David R. Henderson  

Weekend Wall Street Journal

Friday Night Video: David Frie... Why Don't Wages Fall During a ...

I rarely do a potpourri of various links but the editorial page of the Wall Street Journal this weekend had 5 good op/eds: the Weekend Interview, the two unsigned "Review and Outlook," and two pieces by non-WSJ authors.

1. Weekend Interview. Stephen Moore interviews Bob Funk, president and founder of Express Employment Services, the 5th-largest employment agency in America.

Some highlights:

Why is the health-care law good for Express but bad for the country? "Firms are just very reluctant to hire full-time workers," Mr. Funk says. "So they are taking on more temporary help, which is what we do." ObamaCare imposes new mandates and penalties on companies with more than 50 full-time employees--and even those working 30 hours a week are considered full-time.

He quickly adds: "The problem isn't just ObamaCare, though. It's the entire regulatory assault on employers coming out of Washington--everything from the EEOC"--the Equal Employment Opportunity Commission hits companies hard when employees claim age, race or sex discrimination--"to the Dodd-Frank monstrosity. Employers are living in a state of fear."

To land and keep a job isn't hard, he says, but you have to meet three conditions: "First you need integrity; second, a strong work ethic; and, third, you have to be able to pass a drug test." If an applicant can meet those minimal qualifications, he says, "I guarantee I can find employers tomorrow who will hire you."

He thinks the notion of the "dead-end job" is poisonous because it shuts down all sense of possibility and ambition. One of his lifelong themes, Mr. Funk says, is that "a job--any job--is by far the best social program in America and the ladder to success."

2. Jim Gray, "Our City Did Pension Reform and Lived to Tell the Tale." The mayor of Lexington, Kentucky tells how the city of Lexington cut by 45% its unfunded liability for government worker pensions.

3. Daniel Fletcher, "Why Your iPhone Upgrade is Good for the Poor."


Seven years ago, when one-megapixel cameras started appearing on phones, I began working with a group of students in my lab at the University of California at Berkeley to see if those cameras could capture images of human cells similar to those captured on our $150,000 research microscope.

By attaching a simple set of lenses to a Nokia phone borrowed from my sister, we were able to image blood cells, malaria parasites and the bacteria that cause tuberculosis.

Several years and prototypes later, we and collaborators are testing a mobile-phone-based device in Cameroon to screen for parasitic worm infections. We're also testing a modified mobile phone in Thailand to image the back of the eye for retinal diseases, and another in India to provide early warning of oral cancer. Other researchers have created a cellphone stethoscope and a portable ultrasound system. The list goes on.

4. "Carve-outs for Congress." An editorial by the WSJ editors on how Congressional Republicans are giving up an opportunity to "put their own privileges in play."
On Friday the House passed a bill cancelling spending for the Affordable Care Act, but the GOP needs a realistic replacement short of a government shutdown once Senate Democrats restore the money. One option is the illegal ObamaCare exemption for Members and their staff. This dispensation is the only ObamaCare abuse that Republicans won't criticize. Is that because it was perpetrated on their behalf?

The Affordable Care Act requires the 11,000 people who work on Capitol Hill to purchase their health insurance on its exchanges, but many of them earn too much to qualify for subsidies. That's a financial hit worth about $5,000 for individuals and $11,000 for families. So in early August President Obama's personnel team came to the rescue with a let-the-good-times-roll regulation that entitles Members and aides to their current premium contributions, on the basis of zero legal authority.

Liberals consider the income thresholds for ObamaCare subsidies to be important tools for their social engineering. Shielding the elites from those thresholds creates one set of rules for them and another for the rest of America. Among the many extralegal ObamaCare waivers and exemptions, carve-outs for well-connected, well-off Washingtonians are among the worst.

5. "Won't Work for Food." An editorial by the WSJ editors making the case for reforming the food stamp program.

Some highlights:

You'd expect the rolls to expand during a recession, but note that they are still climbing even in the fifth year of an economic recovery. Never has the program exploded like this. One reason is that the Obama Administration has actively sought to turn food stamps into another middle-class entitlement.

One of President Obama's first actions was to suspend the 20 hour-a-week work requirement for able-bodied adults as part of the 2009 stimulus. His budget requests in 2011, 2012 and 2013 called for the continued suspension of work requirements. Thanks to federal waivers, work rules remain effectively void in 45 states.

Mr. Obama also eliminated a long-standing three-month limit for employable adults to receive food stamps. Now benefits can last for three years or more. Congressional Research Service and USDA data show that the number of employable adults on food stamps without children expanded by 164% from 2007 to 2011 and only one in five of these recipients is working. College students are collecting food stamps in record numbers.

Mr. Obama also made food stamps more popular by giving recipients a cost-of-living adjustment that raised the value of food stamps by more than 10%. Families can now receive up to $10,000 in food stamps a year. Keep in mind this is only one of more than 50 federal welfare programs.

The bill that House Republicans passed Thursday evening would try to reverse these dependency trends. It would reinstate work requirements for employable adults without children and allow states to begin experimenting with work requirements for able-bodied recipients. It would eliminate the roughly $40 million a year that the government spends to convince Americans to enroll in the program. (bold added)

Comments and Sharing

COMMENTS (5 to date)
ThomasH writes:

Putting 1 and 4 together, a win-win for everyone would be that Republicans agree to abolish the debit ceiling/government shutdown in return for a permanent postponement of the employer mandate. It would increase the fiscal costs but by shifting (many?) more people into the exchanges, their bargaining power with providers will increase, leading to lower total costs.

ThomasH writes:

No. 5 deserves a separate comment. Why do I see more wailing about food stamps (and minimum wages) on libertarian blogs than about farm crop supports or a zillion other departures from non-interference with the market? Probably neither can be justified in strict Libertarian theory, but aren't farm supports much more a distortion of the market than food stamps?

David R. Henderson writes:

Why do I see more wailing about food stamps (and minimum wages) on libertarian blogs than about farm crop supports or a zillion other departures from non-interference with the market?
Re farm crop supports, I'm not sure you do. But I would have to know what blogs you read, and I don't know that. I will say that in The Concise Encyclopedia of Economics, which I edited, there is an article on Agricultural Subsidies and no article on food stamps. That reflects my view, which appears similar to yours, that the distortions from such programs substantially exceed the distortions from food stamps.
Re minimum wage, speaking for myself, it reflects the fact that I care particularly about unskilled youth and I think it's tragic that the minimum wage prices them out of the labor market.

David R. Henderson writes:

P.S. On his blog, Marginal Revolution, Tyler Cowen, who, I think, still thinks of himself as a libertarian, gives a lukewarm defense of food stamps.

Mark V Anderson writes:

I am very skeptical of Mr Funk's comment (#1) that he can find employers tomorrow for those with integrity, good work ethic, and can pass the drug test. I don't have the problem of employability now, but back in the '70's when I first came of age I definitely could not find a job many times, even though I had a good work ethic and integrity.

Of course they didn't have those stupid drug tests back then, and I likely would have flunked them, because the tests pick up a trace of pot if you smoked in the last several weeks. But I'm sure I would have complied with that if I needed to for a job.

In any case, I find it unlikely that things have changed so much that any hard working person can now get a job. Especially since I was a White kid from an upper middle class background, and it has always been much harder for Blacks and those with little education. Has Mr Funk actually placed inner city kids from Chicago?

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