In the News: Blog

The economy is technically recovering from the recession, but Mort Zuckerman pointed out in the Wall Street Journal why it doesn’t feel like much of a recovery: It’s because so much of America is working part-time.

“Full-time jobs last month plunged by 523,000, according to the Bureau of Labor Statistics. What has increased are part-time jobs. They soared by about 800,000 to more than 28 million. Just think of all those Americans working part time, no doubt glad to have the work but also contending with lower pay, diminished benefits and little job security.

“On July 2 President Obama boasted that the jobs report ‘showed the sixth straight month of job growth’ in the private economy. ‘Make no mistake,’ he said. ‘We are headed in the right direction.’ What he failed to mention is that only 47.7% of adults in the U.S. are working full time. Yes, the percentage of unemployed has fallen, but that's worth barely a Bronx cheer. It reflects the bleak fact that 2.4 million Americans have become discouraged and dropped out of the workforce. You might as well say that the unemployment rate would be zero if everyone quit looking for work.

“Last month involuntary part-timers swelled to 7.5 million, compared with 4.4 million in 2007. Way too many adults now depend on the low-wage, part-time jobs that teenagers would normally fill. Federal Reserve Chair Janet Yellen had it right in March when she said: ‘The existence of such a large pool of partly unemployed workers is a sign that labor conditions are worse than indicated by the unemployment rate.’”

Obama jobs tour

President Obama appears at West Wilkes High School in Millers Creek, N.C., on Oct. 17, 2011, during one of his many attempts to appear as if he were doing something about jobs. White House photo by Pete Souza.

The signs of weakness are plenty. Teenagers, for instance, are seeing the worst summer-job hiring in several years. This is the result of economic growth less than half of what is normal. But, Zuckerman points out, there are specific policies that contribute to the trend toward Part-Time America:

“Many employers cut workers' hours to avoid the Affordable Care Act's mandate to provide health insurance to anyone working 30 hours a week or more. The unintended consequence of President Obama's ‘signature legislation’? Fewer full-time workers. In many cases two people are working the same number of hours that one had previously worked.”

The president and his Democrat supporters say they meant well in passing Obamacare. Maybe so, but what matters aren’t their intentions but the results, intended and unintended. Washington owes it to America to examine the results of programs and to try evaluating whether new programs might have similar results.

Obamacare raised the cost of employing people full-time. The president proposes making employers pay wages for low-skill jobs far above what markets say the jobs are worth, an idea that the non-partisan Congressional Budget Office says will cost as many as a million people a job. Already, we’re seeing some employers experimenting with how to hire fewer employees.

McDonald’s, for instance, is trying a system that lets customers order ahead by cell phone:

“The phone will then display the customer’s order number and once their items are ready the customer picks up the items without waiting in a line or interacting with a cashier.”

This is convenient for customers, but it also means fewer jobs manning a cash register.

The Wisconsin-based mattress retailer Penny Mustard, meanwhile, says it is toying with the idea of stores that have no employees, only mattresses and a chance to order online. Maybe this is the future, maybe not. It may mean fewer jobs or maybe just different kinds of jobs. The point is that employers do not hold still. They react in sometimes unforeseen ways to the business environment, including to the changing costs of employing people. When government adds to the cost of employment, it isn’t just employers who pay, but people who are left trying to find a job.

When we think about what to do about the flood of unaccompanied children pouring illegally across our southern border, we have to look for the root cause, and we have to do that compassionately. As others and I have said, that means making it clear to parents in Central America that there will no longer be any payoff for subjecting their children to a dangerous, unconscionable journey in the hands of criminal human traffickers. We need to send the children home as soon as possible.

What’s surprising is that anyone finds this argument surprising. But a CNN host seemed taken aback when comedian Paul Rodriguez, himself an immigrant, made the case. Here's how Rodriguez put it:

“My heart goes out to the parents that have to traumatize their kids to go through Mexico. They must go through terrible abuse. But at the same time, if we accept these children and we don't repatriate them, it's only going to send out a clear signal to everyone in Latin America that, if you get to America, you will stay here.”

Imagine how many children will be riding atop a freight train then, Rodriguez said. He pointed out, correctly, that we already take in many immigrants legally. He said, correctly, that we must treat the children who already have arrived humanely. But he also gets the key question:

“But if we -- if we accept -- let's say we accept these children, we let them stay here in America, we give them good homes, what is this going to say to everybody else? Are we prepared to be overwhelmed? Because that's exactly what's going to happen.”

The Senate voted Wednesday on a pointless political exercise – whether to proceed on a bill based on the premise that the Hobby Lobby decision by the Supreme Court erodes the right to use contraceptives.

The premise is wrong. That’s not just my view – even left-leaning newspapers such as the Washington Post have been ripping apart the claim.

ayotteBut two of my Senate colleagues, Kelly Ayotte (right, above) of New Hampshire and Deb Fischer  (right, below) of Nebraska, lay out the facts in the Wall Street Journal far better than I can:

“The biggest distortion: the #NotMyBossBusiness campaign on Twitter, which falsely suggests that under the ruling employers can deny their employees acces

“That's flat-out false. Nothing in the Hobby Lobby ruling stops a woman from getting or filling a prescription for any form of contraception. … No employee is prohibited from purchasing any Food and Drug Administration approved drug or device, and contraception remains readily available and accessible for all women nationwide.”

fischer

Senators Ayotte and Fischer point out that even before Obamacare, more than 85% of large businesses already paid for contraceptives for employees. The federal government already has five programs, they write, to help poor women buy them. Access is not the issue.

Whether the government should be forcing anyone to buy something for someone else that violates her religious tenets is the issue. As Ayotte and Fischer put it:

“While some Americans may disagree with the Green family's views, nearly all Americans believe that religious freedom is a fundamental right that must not be abridged. When President Clinton signed the Religious Freedom Restoration Act, he said: ‘Our laws and institutions should not impede or hinder, but rather should protect and preserve fundamental religious liberties.’

“Congressional Democrats used to share that view. What's changed?”

mcallen detention

Above: A Customs and Border Patrol agent distributes juice to illegal immigrants at a McAllen, Texas, Border Patrol station. CBP photo by Hector Silva.

I said the other day that true compassion to the unaccompanied children wading our southern border means figuring out how to keep still more children from being sent on that terrible journey.

I’m not the only one saying that, either. Charles Krauthammer puts it well:

“Stopping this wave is not complicated. A serious president would go to Congress tomorrow proposing a change in the law, simply mandating that Central American kids get the same treatment as Mexican kids, i.e., be subject to immediate repatriation.

“Then do so under the most humane conditions. Buses with every amenity. Kids accompanied by nurses and social workers and interpreters and everything they need on board. But going home.

“One thing is certain. When the first convoys begin rolling from town to town across Central America, the influx will stop.

“When he began taking heat for his laxness and indecisiveness, Obama said he would seek statutory authority for eliminating the Central American loophole. Yet when he presented his $3.7 billion emergency package on Tuesday, it included no such proposal.

“Without that, tens of thousands of kids will stay. Tens of thousands more will come.”

There are those who say the children will come anyhow because of violence and poverty. “Nonsense,” writes Krauthammer. “When has there not been violence and poverty in Central America?” What is new is “Obama’s unilateral (and lawless) June 2012 order essentially legalizing hundreds of thousands of illegal immigrants who came here as children.”

And passing “comprehensive” reform isn’t the solution: “Indeed,” he writes, “any reform that amnesties 11 million illegal immigrants simply reinforces the message that if you come here illegally, eventually you will be allowed to stay.”

Still others say it would be mean to send children home to poor countries after all they’ve been through. Krauthammer writes, “By that standard, with a sea of endemic suffering on every continent, we should have no immigration laws. Deny entry to no needy person.

“But we do. We must. We choose. And immediate deportation is exactly what happens to illegal immigrants, children or otherwise, from Mexico and Canada. By what moral logic should there be a Central American exception?”

To the contrary, there is good reason to send them home. Tens of thousands of families are now contemplating sending their children into the hands of criminal human-smuggling gangs. It is inhumane for us not to do all we can to deter them.

As I pointed out Wednesday when the Senate Homeland Security committee discussed the sudden new wave of illegal immigrant children, the right question is, “How do we stop the flow?”

America is a compassionate country. Naturally, we all want to treat the tens of thousands of children wading the Rio Grande humanely.

But true compassion means we have to think as well about millions more children in Central America whose parents are thinking right now about sending them on a terrible, dangerous trip. We need to prevent their parents from sending them. We must make it obvious that children who enter our country illegally will not get to stay.

We should do that by sending illegal immigrant children home immediately.

Families are subjecting their children on a incomprehensibly dangerous trip. Children as young as 5 are riding the roof of a freight train nicknamed “The Beast,” risking crippling injury or death. As the Los Angeles Times reported:

“The trip can take weeks or months; some get off the train along the way to beg or work, and those with children stop to rest and maybe pick up donated diapers or food before hopping another train.

“They ride on the roof, holding on for dear life, the luckier ones wedging themselves between jostling cars. Almost every one of them has had to pay bribes, either to Mexican police, immigration officials or gangs.

“In a twist, along some segments of the route, the notorious Zetas drug and extortion paramilitary force has been replaced by members of the equally ruthless Mara Salvatrucha gang, originally from Los Angeles and El Salvador, migrants said. They charge the migrants $100 at each stop, Honduran Jose Eduardo Calix said.

“ ‘If you don't pay, they try to throw you off the train,’ Calix, 30, said, adding that he had seen five people shot to death because they didn't have the money.”

Why would a family do this? It’s not just the endemic poverty and crime at home but the pull of the destination: No parent would send a child on a trip posing a risk of rape or death at the hands of criminal gangs unless she knew the child had a good chance at a great prize — being allowed to stay in a generous United States.

When the president stops deporting illegal immigrants and asks Congress for $3.7 billion in emergency spending to care for the wave of children who have already arrived, it tells desperate parents that the dangerous trip may well pay off. It tells Central American families that paying smugglers thousands of dollars and putting their children’s lives in danger is worth it.

If we have any decency, we must prevent that terrible decision.

There is no more humane thing we can do than telling parents that it’s pointless to subject their children to that horrifying journey. That means sending children home immediately.

There are millions of people in this world desperate for their children to get to America by any means. Few in America believe we should have totally open borders or would deny that because we are a nation of immigrants, our country is stronger and more vibrant. What we need is a functioning legal immigration system, and I will continue to work to achieve that important goal.

But first we need to address the root cause of this sad wave of children. That means having the compassion to see not only the children who have arrived but the ones who have yet to leave home.

Things may be getting better soon for people left without a job: The extended-benefits program for the unemployed expired nationwide Jan. 1 and hasn’t been reinstated. How can this help? Because the evidence from North Carolina shows the kind of improvement in hiring that apparently comes after ending extended benefits.

John Hood lays out the numbers in the Wall Street Journal. North Carolina dropped out of the extended-benefits program early, on July 1, 2013. The state, he writes, “didn't descend into the Dickensian nightmare critics predicted."

"For the last six months of 2013, it was the only state where jobless recipients weren't eligible for extended benefits. Yet during that period North Carolina had one of the nation's largest improvements in labor-market performance and overall economic growth.

“According to the U.S. Bureau of Labor Statistics, the number of payroll jobs in North Carolina rose by 1.5% in the second half of 2013, compared with a 0.8% rise for the nation as a whole. Total unemployment in the state dropped by 17%, compared with the national average drop of 12%. The state's official unemployment rate fell to 6.9% in December 2013 from 8.3% in June, while the nationwide rate fell by eight-tenths of a point to 6.7%.”

The Affordable Care Act is about to become much less so, writes Stephen Parente, a professor of health finance at the University of Minnesota, in the Milwaukee Journal Sentinel. Wisconsin is about to get hit hard.

This isn’t because of the problems with Obamacare’s rollout. The problem lies in the way Obamacare is designed, Parente writes:

“In two years, the ACA's structural problems will lead to substantial premium increases. Once that happens, Wisconsinites likely will leave the insurance market in droves. They'll have little choice — they won't be able to afford health insurance because federal subsidies won't keep up with the rapid price increases. Within a decade, this could swell the ranks of the uninsured by nearly 11%.”

It isn’t just Wisconsin. Parente wrote about this last month in the Wall Street Journal, based on research he released this spring. Parente’s findings – using a peer-reviewed, government-funded economic model – show the number of people covered by employer insurance falling 9% over the next 10 years, those on individual plans falling 3%, while Medicaid enrollment shoots up 20% and the number of uninsured rises 11% nationally. As in Wisconsin, things begin going bad in 2017:

“Two big changes will occur that year: Insurance companies will no longer have access to ACA's ‘re-insurance’ and ‘risk corridor’ programs. The first item currently allows insurers to bill the government for the most expensive patients; the second one guarantees that the industry's losses will be subsidized by you. When these two programs end, the insurance industry won't have access to taxpayer money.

“That leaves Wisconsinites to pick up the tab. Without taxpayer money, insurers in the state will increase plan premiums to cover the sudden shortfall. They'll have no other choice — the other option is to go out of business.

“You might not have a choice, either. The data predicts that the average 2017 premiums for a bronze family plan may jump from $8,800 to $12,800 — an increase of 46%. Undoubtedly, this will be far too expensive for many people. No insurance may be the only financially sound option.

“This will cause a chain reaction in the insurance market. As people leave the exchanges, insurers will have fewer customers who can shoulder health care costs. Thus, for 2018, they'll have to raise prices again — which will only cause more people to leave. This cycle could repeat itself indefinitely.

“Employer health care coverage won't stem the losses. After 2016, many businesses will stop offering health insurance because it's also getting too expensive for them. I estimate that over 14 million people could lose employer coverage over the next decade.”

So more and more people will be forced to turn to the Obamacare “exchanges.” But they will find those growing more costly by the year, leading more people to simply pay the fine for going without insurance. The result?

The “Affordable Care Act” designers, Parente writes, “promised that it would make health care cheaper while providing universal health care. Instead, it will make health care unaffordable for many while leaving more Wisconsinites uninsured.”

We already know that this program with its Orwellian name has made people give up the idea of being insured, has increased, rather than decreased, the use of costly emergency rooms for routine care, has done less than predicted to help the uninsured, is narrowing people’s health care choices, and is making cancer patients lose access to life-saving drugs.

With a record like that in its so-far short life, it shouldn’t be surprising that it will lead to the opposite of what its backers promised.

For months, President Obama and Majority Leader Reid have insisted that raising the minimum wage is the way to give hard-working Americans a raise. Unlike the president or members of Congress who have never run a business, I actually have given workers raises. It’s a pleasure to reward an employee’s hard work. But it isn’t something that happens by whim or the stroke of a pen. A worker’s wage relies on many factors, many of them things that presidents and lawmakers cannot foresee or predict.

For example, there are the wages offered by the Walmart in Williston, N.D. Economist Mark J. Perry wrote at AEI.org about the wages on offer there: $17.40 an hour for cashiers, or $19.90 an hour for lube shop staff.

Walmart is offering 2.5 times more than the federal minimum wage. How can this happen?

North Dakota happens to sit atop the Bakken Shale oil field. The Bakken field now produces over 1 million barrels of oil a day. As recently as six years ago, the Bakken produced less than 200,000 barrels per day. Its population has ballooned while its unemployment has fallen to 0.9%. With Bakken’s help, the United States now produces 8.43 million barrels per day, the highest level in 27 years.

That incredible growth occurred mostly on private land through risk-taking, entrepreneurial activity. In addition to lower energy prices, job growth in related sectors has been incredibly strong. Richard Rahn writes in the Washington Times:

“Unconventional oil and gas producers, including suppliers of equipment and materials, and energy-related chemical production already support about 2.5 million new jobs, which is equal to about 1.8 percent of the work force. By 2025, an estimated additional 3.9 million jobs will have been created. On average, these new jobs pay more than jobs in other industries.”

The president visited North Dakota last week, giving a speech about 300 miles away from Williston. It’s a shame he didn’t visit and observe how to legitimately raise wages the honest and sustainable way, through economic growth.

If you think Obamacare is a mess now, wait until 2017, writes health care scholar Stephen Parente in the Wall Street Journal.

Parente, at the University of Minnesota, writes that the structural problems in the grotesquely misnamed “Affordable Care Act” will take years to reveal themselves fully. “Consumers who saw spikes in their health premiums last year will experience the same trauma this year,” he writes. “But the steepest price increases will not occur until 2017 and after, when three things happen.

“First will be the Affordable Care Act's ‘essential benefits’ requirements. All plans—including those currently exempted for hardship and old plans extended for various reasons—must provide all of the law's mandated benefits from Jan. 1, 2017. On average roughly 15% of plans offered in 2013 will not qualify for sale on the insurance exchanges once all extensions are completed. Depending on the state, as many as 60% of the plans sold in 2013 would not be permitted for sale.

“The law's ‘reinsurance’ program will also expire in 2017. Health insurers will no longer be able to bill the government for 80% of a patient's health-care costs when they make more than $45,000 in annual claims. The multibillion-dollar risk corridors for insurance companies will also sunset in 2017—ending the taxpayer bailouts that kick in when insurance companies providing ACA plans lose money. Insurance companies will have neither option by 2017, leaving consumers to pick up the tab through premium payments. Federal subsidies will be unable to keep up with such dramatic rate spikes.

“Confronted with this cost crisis, consumers will react the only way they know how: by looking for cheaper options such as the remaining high-deductible health plans offered by private companies and the exchanges as well as plans with very limited physician and hospital networks geared to achieve maximum efficiency for the average patient. These plans are likely to provide no or limited access to specialized facilities and physicians. Rising premiums will create a cyclical exodus from insurance plans, with each wave of departures fueling premium spikes that cause even more departures.”

Employers, he writes, will face increasing economic pressure to drop their plans, leaving employees with a choice between a dysfunctional Medicaid program if they’re poor enough or the same Obamacare exchanges that other people will be fleeing. “By 2024,” he writes, he and a colleague “estimate that there will be more than 40 million uninsured, roughly 10% more than today. So perishes the Affordable Care Act's promise to deliver universal health care—its fatal conceit.”

The Obama administration assumes that having health care coverage is the same thing as getting health care. This is absurd. But what is striking is that, even by the administration’s own gauge, their plan is headed for failure.

As Obamacare is revealed to be a bigger failure than anyone predicted, we can’t expect that liberals who believe that increasing the size and scope of government is always the solution will just give up. Instead, expect them to tout Canada’s government-run system as a solution.

Jason Clemens and Bacchus Barua of the Fraser Institute, a Canadian think tank that has long documented that country’s health care performance, offer a warning. Not only do the data show that Canada’s single-payer system is among the most expensive in the world, it doesn’t offer value to match:

“The reality of Canadian health care is that it is comparatively expensive and imposes enormous costs on Canadians in the form of waiting for services, and limited access to physicians and medical technology.”