QUOTE OF THE DAY
Real Time Economics: Shorter Workweek Is a Drag on Incomes
Add weekly paychecks to the list of victims of this unrelenting winter.
According to the Friday’s employment report, seasonally adjusted weekly pay over the past three months has lost a bit of ground compared to the average of the previous three months. Compared to a year ago, February’s weekly paychecks are up just 1.3%, the slowest advance in four years.
The problem is not hourly pay. That has been rising at a 2.0%-2.2% yearly pace throughout much of this recovery.
Washington Post: Taxpayers lost $105 million on pennies and nickels last year
In 2013, the cost of making pennies and nickels exceeded their face value for the eighth year in a row. The cost of minting a penny stood at 1.8 cents, nearly twice its face value. Nickels cost twice as much as dimes – 9.4 cents vs. 4.6 cents – despite being worth only half as much.
For a better cost comparison, we can look at the price of putting one dollar’s worth of each denomination into circulation. The U.S. Treasury spends nearly two dollars for every dollar of nickels and pennies it pumps into the economy. In contrast, the same amount of quarters and dimes costs the government less than 50 cents. A dollar bill is even cheaper, coming in at less than a quarter.
Historically, nickels and pennies have always been more expensive on a per-dollar basis than dimes and quarters – this makes sense, since it takes a lot more metal to make 100 pennies than it does to make four quarters. But the government only began losing money on nickels and pennies in 2006.
Chicago Tribune: Fired North Chicago cop draws disability pension
A North Chicago police officer involved in the beating of a suspect who later died has been awarded a disability pension — despite being fired from the department twice.
The revelation that the officer continues to receive his pension and was for a time hired back by the Police Department — only to be terminated again for violating the city’s residency requirement — prompted outrage from the family of Darrin “Dagwood” Hanna.
The 45-year-old man died in 2011, days after he was beaten by officers during his arrest for suspected domestic violence.
Forbes: The Tax Code: Make It Flat
If Republicans and pro-growth Democrats had their wits about them, they would push the flat tax.
The need for a simple flat tax was underscored recently by the comprehensive tax reform plan released by the outgoing chairman of the House Ways & Means Committee, Dave Camp (R–Mich.). The chairman decided to work with the existing tax code and has attempted to change this monster into something that encourages more economic growth. He deserves all the plaudits possible for his heroic effort.
THE GOOD, THE BAD …
Under Camp’s plan tax rates for individuals and corporations would be reduced; the hideous alternative minimum tax would be abolished; a lot of deductions would be swept away, phased out or modified; and the number of individual tax brackets would be reduced from seven to three. An estimated 95% of tax filers would be able to use the standard deduction form instead of having to itemize deductions. Much simpler!
Chicago Tribune: Emanuel wrestling with pothole problem
Mayor Rahm Emanuel today was out once again talking about the potholes that have become a scourge on Chicago streets, breaking out the term “strike team” to describe the crews that will fan out for repairs to the city’s main thoroughfares.
Potholes can be damaging to the cars that roll through them, but in a city where mayoral competence is measured in part by winter performance, they also loom as a quality-of-life issue that can do the mayor some political damage. The Emanuel administration has issued a deluge of news releases and held news conferences this winter to announce pothole tactics and tout what it says is progress being made to fill them.
Today, the mayor said he is merely working to fix a problem he takes seriously, not attempting to forestall a reprisal from angry voters during his upcoming re-election bid.
Real Time Economics: Inflation Is Tame Unless You Eat Bacon or Smoke Cigarettes
From burgers to cupcakes, almost everything is better topped with bacon. But does that list include inflation?
Consumer prices increased slowly during the past five years, up 8.2% from 2008 to 2013, according to the Labor Department. That’s an average gain of less than 2% per year. (By comparison prices rose 17% from 2003 to 2008.)
But bacon prices haven’t been held back by a weak economic recovery. The price for America’s favorite cured meat increased at more than three-times the rate of inflation since 2008. Users of peanut butter, tobacco and college text books may also have a hard time believing inflation is mild.
WSJ: The UAW Demands a Mulligan
Having lost an election at Volkswagen‘s VOW3.XE -2.53% Chattanooga plant, the United Auto Workers are charging unfair political interference and demanding another vote. Though the union’s case is dubious, the union-friendly referees at President Obama’s National Labor Relations Board (NLRB) may grant a replay anyway as part of its larger campaign to muffle anti-union political speech.
The UAW has filed an election objection with the labor board alleging that Republican politicians conducted “a coordinated and widely-publicized coercive campaign” to deprive “workers of their federally-protected right” to “support and select the UAW as their exclusive representative.” The union says intimidation by third parties should void the results based on the constitutionally shaky doctrine known as “laboratory conditions.”
The NLRB invented this doctrine in the 1948 General Shoe case when it assumed responsibility to provide “a laboratory in which an experiment may be conducted, under conditions as nearly ideal as possible, to determine the uninhibited desires of the employees.” The board ruled that, “When, in the rare extreme case, the standards drop too low” then “the experiment must be conducted over again.”
When the Civic Federation last week released its five-year budget road map for the state, it raised a few eyebrows.
Among the various recommendations made by the group for the state to pay off its bills and gradually reduce its income tax rate, the federation recommended that retirement benefits in Illinois be subject to the state income tax.
Illinois does not now tax retirement benefits, and the idea of imposing a new tax on a powerful voting bloc like seniors had lawmakers quickly declaring the idea D.O.A.
CARTOON OF THE DAY
