Category "Economy"

The most recent economic numbers just came in from the Labor Department, and on paper it looks pretty good. The jobless rate just fell below under 4% for the first time since 2000; we’ve now had 91 months straight of job growth (thanks Obama). But the problem isn’t about the number of jobs out there: it’s about the ability to make ends meet.

Fifty years ago, the minimum wage was just over $10 per hour in today’s dollars. While it was still difficult to raise a family on that salary (a full time employee would make the equivalent of $21,000 a year), it was 19% more than today’s minimum wage in Florida of $8.25 per hour (where a full-time employee makes $17,160 a year). At that rate, a single parent with one child is under the poverty rate and qualifies for food stamps.

You Didn’t Build That

It seems like eons ago, but Obama got a lot of flak for telling business owners, “You didn’t build that.” But, to be honest, there’s a lot of truth to it.

As an entrepreneur, I can say with certainty that it’s a lot less romantic than it’s portrayed to be. The business I co-own with my wife is going on its 7 year anniversary in business, and we’re very fortunate to have made it this far. But the only reason we made it this far is that we have fantastic clients.

It’s no stretch to say that our clients built our business. If they didn’t trust us and didn’t come on board, we wouldn’t be here, period.

And without our clients, we wouldn’t have been able to build our team – a team that has done an amazing job taking care of our current clients, giving us more time to focus on sales and adding more clients to our roster. It’s no stretch to say that our team built our business too.

And that’s why paying a living wage is absolutely vital. If your team is worrying about survival, if they’re worrying about unpaid bills or something their children need that they can’t afford, then they aren’t worrying about your clients…which means your business will unravel quickly.

My job as a business owner is to make sure my team is taken care of, so that they can help take care of our business.

The Economic Argument For Raising the Minimum Wage

In effect, keeping the minimum wage so low just means that the government is subsidizing companies that pay their employees peanuts.

If we raised the minimum wage to $15 an hour, a full-time employee is making just over $32,000 a year. Not enough to be living like kings, but enough that the government shouldn’t need to be subsidizing them so that they can survive.

The added bonus: this jump will provide an economic boom. The best way to stimulate the economy is to get the poorest among us more money. The moment they do, they spend it on something they need that they’ve been going without.

Going back to who builds businesses: raising the minimum wage will create more customers for every business. It’s simple trickle-up economics.

The Republican Argument

I receive a great deal of pushback for fighting for a $15 an hour minimum wage. The GOP says it will cause inflation to spike, and companies like Taco Bell will lay off all of their staff because they won’t be able to afford them at $15 an hour.

The inflation spike is a red herring: the Federal Reserve has been trying to get inflation to spike for a decade to no avail precisely because those of us at the bottom of the economic ladder don’t have enough to make ends meet. Since the Reagan era, we’ve been focusing on the supply-side of the economy — but there’s also a demand side. By overemphasizing the supply over the demand, we have a skewed economy.

The potential massive layoffs at Taco Bell is also falsely claimed as we can see by looking at the income statement of Yum Brands (the company that owns Taco Bell). Even if raising wages to $15/hr raised their total operating expenses by 67% (it would be less because minimum wage salaries aren’t their only operating expense), it would only reduce their net income by 8%.

The bottom line is that businesses can afford it.

Let’s Bring Change to Tallahassee

Let’s get the job done. I’d love your support in the Democratic Primary on August 28th; help me get to Tallahassee so that we can stop subsidizing businesses that don’t want to pay their employees a living wage, give a boost to our economy and help grow our businesses.

 

They say there are two certainties in life: death and taxes. A lot of Miamians add being stuck in traffic to the list.

Odds are you were stuck in a standstill this morning and will be there again this afternoon. Miami traffic is hot mess and it feels like there is nothing that can be done to improve your commute.

Well, that’s actually not true.

Miami-Dade County has promised an expansion of the Metrorail for ages. Their latest iteration looks fantastic: adding six lines across the County, with 60% of Miami-Dade living within 2 miles of a station. Even if you never plan to use it, every new transit rider is one more driver off the road. And it will also reduce our carbon emissions, helping in the fight against climate change.

The problem: how are we going to pay for it?

While Miami-Dade has flubbed this before, they do have a new plan to create a tax district to pay for part of this mass transit plan.

And while Transit-Oriented Development is a must, we need legislators to advocate for the State to pay its share. The Florida Department of Transportation has proposed a $10.8 billion budget for this fiscal year. That adds up to about $524 per Floridian.

Based on our population, that means we should be getting $1.41 billion a year in funding. But the State is only planning to spend $700 million a year in Miami for the next five years. Put simply: they’re only giving us back half of what we deserve.  If we got our share, it would pay for the projected budget for the Metrorail expansion entirely in five years.

We need to elect representatives that won’t be pushed over and will fight for Miami to stop getting shortchanged.

I would head to Tallahassee with a focus on expanding the Metrorail lines and supporting the SMART plan to bring rail across the county. This will help catch Miami up to the 21st century where larger cities are more reliant on public transportation – thus boosting the economy, lowering traffic issues, bringing forth new jobs and creating a stronger sense of community.

Sounds like a real win/win/win. Right?

If you’d like to spend less time in the car and more time at home or out with family and friends –we’d love your support to make this a reality. The Democratic Primary is on August 28th, and if you have any questions, please feel free to reach out.

It’s not news to declare that Unions are under attack – they have been a main target of the GOP for decades.

The biggest problem is that the GOP is winning that battle. What is even more problematic is that the people who are best served by a union, are voting against them. Some 60-70 years ago, more than 33% of private sector employees were unionized; today that number is less than 6%. As this astute article by Jonathan Rauch states,

“I had come to see the decline of unions as one of the country’s most pressing problems—and at least as much a social and political problem as an economic one. Old-style, mid-20th-century industrial unions had their flaws, unquestionably. But when unions work as they should, they serve important social functions. They can smooth the jagged edges of globalization by giving workers bargaining power. They are associated with lower income inequality, as the accompanying graph shows. Perhaps most important, they offer workers a way to be heard.”

There’s no other way around it – Unions serve a vital function in our society. And they are dying.

From a Small Business Owner’s Point of View 

I understand why executives at publicly traded companies have a whole lot of anger towards Unions. They have a fiduciary duty to their shareholders, and they see their employees are relatively interchangeable (lose an IT guy? Just hire a new one), so giving their employees more bargaining power just so they can get a fair share of the company’s profits goes against their ethos.

But it’s totally different when we start talking about a small business. I live and die by my team. If they don’t do a good job, my clients aren’t taken care of, and then the business unravels rather quickly. So it’s my job to make sure that my team is happy, being heard, and in the best position to do their job. If I do that, they are more productive and do better work.

So where’s the disconnect?

I think a lot comes in how big businesses are taught to think about their revenues. There is one book in particular, The E-Myth, that is considered a bible for many in the business world. To over-simplify, it praises companies such as McDonald’s that operate under a franchise model, allowing the business to provide a consistent product (or service) through a churn-and-repeat business model. This idea has been pummeled into businesses to such a level that it has been taken to the extreme: every aspect of a business needs to have clear-cut guidelines so that it is just a conglomeration of interchangeable parts.

The good news is that these views are starting to shift. There are more and more reports that raising the minimum wage is helping companies retain their employees and increase productivity. The more businesses start to see that investing in their employees (at ALL levels of the company) encourages them to work more efficiently, with more dedication – while simultaneously boosting their bottom line, the more these businesses will start to make right decisions by their employees.

But this doesn’t solve another problem plaguing workers: the rapid expansion of the Gig Economy.

Pluses and Minuses for Gigs

Businesses love the gig economy: why hire someone full-time, and have to pay for healthcare, their 401k, et cetera when you can bring someone onboard as-needed? And (some) people love it too: it gives you more flexibility and, if you have an in-demand skill set, you can actually make more money this way.

But there are significant problems: this shift makes it almost impossible to enter the workforce. When a company uses a freelancer, the first thing they ask is to see a portfolio. If you’re just starting out,  getting a gig beyond driving for Lyft or shopping for Instacart can be a stretch.

Enter Unions

The Atlantic article by Rauch linked to above introduces an interesting idea for Union reform, called the Ghent System. It’s modeled after Unions in Denmark and Sweden, where the Unions administer unemployment benefits, shifting their mission from protecting people’s jobs to protecting their livelihoods. Sounds like it’s one and the same, sure, but there is a huge difference.

Just think about it: if we were able to implement something similar here, Unions could administer their members’ health insurance, their retirement plans, and unemployment benefits when the need arises.

Unions could provide job-specific training, creating another avenue for people who can’t afford (or don’t have the time) to go to college to get good, reliable jobs.

Union membership would give people more flexibility (as their health insurance and retirement plan would come from the Union) and provide the safety net people are losing with the Gig Economy. What’s more, Unions could take a large portion of a company’s human resources tasks off the their plate, allowing companies to focus their resources more directly on their business rather than making sure their employees have their basic needs met.

This is not to say that this would work flawlessly; in fact, (as Rauch’s article states), this idea isn’t even a possibility yet. We would need a waiver from the federal government to even try to legislate a path forward to try this idea at the state level. But that doesn’t mean this isn’t something worth trying.

Ideas like this are not seeing the light of day in politics anymore. I think that is a problem; in fact, it’s a large reason why I’m running for office. If you agree with me and want to see ideas like this pursued, please help me out with a donation. Even $5 will make an impact. 

 

 

 

 

I am not one of those people to claim credit for a good idea. In fact, when I see or hear a good idea – I want to champion it. No matter who came up with it.

With that in mind, there’s a great idea for a carbon tax; and it’s not mine. It’s actually a Republican idea.

The Big Idea Behind a Carbon Tax

The concept is actually pretty simple: the state charges a flat tax of $40 per metric ton of carbon dioxide emissions. With approximately 227,000,000 tons of carbon dioxide emitted per year by Florida, if we were to implement this tax statewide it would mean an additional $9 billion in revenue for the state. $9 billion. That’s a big number.

The Republican idea is to make this a revenue neutral tax by allowing for tax cuts in other places. This simple move would allow us to take positive steps towards cleaner sources of energy, transportation, and products. Overall, a pretty solid idea.

I would like to take the idea just a bit further. I suggest we take that $9 billion and put it towards protecting our state from the rising sea levels. With 1,350 miles of coastline, and more than 6.5 million Floridians living at an altitude of less than 6 feet above sea level (and most of them living in Miami), we desperately need to invest in protecting ourselves from the coming floods.

But Wait: There’s More!

Ideally, the revenue from the Carbon Tax could fund a Florida Corps of Engineers that works to prepare our state for the rising sea levels. We could build it into a public-private partnership where we hire engineering firms to start prepping our homes and our communities to survive the rising sea levels. Bottom line: more jobs.

Done right, this could become a strong industry for Florida and something we can export globally. Currently, Dutch water engineers account for about 2% of their exports (more than $10 billion annually) as they have this expertise. This market is only going to grow as sea levels continue to rise, and we don’t need to cede the market to the Dutch. We can use this money to create a homegrown industry.

The benefits would be threefold:

  • Reduce our carbon footprint and thus stop furthering the initial problem
  • Ensure Miami doesn’t go the way of Atlantis
  • Develop a new local industry that can become a global leader

So why hasn’t this already happened?

There’s Always a Catch

The biggest emitter of CO2 nationwide is Electricity production (accounting for about 29% of all Greenhouse Gas Emissions), followed by Transportation (27%), and Industry (21%).

In Florida, Electric Utilities are some of the biggest donors to state political campaigns. You do the math.

But I’m not willing to just throw up my hands and give up. Our homes are literally on the line with this one, and I won’t back down.

If you agree with me that this is not only a good idea but something we need to do, I’d ask you to help me win this election. The Democratic Primary is on August 28th; I’d love your support. If you have any questions, please feel free to contact me.

 

 

Political advertisement paid for and approved by James Linwood Schulman, Democrat, for State Representative, District 115.