that women and men can and do perform equally, then it is fair to presume that the AAUW would agree that if any woman wants to earn the same pay as a man, then they should go for the same jobs that men go for.   When the relevant qualifications, working conditions, and job duties are accounted for, the difference in pay between women and men reduces dramatically.  The pay gap has been reducing for years.  Our current laws are working.  We don’t need to add more regulations.

Link to AAUW report: https://www.aauw.org/aauw_check/pdf_download/show_pdf.php?file=The_Simple_Truth

Average pay for men and women working for State of Iowa need not be the same.

In Des Moines Register’s recent article about the pay gap between men and women working for the State of Iowa, the headlines and introductory paragraphs seemed to imply that there is something wrong about the fact that men working for the State get paid, on average, about $5,300 more than women.  (See link below.)  The proper question that needs to be asked and answered is: Are men and women with substantially the same job and qualifications paid differently or treated differently?
The full article was fairly balanced.  Toward the end of the fairly lengthy article the Register reported: “A 2006 study at the University of Iowa found that almost all faculty pay variations were the result of known factors that were expected to affect salary, including the discipline taught, seniority, tenure status and faculty rank.”  “When those factors were taken into account, ‘there were no overall statistically significant gender- or minority-status based salary differences,’ Jeneane Beck, a University of Iowa spokeswoman, said.”  Also further down in the article the Register quoted Iowa State University economist, Dave Swensen, saying, “It remains that large fractions of administrative support employment are female, which do earn substantially less than management, technical and other professional occupations,”
So, although there may or may not be some isolated problems, overall there appears to be no overall problem with the pay difference that was reported.

Some of the rich are getting poorer, and some of the poor are getting richer.

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/

 

We are over-licensed. We do need to reduce licensing requirements in Iowa.

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.

 

 

Register link:  http://www.desmoinesregister.com/story/opinion/readers/2017/03/19/professional-licensure-protects-public/99176434/

How to lower the cost of college.

The cost of a four year degree, even at our public universities, has gone up much even faster than medical care.  For many college graduates, their post-graduate pay does not justify the amount of student debt that they accumulated.
Similar to community colleges, our public four-year universities should offer certificate programs that focus on specific skills, take less time, and cost less.  The certificate should indicate that the student has specific specific skills that employers demand, without the extra classes, time and cost of a broad, liberal four year degree.  If desired, students could live on campus and gain some of the non-classroom experience and relationships  that colleges offer.  This could go a long way towards lowering the cost of college while providing a college education.

Export-Import Bank should go.

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: