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1 month ago

The cost of employees

Most Americans have to work for a living. We must trade for the goods and services we want to consume, and for most of us, we trade our labor. Conflict over two legal work classifications, employees and independent contractors, illustrate how government’s rules can imperil economic prosperity.

People must work for a living, but people who want a job done, must secure assistance voluntarily through compensation. Difficult, physically demanding, boring, and dangerous tasks will require extra compensation.

Regulation heavily burdens business. According to a U.S. Small Business Administration study, federal regulations cost small businesses over $10,000 per employee. The National Small Business Association found that small businesses face $83,000 in regulatory costs during their first year of operation when owners struggle just to survive. Around 30 percent of a business’ labor cost is for benefits and paperwork.

How much do government rules affect hiring? Rules affecting employees include the minimum wage, overtime pay, workplace safety rules, collective bargaining and the National Labor Relations Act, the Americans with Disabilities Act, the Civil Rights Act, immigration eligibility, worker’s compensation and unemployment compensation. Many regulatory rules do not apply to independent contractors. Furthermore, requirements imposed on larger businesses are generally based on employees, not contractors.

Consumers must eventually pay for a business’ costs of complying with state and federal laws and rules. And costs tied specifically to employment reduce hiring to do tasks which create value in our economy. Half of small businesses report having held off hiring due to regulation.

Why do politicians impose so many rules on employment? In part, because mandates cost the government little; politicians do not spend tax dollars to boost wages or pay insurance premiums. The complexity of employment relations also matters, helping sustain an illusion of significant benefits to workers.

Businesses care about the full cost of an employee, meaning the wage or salary plus the cost of benefits, training, required paperwork, and so forth. When government mandates better terms for employees on one item, businesses can trim back others to contain the cost. For instance, less on-the-job training or flexibility in scheduling can offset the cost of a higher minimum wage.

The adjustments can cancel out mandated benefits. A college student might consider an $8 per hour job with the flexibility to adjust work hours around exams equal to a $10/hour with no flexibility. Raising the minimum wage to $10/hour may lead employers to eliminate flexibility, leaving the college student no better off.

Such offsets of government policies often go unnoticed. Supporters celebrate a hike in the minimum wage, or mandatory overtime pay, or required health insurance. Adjustments like a loss of scheduling flexibility may never get linked back to the policy. The mandate appears like a better deal than in reality.

As rules increased the cost of employment, businesses have not surprisingly tried reclassifying employees as independent contractors. The IRS and state governments enforce rules regarding these classifications, but some employers clearly try to bend the law. Efforts by state and federal regulators to protect traditional employment, however, also frustrate Americans seeking new self-employment options.

Work flexibility will be crucial to realize the full potential of the sharing economy. Exploiting opportunities for sharing will require many people to perform small tasks. Scooter rental companies like Spin and Lime, for instance, need people to charge their electric vehicles left on city sidewalks. Power and gardening tools sit in garages most of the time and could be widely shared. Getting tools to paying users and back to their owners will require on-demand delivery service. Each rental is unlikely to generate enough surplus value to cover employees’ costly regulations.

A market economy enables voluntary action in pursuit of our goals. The labor market forces people to pay for tasks they want performed. Burdensome government rules should not prevent willing parties from agreeing to deals to get work done.

Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University.

17 mins ago

Sessions makes first speech since resigning as attorney general, still supports Trump’s agenda

MONTGOMERY — Speaking at the Montgomery Area Chamber of Commerce’s 146th annual meeting on Tuesday, former Attorney General Jeff Sessions delivered his first public remarks since leaving President Donald Trump’s administration.

Despite his forced resignation and having been on the raw end of several Trump tweets and public comments this year, Sessions graciously made clear that he still supports the work the president is doing, praising the administration’s successes and some ongoing agenda items in a roughly 20-minute speech. He did not directly address speculation that he could run to return to the United States Senate in 2020.

He did, however, add some levity to the situation, with the crowd of approximately 600 enjoying a few trademark Sessions jokes.

“I’ve had a few ups and downs in the last two years,” Sessions remarked while thanking Bishop Lawson and Cheryl Bryan, who were in attendance. “And every now and then, it’s good to know your bishop is praying for you.”

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A couple of minutes later, Sessions spoke on some federal issues of note.

“On the Make America Great Again front, I will cite these words from Friday’s Wall Street Journal: Wage growth matched the highest rate in nearly a decade and unemployment held at its lowest rate in nearly half a century at 3.7 percent. This is the lowest rate since 1969,” Sessions outlined.

He continued, referring to his wife sitting some yards away from him, “That’s when Mary and I married – 1969.”

Sessions then spoke about the benefits of getting people working again across the nation, while saying that the workforce participation rate still needs improvement.

“So, personally, I’m attempting to chill out a bit,” Sessions said, transitioning away from speaking on the economy.

“You can be sure that I don’t follow the tweets as closely as I used to,” he added to great laughter and a smattering of applause.

Sessions added, “Having served in the Department of Justice for almost 15 years plus 20 on the [Senate] Judiciary Committee, I well knew that AG’s frequently face difficult choices and decisions which, almost inevitably, create some controversy. But this very public adventure, I gotta say, exceeded my expectations.”

The former attorney general and United States senator then continued to emphasize that he remains supportive of Trump and their shared agenda.

“I’m proud of President Trump’s policy agenda and to have had a part in it,” Sessions said. “He is driven to succeed and much of his frustration arises from his inability to move the bureaucracy to achieve what he believes oughta be achieved fast enough.”

Perhaps quoting Kanye West for the first time, Sessions commented, “[Trump] has dragon energy. Think that’s a good description of it, really.”

He then talked about his “love” for the Department of Justice, outlining the successes of his tenure in a similar manner to his speech in Hoover this fall.

“I poured my heart into our work and was pleased to be able to advance the president’s policies, which were my policies and good for America,” Sessions explained.

After listing some of the many accomplishments of his time as attorney general for several minutes, Sessions said that the DOJ’s recent work was just one way that “the rule of law” was being affirmed.

“First, and of monumental importance, the president continues to nominate the best group of highly qualified federal judges ever, in my opinion,” Sessions advised. “These judges understand that they adjudicate under the constitution – they’re not above it. And they know they are to be neutral umpires.”

In a timely manner with Tuesday’s announcement that Ben Shapiro will speak at the University of Alabama during the spring, Sessions also touched on his support of free speech on campuses.

“We’ve defended free speech on campus. Goodness gracious, [it’s] hard to believe the attacks on speech on campus,” Sessions said.

After getting into the weeds a little on more ways the DOJ defended the constitution under his watch, Sessions concluded his remarks.

“[W]e have the greatest legal system in the history of the world,” Sessions outlined. “This government, and especially the attorney general, must give his best effort every day to uphold and defend this heritage we have been so blessed to receive.”

“To that end, as God has given me the ability, I have been dedicated. I am satisfied our work has met the highest standards. Thank you for your friendship, your understanding, your support and for allowing me to represent the great people of this fabulous state. I love it. And of the United States. Thank you all and may God bless America and God bless this great state,” he concluded.

Sean Ross is a staff writer for Yellowhammer News. You can follow him on Twitter @sean_yhn

50 mins ago

Ledbetter: Around a ’75 percent’ chance higher gas tax passes

The gas tax may be a foregone conclusion if you listen to the leadership of the Alabama legislature.

Infrastructure needs are undoubtedly a priority heading into the next legislative session; how they get addressed is the battle we will see fought out.

A gas tax of up to 12 cents a gallon has been discussed, but according to Alabama House Majority Leader Nathaniel Ledbetter, the target for a tax increase in Alabama is more likely to be in the six to 10 cent range, which could raise between $180 million and $300 million dollars a year.

While appearing Tuesday on WVNN’s “The Dale Jackson Show,” Ledbetter was optimistic about the chances of the tax passing legislation.

Without any particular promises made, he referred to the need for a “clean bill” that he believes makes the passage easier.

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In spite of that desire, there are pressing needs in every part of the state and constituents will want their needs addressed, but he agreed that every caveat carved out weakens the bill and makes it less likely to pass.

In the interview, Ledbetter signaled a strategy that will be unveiled to convince Alabama voters that a gas tax increase isn’t that bad and surrounding states have higher taxes so we should increase ours as well, arguing it would be a “reasonable” tax.

Ledbetter stated, “You know Georgia did 26 on gas, 29 on diesel with a five dollar lodging fee.”

“We’re not gonna do that,” he added.

Ledbetter then continued to point out Alabama’s higher tax neighbors, “Tennessee put 10 cents on, Louisiana put 18 cents on. I think we’re going to be more reasonable with what we do and we need to do it for the right reasons.”

A strategy for the gas tax is being unveiled before our eyes: using county commissioners to lobby legislators for a higher gas tax and compare Alabama’s taxes to our neighbors.

Will it work? Ledbetter said there is around a 75 percent chance it will.

Listen:

@TheDaleJackson is a contributing writer to Yellowhammer News and hosts a talk show from 7-11 am weekdays on WVNN

3 hours ago

Alabaster Mayor Marty Handlon: A municipal perspective on Alabama’s infrastructure

Alabamians use municipal infrastructure throughout the state to access jobs, schools, grocery stores, hospitals, parks, entertainment venues and church services – making infrastructure a significant and urgent quality of life issue.

The state’s infrastructure needs are at a critical point, especially relative to their impact on our cities.

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Alabaster, a medium-sized municipality, is struggling to provide the road infrastructure to adequately move a population of approximately 34,000 (and growing) in and around our city, as well as accommodate the traffic associated with our economic footprint of over 100,000. Alabaster is not alone in this struggle. Infrastructure challenges will continue to escalate through the trickle-down effect as metro/urban areas understandably remain in the posture of revitalization and attracting additional growth in the surrounding suburb communities. Like many suburbs, Alabaster is appealing to families for the quality of life provided through excellent public safety, great schools, plenty of parks with children’s programs and safe roads to travel.

Motor Fuel Tax Increase – Why this is imperative

The Legislature is considering adopting an additional motor fuel tax to address the rapidly escalating statewide demands of infrastructure maintenance and enhancement. Therefore, it is important for the citizens of Alabaster and our surrounding communities to be knowledgeable about road funding and how it is distributed so they can boldly and confidently express to legislators the need for adequate and equitable funding for all local governments.

Alabama’s demographics have shifted significantly in the last 50 years. Across the state, greater than 4 percent now live in cities or towns. In Shelby County, 148,641 of the total 213,605 population – almost 70 percent of citizens – live in cities and towns, according to the statistical data for 2017. As the largest city in Shelby County, Alabaster encompasses 25.46 square miles, almost 10 percent of the County’s incorporated land area, which includes a combination of state, county and city roadways.

The city currently faces more need in minimum maintenance projects on city streets than the current gas tax allocation supports. For educational purposes, the current annual gasoline tax allocation of approximately $260,000 provides for the resurfacing of three to five residential neighborhood streets each year, depending on distance and the degree of repair necessary. However, when the base of the roadway is severely impaired due to earth movement or sink-hole conditions, repairs must be completed in phases pending availability of funds.

Our city has experienced this multi-phase type project with Alabaster Blvd – approximately one mile of city street repairs (not resurface) with a low bid of more than $600,000 in 2014 to complete all at one time. The total cost of the project increases dramatically when done in phases, due to mobilization and other economic factors. This multi-year project, in progress for the last four years, is still not complete. We are consistently addressing roads in priority order as it relates to safety – and we’re more often reactive instead of preventative.

The major arteries for traffic to move through and around our city belong to either the state or county. In order to address a major congestion issue, the city has to become a willing partner contributing funds in a collaborative effort towards improvements. One example is the widening of State Highway 119, which moves traffic from one end of our city to another into the city of Montevallo. In 2013, Alabaster was awarded a Federal grant of up to $10 million for approximately two miles of roadway widening, with the city participating in a 20 percent match to the 80 percent of federal dollars. Currently, no state funds are allocated to this project. The project was put on hold earlier this year because the estimated cost of $20+ million exceeded the grant funding and ALDOT had no available resources to assist in the completion of the project. After two months of conversations with representatives of the Federal Highway
Administration, we were granted permission to break the project into two phases and move forward utilizing our existing grant funds.

Many times, collaboration between government agencies allows for projects a local government cannot afford to do on its own. However, as it relates to roads, excessive time and additional requirements, as well as other inefficiencies, are the downsides when collaborating with the Federal Highway Administration and the State due to so many other ongoing projects. It is not quite as bad when a municipality partners with a local county government, but the efficiency inhibitors are still present.

Alabama counties and municipalities, as well as the taxpayers statewide, benefit from savings in eliminating red tape and inefficiencies. Future economic and community development projects in the Shelby/Jefferson County areas will be defined by the infrastructure it can offer. The same is true with every region of the state.

Current Motor Fuel Tax Distribution Is Inadequate

The current motor fuel tax distribution formula, which provides 50 percent of funds to the State and 50 percent to local governments with counties receiving 80 percent and municipalities receiving 20 percent, was developed in the 1960s and is no longer equitable to citizens living in municipal jurisdictions to address the growing demands on our municipal infrastructure. Therefore, municipal officials are advocating that the Legislature adopt a 21st Century distribution formula that would provide 50 percent of the funds to the State, 25 percent to counties and 25 percent to municipalities.

Alabaster’s community actively engaged with its legislative delegation on this critical issue as they experienced the dangerous bottleneck contributing to more accidents and lengthy delays on the Shelby County portion of Interstate 65, and even more so after the delay in widening Highway 119 where emergency vehicles can’t get to the scene of an accident due to the congestion. Our delegation listened.

The voices of voters make the difference!

We are proud of the state’s history of fiscally conscientious leaders making Alabama a great and affordable place to live. No one is to blame for the rising cost of goods and services over periods of time; it just costs more to maintain the same in every industry, including government. That being said, Alabama is not the same as it once was – we have grown and developed, shifting from rural areas to bustling suburbs.

I can’t stress enough how important it is for our legislators hear from their constituents about the public safety issues and escalating need in their communities. It would be wonderful if the voice of local government and public safety professionals were enough; however, it is always going to take the voices of the voters to make the difference between crumbling congested roads and safe highways.

State and local leaders cannot afford to sacrifice the public’s safety and quality of life by adhering to inadequate funding formulas of the past. As we have implored people and businesses to invest in our communities and our state for the benefit of our citizens, we owe them the return on their investment of providing the infrastructure needed for safe success in their mobility.

Please contact your legislators and let them know that infrastructure is a priority issue for you as a citizen and for us as a state!

Marty Handlon is a Certified Public Accountant with a Master’s in Business Administration and more than 20 years’ experience in accounting and financial management. She was elected Mayor of Alabaster in October 2012.

4 hours ago

Ben Shapiro to speak at the University of Alabama in the spring

Ben Shapiro, a prominent national conservative commentator and writer, will speak at the University of Alabama during the 2019 spring semester.

In an announcement Tuesday, Young America’s Foundation (YAF) said Shapiro will speak on campus in Tuscaloosa as part of the organization’s Fred Allen Lecture Series. UA will be one of six campuses to host the hot ticket speaker during the spring, on a date yet to be announced.

YAF celebrated a “wildly successful” fall lineup of campuses, adding it was “excited” to unveil the select locations hosting “the #1 requested speaker in the country” this coming spring.

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Formerly an editor-at-large for Breitbart, Shapiro currently serves as the editor-in-chief of The Daily Wire, which he founded in 2015. He has spoken frequently on college campuses across the country in recent years, meeting with controversy along the way, including especially prominent occasions at the University of California at Berkeley and California State University in Los Angeles.

He also hosts his online political podcast, “The Ben Shapiro Show,” which is broadcast every weekday. At age 34, Shapiro’s podcast is downloaded over 1 million times per episode, with an audience that is reportedly 70 percent under the age of 40. The Daily Wire gets approximately 140 million page views per month.

Sean Ross is a staff writer for Yellowhammer News. You can follow him on Twitter @sean_yhn

Alexander Shunnarah gives back to the community with the first annual ‘Shunnarah Seasons of Giving’ initiative

Most people know Alexander Shunnarah for his infamous “Call me Alabama” slogan and the massive trail of billboards commonly spotted by travelers along I-65. However, what many aren’t aware of is Shunnarrah’s heart for giving back to the city he calls home.

To show his love and appreciation for Birmingham, the Alabama lawyer just launched the first ever “Shunnarah’s Seasons of Giving” initiative and is surprising locals in the community with various acts of service throughout the month of December.

Shunnurah described this initiative as a, “…small part in giving back to the community and paying it forward.”

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To begin the month-long program, Shunnarrah stopped by Etheridge Brother and Sister Barber and Beauty Shop in downtown Birmingham last week where he gave locals an opportunity to receive a complimentary haircut.

“It’s been a great initial kickoff in the seasons of giving,” Shunarrah said.

In addition to these pop-up visits, Shunnarah’s law firm is partnering with The Shoe Clinic LLC for the clinic’s third annual ‘Saving One Sole at a Time” Sneaker, Sock and Coat Drive. The drive will take place at The Shoe Clinic LLC on Saturday, December 15th from 12:00 – 4:00 p.m.

Donations are accepted now through December 15th. Both organizations hope to collect 500 sneakers and coats, and 1000 pairs of socks by December 15th.

To donate to the sneaker, sock and coat drive, visit one of the two drop-off locations listed here:

The Shoe Clinic
1801 11th Ave S. Birmingham, AL,

Alexander Shunnarah Law Firm
2900 1st Ave. S. Birmingham, AL.

To see where Alexander Shunurrah visits for the next “Shunnarah’s Seasons of Giving” pop-up, visit his Instagram page at @alexander_shunnarah.