Tag: Unemployment

Ocasio-Cortez Needlessly Opposed the State of the Union

Michael Ottavio | United States

Tuesday night, President Donald Trump gave his 2019 State of the Union address.  With the country’s partisan divide growing larger every day, there was no question Trump needed to bring Americans together over issues that we all agree that we should address. And boy, oh boy, did Trump deliver for not only himself but for his party.

There will always be some in the opposition that abstain from clapping during the mention of more right-wing policies. However, Alexandria Ocasio-Cortez is getting attention this morning for appearing unhappy with achievements that should make any freedom-loving American happy.

During the State of the Union

Pictures of a stoned-face Ocasio-Cortez started surfacing during the SOTU address. She seemed to be unmoved by a speech that has earned a 76% approval rating. Ratings like that show that even many Democrats approved of the president’s State of the Union.

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With such high approval ratings, it is clear Trump did something right last night. But apparently, Ocasio-Cortez did not think so. She appeared on Rachel Maddow shortly after with a friend claiming that “it was clear he did not do his homework,” insinuating that President Trump did not prepare for the State of the Union address. This claim is a little bizarre, seeing how Trump both had an extra two weeks to prepare thanks to Democrats blocking his speech and read a scripted speech. Let’s be honest, Donald Trump did not write that himself nor did he just prepare notes last-minute.

This was a very calculated and planned out speech to boost his approval ratings, and it looks like it will do that. Trump needed a boost in the eyes of independent voters and to narrow the partisan divide. It appears he accomplished both last night.

Strange Reactions from Ocasio-Cortez

Since Ocasio-Cortez is Trump’s opposition, it is no surprise she would refrain from applauding at times. However, particular things she did not cheer for were shocking to many. During his speech, Trump made multiple comments about how unemployment is at an all-time low and that the economy is thriving. These remarks which got a rise out of both Democrats and Republicans, but not Ocasio-Cortez.

The most shocking moment for Alexandra Ocasio-Cortez came when she sat there stone-faced when Trump announced border patrols tackling the human trafficking problem at the border. This issue disproportionately affects women over men. One would think that a president making it a priority to combat human trafficking would be worth celebrating. But sadly, she sat there with the same discontent face she had on most of the night. Ocasio-Cortez continued to stay visually discontent throughout the speech, making no affirmative reactions during talks of programs that will help minorities and criminal justice reform, both issues that should be bipartisan.

Alexandria Ocasio-Cortez did stand up and clap once. This occurred when Trump mentioned how there are more women in Congress than ever before. While this is something to celebrate, it’s funny how Ocasio-Cortez only celebrates herself. Though it’s obvious she was out to make a statement, she appeared to not care about how the country is actually doing. She didn’t care about helping to repair the divide; her only concerns were for herself and her message while the president she calls divisive gave one of his most unifying speeches ever.


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The Government Shutdown: Rough Seas for Investors

Nickolas Roberson | United States

“NOTICE: Due to a lapse in federal funding this website is not being updated.” That’s the large, menacingly red statement that one reads as they access portions of the websites for the United States Census Bureau (USCB) or Bureau of Economic Analysis (BEA). Investors, entrepreneurs, and economists all rely on government data to make market decisions. Yet with the government shutdown, this data is unavailable.

Continue reading “The Government Shutdown: Rough Seas for Investors”

Minimum Wage Raises Are Causing Price Hikes – Just As Expected

By Mason Mohon | @mohonofficial

For us it’s very simple. There’s no big pot of money out there to get the money out of.

That was the statement of Mike Wiggins, owner of Granny Schaffer’s restaurant in Joplin, Missouri. He is being forced to raise the prices of food items up to 20 cents for one reason: the minimum wage increase.

He estimates that he may have to pay an additional $12,000 in annual wages to his staff, which is only to the harm of consumers, due to the direct effect that it has on the prices of goods.

But this incident is not isolated to Missouri. New minimum wage requirements are going into effect in 20 states, ranging from a nickel per hour increase in Alaska to an increase in $1 hourly in states such as Maine, California, and Massachusettes. In Seattle, large employers are going to have to pay $16/hour at the minimum. Similarly, in New York City, it has gone up to $15/hour.

As a Yahoo! Finance report indicated:

Economic studies on minimum wage increases have shown that some workers do benefit, while others might see their work hours reduced. Businesses may place a higher value on experienced workers, making it more challenging for entry-level employees to find jobs.

Studies from the University of Washington showed that when Seattle raised its minimum wage to $11’hour, then further to $13/hour, there was a 6.9% reduction in hours for those working for less than $19/hour, leading to a net decline in hours and ultimately leaving the workers worse off.

And all of these results are expected. Free-market economists have been explaining this for years. Ultimately, the worker’s effort for a certain amount of time is a good being sold from the worker to the employer. Like any good, there is a standard supply and demand graph that it can be analyzed against. And in this model, a minimum wage acts as a basic price floor.

The graph for each quality of work is different, with the equilibrium point (the wage agreed upon by the worker and employer) residing at a different position based on the worker’s skill. If the employer determines that the worker’s labor is worth something around $20/hour, this price floor will have no effect. But when this exact same price floor is enacted where the equilibrium wage is at $6/hour, this worker will be guaranteed unemployment.

Economists understand that a price floor leads to a surplus of unsold goods. In this case, it leads to a surplus of low-skilled workers who cannot sell their skill because the government mandated that they cannot reach a voluntary agreement with their employer.

As Yahoo! Finance continued:

The new state minimum wage laws could affect about 5.3 million workers who are currently earning less than the new standards, according to the liberal-leaning Economic Policy Institute, based in Washington, D.C. That equates to almost 8 percent of the workforce in those 20 states but doesn’t account for additional minimum wage increases in some cities.

So we have unemployment, or we have what we saw in the case of Granny Schaffer’s. The prices go up and consumers have to pay more. And in this instance, we have the exact same issue with a price floor above equilibrium. There is always a tendency towards equilibrium in any business endeavor as F.A. Hayek shows us, so businesses are always cutting it quite close (unless there is a large change in the quantity demanded or supplied and there is a lag in the adjustment). Because of this, when the price is forced up because the employer does not want to lay off their workers, there will once again be a surplus of unsold goods. This is bad for the business, and consumers are not getting the goods they desire.

All around, raising the minimum wage is a bad bet. So why are we still pushing for it anyway?

The sole reason is the empty platitudes of liberal talking heads and the likes of Sam Seder. When faced with economic analysis, they simply ask “but how is it moral for the employers to not pay a ‘living wage'” (whatever that means). It is a failure to see the bigger picture and look past the immediate effects of a government program. Bastiat warned us that the unseen exists, but because it is unseen, it is hard for many to take into account. One may pity those ignorant of their own economic misgivings, but when you realize that their faults are affecting the economy as a whole, compassion quickly goes out the window.


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The City of Chicago Will Now Tax ‘Amusement’

othman Mekhloufi | United States

 

The Amusement Tax

The City of Chicago is now levying taxes on amusement, entertainment, or anything remotely fun-oriented.

The City of Chicago’s Department of Finance, rather than the City Council, issued a new tax ruling called an “amusement tax”. This tax would subjugate any residence within the official city limits of Chicago to pay a 9% tax, in addition to sales tax, on anything which is remotely related to amusement; whether it be streaming movies on Netflix, playing video games, or going to a football game, such a tax would apply.

Here is the following list of all the assortments to be taxed according to the ruling itself.

“Any exhibition, performance, presentation or show for entertainment purposes, including, but not limited to, theatrical, dramatic, musical or spectacular performance, promotional show, motion picture show, flower, poultry or animal show, animal act, circus, rodeo, athletic contest, sport, game or similar exhibition such as boxing, wrestling, skating, dancing, swimming, racing, or riding on animals or vehicles, baseball, basketball, softball, football, tennis, golf, hockey, track and field games, bowling or billiard or pool games; any entertainment or recreational activity offered for public participation are on a membership or other basis including, but not limited to, carnivals, amusement park rides and games, bowling, billiards and pool games, dancing, tennis, racquetball, swimming, weightlifting, bodybuilding or similar activities; or (3) any paid television programming, whether transmitted by wire, cable, fiber optics, laser, microwave, radio, satellite or similar means.”

With this ruling, there are also some exceptions. All venues held in auditoriums or theaters with a maximum capacity of not more than 1500 people are exempt from the 9% amusement tax. However, these venues must be in person live performances to be exempt from the tax. This exemption does not apply to movies or sporting events.

Currently, Chicago’s sales tax, with all jurisdictions considered, is the highest in the entire nation at 10.25%. With this amusement tax being set at 9%, it is also compiled onto Chicago’s default sales tax of 10.25%; meaning that the population of Chicago is not only stuck paying an astronomically high 10.25% sales tax, but they are also required to pay an additional 9% tax on any assortments in relation to the amusements previously listed.

The Impact on the Wallet

The economic repercussions of such a new tax would be quite negative for the City of Chicago. Said economic repercussions would revolve around the primary negative effect of margin loss. The government is now levying more taxes from the people via two separate sales taxes, one at 10.25%, and one at 9%. Because of this, less money will be the pocket of the populace. When the populace has less money in their pockets, they will have less money to spend. Because the populace will have less money to spend, businesses will lose out on customers, as well as profit. When it occurs that businesses lose out on customers, and income, one primary negative effect on the economy would take place; that being, margin loss.

This margin loss will always have two sets of negative economic sub-repercussions. The first set of sub-repercussions are unemployment, cutting of wages, as well as the cutting of work hours which fits into the internal-labor subsection. The second set of sub-repercussions are and the hiking of prices which fits into the consumer subsection. Meaning, that with such a tax, prices would in fact increase, and jobs, work hours, as well as wages,  would all be cut.

The Impact on Employment

Let’s take a look at the first set of sub-repercussions; unemployment, the cutting of wages, and the cutting of work hours. Due to the fact that businesses will be losing margin due to fewer customers, they will always want to mediate that margin loss. To mediate this margin loss, businesses have two choices; either begin to raise their prices, or cut spending somewhere within the company. Usually, when spending is being cut, it is centered around wages and not other essentials of the company. This is due to the fact that if companies were to cut spending for such essentials, the product, and or service being provided would degrade in terms of quality. In turn, this would only result in furthermore margin loss due to the general premise that no consumer populace wants to purchase an inferior product with poor quality.

With this, we can determine that a margin loss, for whatever reason it may be, will indeed result in a spending cut. Said spending cut will be focused on wages. More specifically, when implementing this, hours will be cut, some individuals within the company may be laid off, and many wages will be reduced all to minimize for the loss in margin caused by economic government intervention.

Don’t Forget About Prices

Considering the second set of sub-repercussions, the hiking of prices, this also comes with its own extended economic repercussions. Other than the fact that cheaper goods mean best for everyone on both sides of the transaction, the hiking of prices comes with its own furthermore economic disparities. When prices are hiked to mediate a loss in margin, an even higher amount of margin loss will occur. This is due to the following reasons; when a company raises its prices for whatever reason it may be, and in our case, margin loss, the populace will be less incentivized to purchase said product, and or service.

Because of this, sales will go down even more, and the company suffers even more margin losses. For instance, a 2014 study conducted by YouGov found that nearly 1 in 5 of Netflix subscribers polled would cancel their subscription if the price went up by $1 a month. Nearly half of those polled would cancel their subscription if the price went up by $2 a month. If these increases in subscription prices would happen due to a loss in margin, Netflix would experience even more margin loss as it loses even more customers due to price hikes.

As we can now see that not only do price hikes burden the consumer populace as everyone enjoys cheap goods, but they also cause margin loss in companies which, if it were to be on such a large scale, would cause unemployment, cuts in wages, as well as cuts in work hours as previously explained.

Many may claim that the amusement tax rate may only be 9%, and at such a small rate, it would not cause any actual negative economic repercussions as previously mentioned. However, this amusement tax is estimated to levy $189 million in the year 2018. Not only this, but the amusement tax’s levy margin has been trending upwards since 2017 when it took in a measly $168.7 million compared to the $189 million of 2018. With the amusement tax raking in hundreds of millions of dollars a year, and with it only trending upwards, we can truly determine that such a large amount of money being taken out of the economy will indeed cause the economic hardships previously mentioned.

Although these economic repercussions have not been extremely severe in Chicago due to the fact that the amusement tax is only centered within one jurisdiction; if the western world continues this trend of large government economics, and a similar policy begins to be implemented on the federal level, the economic repercussions previously listed would scale to a very large extent affected millions across the board.

In reality, with such a tax, we would only cause economic hardships; unemployment, cuts in wages and work hours, as well as hikes in prices across the jurisdiction in which it was applied.


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The Case for Right-wing Unity

By Jack Parkos | United States

The liberty movement is struggling – it has not fought off tyranny or shrunk the size and scope of the government. The movement needs allies, but the question is, with who? Contrary to popular belief, allying with other right-wingers may just be the best chance it has.

The Libertarian Party is run by watered down libertarians who often only care about a few issues, such as marijuana. Even at the idea of right-wing unity they will scoff and start throwing out words like “statist” and “conservative sympathizer”. This mentality has only hurt us. Libertarians are a small minority; we need allies. Allies that can agree with certain values we have but may have certain differences. Just because someone may have one minor issue that may not be 100% libertarian doesn’t mean we should call him a statist and kick him out. So when we look at groups of political ideology we need to ask who is the better ally. The answer is the right wing.

Politics, Not Party

Again here we see most libertarians saying that the left and right are exactly the same and both are equally as bad. This belief comes from the 2 party system, people believing that establishment Republicans represent all right wingers and establishment Democrats embody the left. Politics is more than just Party affiliation.

Populism

Populists and libertarians have more in common than you may think-both are angry with the establishment, are tired of politicians selling out to corporations and global organizations. Neither side wants to be ruled by the elite. The movements may disagree on some issues, but differences must be put aside if we want anything to get done.  Of course, certain groups in the populist movement may be a no-go, such as ethno-nationalists. However, ones who respect certain values- such as property rights, capitalism, and non-intervention, would be a good ally in the fight to defeat the elites. Murray Rothbard was a supporter of this idea but unfortunately did extend it to white supremacists. If we can vet these people out, the populist movement would be a great ally to the liberty movement.

The Left’s Threat To Social Order

People may think that the left is not a threat, or is just as big of one as other right-wingers, but this is a false assumption. Of course, not all right-wingers are perfect, but left-wing ideologies pose a greater threat to liberty. Groups like Antifa use violence to suppress free speech, all in the name of “political correctness”. Other groups who fight for “social justice” actually harm society. The further left you get, the more you get into Marxism. Even what we may consider “moderate left-wingers” are starting to turn to socialism.

A further issue with the left is they tend to crave chaos in the name of “equality”. Right-wing ideologies tend to favor social order. Libertarians favor order mainly through property rights, while right-wingers want order mainly through law. The libertarians goal should be to ally with groups who want social order and convince them of how property rights (and a possible minimal state) can maintain the order without using government violence. It is easier to convince people of a new way of keeping social order rather than convincing people that there should be none.

A Moral Society?

Right-wing ideologies tend to favor a more moral society, namely with family values and traditionalism. In a libertarian society, these would be essential to the survival of the libertarian social order. Obviously, we do not need to use government force to establish and maintain a moral society.

In such a society, people would have the freedom to make bad decisions, such as drug usage, free sexuality, etc. These behaviors can lead to high unemployment. Increased sex out of marriage will lead to fatherless children which will increase poverty and higher crime rates. Social conservatives tend to believe in family values, which could help decrease poverty. The compromise would be to encourage these values while simultaneously decreasing government. While it may not be ideal to some, the necessity for maintaining social order and defeating the left is enough for right-wing unity.


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