In kicking off the New Year, Washington has become the first state with a minimum wage of more than $9 an hour, as it joined seven other states in similar measures that index their minimum wage rates to inflation. Including workers in all industries, Washington’s minimum wage increased 37 cents to a record high of $9.04 an hour (the rate for workers who are 14 or 15 years old is $7.68), which went into effect the first day of the New Year.
According to data from the Census Bureau, more than a million low-wage U.S. workers will see their hourly wages rise, including workers in Arizona, Colorado, Florida, Montana, Ohio, Oregon, Vermont, and Washington. Based on a typical 2,000-hour work year, the wage hike will generate annual salaries for minimum-wage workers of between $15,280 and $18,080, depending on the state.
A total of 10 states currently tie their minimum wage to inflation, eight of which made adjustments for an effective date of January 1; Missouri opted to wait on a rate change and Nevada plans to make adjustments later this year. The increases per state range from $0.28 an hour in Colorado to $0.37 in Washington, and new minimum wages in the eight states now range between $7.65 and $9.04 an hour.
In her article on Monday, financial journalist Jessica Mortimer said that the euro had just set a new record low against the Japanese yen: Its value is now the lowest it’s been in 10 years. The irony wasn’t lost on her as she also noted that it was just 10 years ago that the euro was first denominated in coins and currency, three years after being introduced electronically among the member states.
And she sees further weakness in the euro, now trading below $1.30 versus the dollar, and likely to move ever lower into the New Year: “In the absence of a comprehensive European policy response to the debt crisis, the euro could test its 2010 low of $1.18.” This would imply at least another nine-percent loss in value in less than a year.
She touched on only one of the few remaining options open to keep the euro from blowing up altogether: more austerity on the backs of the citizens of the member states who took excessive advantage of lower-than-market interest rates to load up on debt that they can't pay back. She noted the survey that came out over the weekend indicating that a key European manufacturing index remains persistently below recovery levels, with further declines into a full-blown recession in Europe likely. Additional austerity measures would simply hasten that recession. Kathleen Brooks, director of research at FOREX.com, told her clients: “We remain a sell on rallies (with the euro) as we tend to think the euro zone crisis will actually get worse before it gets better.”
One of the ways that Whirlpool Corporation celebrated its 100th anniversary last year was to file petitions against two of its main South Korean competitors for “dumping” washing machines onto the market on Black Friday. Whirlpool claimed that Samsung was selling their 3.7 cubic-foot top-loading washing machines at a wholesale price of $363.18, way below the $751.46 Whirlpool says it would cost them to make the same product. Consequently, Samsung and LG Electronics sold thousands of their washers over the Black Friday weekend, taking substantial market share away from Whirlpool.
In its complaint, Whirlpool demanded an investigation into their rivals’ practice of “dumping” washers at prices that Whirlpool couldn’t match, and then demanded sanctions — tariffs — against the offending competitors and their products.
It’s worked before. Last March Whirlpool filed a similar petition about their competitors dumping high-end refrigerators and the Commerce Department agreed, applying a 37-percent duty on those refrigerators as well as forcing those competitors to post bonds if they didn’t raise their prices to “fair value.”
The lawmakers promoting the Stop Online Piracy Act (SOPA) insist that in the long term it will improve the economy by protecting the intellectual property market and the associated industries and jobs. That would increase revenue and would guard American Internet ventures against economic harm perpetrated by foreign websites.
It does seem odd that given the safeguards supposedly established by SOPA, so many online organizations — Facebook, Google, Yahoo, Reddit, and YouTube — have aligned themselves against the measure and are actively working to prevent its passage.
Perhaps these information-age giants are onto something. Perhaps they understand that by granting the government the power to pull the plug on any one of these websites at any time without warning, SOPA is a persuasive disincentive to investment and thus to corporate growth and survival.
SOPA, H.R. 3261, was introduced into the House of Representatives on October 26, 2011 by Congressman Lamar Smith (R-Texas) along with 12 co-sponsors (as of December 16, 2011, there are 31 co-sponsors signed onto the bill). The bill, which endows the federal government with a broad array of powers over Internet content and activity, is now before the House Judiciary Committee for consideration.
The spate of good news about the economy, headed up by the National Association of Realtors (NAR)’s report that pending home sales increased by 7.3 percent in November from October, has resulted in improved outlooks by many observers, along with warnings from others not to get overly confident.
Even Lawrence Yun, NAR’s chief economist, was cautious in his announcement, perhaps chastened by NAR’s admission last week that they had overstated sales for the past five years: “Housing affordability conditions are at a record high and there is a pent-up demand from buyers who’ve been on the sidelines, but contract failures have been running unusually high.” And to avoid making the same mistake twice, Yun said that some of the increase in pending home sales may be people who couldn’t qualify before who are attempting to make another purchase now.
The pending home sales index hit 100.1, the first time it has been over 100 since April of 2010 when sales were goosed by the expiration of the government’s homeowner tax credit. Actual home sales were up in November as well, hitting a seven-month high, according to the Commerce Department.
JBS CEO Art Thompson's weekly video news update for January 2-8, 2012.
A senior communist officer who helped bring an end to a standoff between local government officials and residents of the village of Wukan, located in China’s Guangdong province, warned Chinese officials to prepare for more protests and takeovers by Chinese citizens with grievances over government corruption that has included land confiscation and other abuses.
Zhu Mingguo, a deputy Communist Party secretary in the Guangdong province, led a team that met with Wukan village residents who had taken over the community in protest over a lack of compensation for lands co-opted by local government leaders. They also demanded an investigation into the death of one of the protest leaders while he was in police custody. According to Reuters News Service, for over a week the residents “had fended off police with barricades and held protests over the death in police custody of activist Xue Jinbo, whose family rejects the government’s position that he died of natural causes, and against the seizure of farmland for development.”
On December 21, following the meeting with Zhu and other provincial officials, leaders of the protests told residents to take down barriers and allow government officials into the village. For their part, the provincial government officials agreed to take a closer look at the dealings of local Communist Party bureaucrats in the sale of farmland to developers, as well as investigate the death of Xue Jinbo.
One of the most erroneous and harmful ideas of our time is the notion that free-enterprise capitalism and the society upon which it is based are incompatible with the moral standards of Christianity. Indeed, one of the main drivers of the Occupy Wall Street movement is its condemnation of “corporate greed.” And before the Occupy Wall Street crowd got going, Michael Moore was condemning free-enterprise capitalism in his spurious 2009 documentary, Capitalism: A Love Story. In one scene, Moore, one of those so-called limousine liberals who have profited very handsomely in our free-enterprise economy, asked a couple of religious leaders about capitalism. They both agreed that capitalism is “evil,” without explaining exactly why. Presumably, we are supposed to understand that Moore provides the explanation throughout the film. (One cannot help but wonder how many religious personages Moore had to interview, in order to get the responses he used.)
In fact, the very opposite of this popular belief is true: Free-enterprise capitalism and Christianity are not incompatible, because the strongest reasons to defend economic freedom and the market economy are related to Christian morality. It is economic freedom and the market economy that the moral standards of Christianity require, not the opposite economic system, commonly referred to as socialism, the welfare state, or some other name for collectivism. At the same time, economic freedom and the market economy require Christian moral standards in order to function properly.
Following a less-than-spectacular holiday shopping season, two 20th century mainstays of America’s retailing culture appear to be a step closer to historical nostalgia. As reported by the Associated Press, the parent company of Sears and K-Mart announced that it is planning to close at least 100 stores, “a move that sparked speculation about whether the 125-year-old retailer can avoid a death spiral fed by declining sales and deteriorating stores.” AP reported that Sears Holdings Corp., “a pillar of American retailing that famously began with a mail-order catalog in the 1880s, declared Tuesday that it would no longer prop up ‘marginally performing’” Sears and K-Mart locations.
In 2005, following K-Mart’s Chapter 11 bankruptcy filing, the two retail giants merged under the umbrella of Sears Holdings, and in the ensuing years the company has tried without much success to find a profitable niche for the hybrid retail partnership.
In the meantime, competitors Wal-Mart and Target have become nearly ubiquitous upon America’s urban landscape, slowly replacing aging and out-of-step Sears and K-Mart retailers with monster “super-stores” offering consumers cheaper merchandise, along with a full line of groceries, auto service, optical centers, barber and beauty services, and a combination of fast food restaurants and take-home pizza chains.
The results of the Associated Press’ survey of 36 Keynesian economists — economists who believe that government is the driving force behind a strong economy — are in: President Obama received just “mediocre marks” for his handling of the economy since his inauguration on January 20, 2009. Half of those surveyed rated his performance as “fair” while 13 rated it as “poor.” The remaining five gave the president a rating of “good.” None rated his performance as “excellent.”
The survey included explanations for why his performance was so poor even though he has surrounded himself with Keynesians. Some said he didn’t do enough: The stimulus wasn’t big enough. William Cheney, chief economist at John Hancock Financial Services, said Obama’s administration “generally tried to take the right kinds of measures but have often failed to lead with enough vigor to overcome political obstacles.”
Some said he tried to do too much and got distracted by hammering Congress into voting for his healthcare takeover. Joel Naroff, president of Naroff Economics, said, “Health care wasn’t necessarily the most important thing to be dealing with when you’re in the midst of the worst recession since the Great Depression.”