Sick time bill: New York ‘going in wrong direction’ for jobs, expert argues

May 10, 2013

This is a reprint of a column by Dan Orlando a reporter for New York Business Journal:

New York City is now the largest metropolis to approve a bill that mandates paid sick leave for employees. The measure which will provide approximately 1 million more workers up to 5 paid days off is tentatively scheduled to launch in April of 2014 for businesses that employ 20 or more people. In the fall of 2015 fit will take effect for business sporting between 15 and 19 employees.

Mayor Michael Bloomberg has publicly stated his displeasure with the now passed bill, expressing concern for what it could do to small business owners.

Michael Saltsman, research director at the Employment Policies Institute in DC, agrees with him.

“New York is going in the wrong direction,” Saltsman told me. “The policies are well intentioned but will have unintended consequences, especially in the service industry and the entry level job market.

Saltsman argues that forcing small businesses with narrow profit margins to fund time off for part-time workers could lead to fewer available employment opportunities.

“When you mandate something like this, companies need to scale back on part-time help,” he said.

Saltsman referred me to a study he published this past February that looked at Connecticut’s recent statewide passing of similar sick-leave legislation.

The report indicates that 31 of 156 Connecticut businesses that were surveyed “scaled back on employee hours, and another six reduced employee wages.”

Also mentioned are 19 businesses that increased consumer prices, 6 that laid off workers, and 16 that “indicated” that they cancelled plans to expand within Connecticut.

Of the businesses surveyed, 38 said that they would provide less job openings because of the added cost of paid time off.

City Council Speaker, Christine C. Quinn, recognizes the potential pitfalls that Saltsman and his study warn against but— despite her previous opposition to the bill—she is now confident that the legislation will “make a positive impact on the lives of New Yorkers.”

“This legislation fully recognizes the importance of protecting the city’s economy,” said Quinn before the official vote took place, “and locks in protections to ensure that its implementation is pegged to continue recovery.”

Gale A. Brewer, council member and the lead bill sponsor, added to Quinn’s sentiments, saying that “Approximately 1 million New Yorkers will now have the fundamental right to a paid day off when they or a family member falls ill, and no worker will be fired if they must stay home. This is a tremendous accomplishment of which all fair-minded New Yorkers can be proud.”

The bill passed with enough votes to negate a veto from Mayor Bloomberg.


Moral Relativism Strikes Again

April 14, 2013

The nation has been justly horrified at the news out of Albany New York concerning a social studies assignment in which high school students were asked to write an essay justifying Nazi treatment of Jews. The teacher was suspended, which was the right thing to do, but the district announced they will hold diversity workshops to help students get over whatever trauma they suffered.

Given that one-third of the students refused to participate in the assignment, it’s good to know that not all students thought this was a useful academic enterprise. The adults, however, in suggesting the need for workshops forcusing on diversity and tolerance, are missing entirely the source of the problem.

This exercise and other similar examples that have been reported in other states reflect the fact that the teacher in question took to the extreme a core tenet of 21st century social science which says anything is permissible as long as it is done in support of politically correct positions. This is a fundamental violation of almost every ethical and religious doctrine, but unfortunately it has become a foundation of modern political behavior.

Taken to the extreme, diversity has come to mean that all viewpoints are equal. I wouldn’t be surprised if the ACLU defended the teacher’s right to conduct such an exercise.

A critical definciency in 21st century social science and its political counterpart is the lack of belief in evil. If there’s no such thing as evil––just winners and losers––then all things are permissible in the pursuit of one’s goals. That means thinking like Nazis or Islamic Jihadists can be a legitimate learning experience.

A fundamental principle of ethics and religion is there are boundaries one may not cross in one’s personal or public life. To most of us that starts with the Ten Commandments. Of course, the Ten Commandments may not be taught in public school. Instead teachers praise leaders for whom the end justify the means and teach that one shouldn’t let one’s religious or personal beliefs interfere with what’s “good” for society. Example? Those who argue you’re intolerant if you don’t support gay marriage or amnesty for illegal immigrants.

Instead of focusing on diversity, the Albany schools might ask students to puzzle out what kind of thinking allowed Adam Lanza to enter the elementary school he attended with the goal of killing children he did not know? That could have led to a discussion of whether it’s possible for either mental health professionals or government agents to determine who is likely to resort to violence, which is what much of gun control legislation purports to accomplish. That in turn could have led to a discussion of individual responsibility and whether a society where anything goes will long endure.


Why Newspaper Readers Are Mad and Don’t Rent from Budget…

March 9, 2013

Why Newspaper readers are mad

Jay Jochowitz, the editorial page editor at the Times Union, complained recently on Facebook about the public’s anger in dealing with the newspaper. One commentator thought the problem stemmed from the Internet and the ability of people to rant and rave–as if letting the public speak and be heard is a bad thing in a democracy. My take is that the anger at the media stems from the breakdown of the distinction between the opinion pages and news pages.

People my age remember when stories on the New York Times news pages weren’t editorials posing as news stories. That breakdown should be seen through the prism of class. The news media is seen as a biased vehicle of those in power in this country. That means non-college educated Americans and working and middle class white males find their views treated with disdain at best in the national news media. Hence the anger, which in the case of the Times Union, is exacerbated by the fact that the TU does not allow readers to comment on news stories.

I suspect Jay and my friend Rex Smith, the TU’s editor, are in favor of allowing reader comments. Maybe they need to let corporate Hearst listen in on some of those angry phone calls. Then they can explain that one way to reduce the number and volume of those calls would be to allow readers to express their views on news stories as well as editorials.

Don’t Rent from Budget Rental Cars…

I made the mistake of renting from Budget on a recent trip to Albany. They were the first name on the list and had I known they are not on the airport, I would have skipped over them.

Having to get them to pick me up at the airport was only the start of my problems. Because it took so long for someone to pick me up, I was worried about being late for an appointment and misunderstood the agent’s explanation of gas payment options–a fact I only discovered when I turned the car in.

Now here’s why you shouldn’t rent from Budget. When I explained the problem to the agent when I dropped off my car, he told me I would have to call Budget’s 800#…which I did only to be told the Albany office is a franchise and I would have to talk to the owners. However, it’s impossible to get the owners on the phone. Either they’re not there or they pretend they’re not.

This problem is not unique to Albany. I’m in Tucson this week. One of the first stories I read in the local paper is about a similar problem. Someone was overcharged and corporate Budget tried to pass the buck blaming the franchisee.

Bottom line. Avoid Budget at all costs.


Why We’re in This Mess

March 1, 2013

The NYS Comptroller revealed today that New York State overpaid Medicaid $26 million due to flaws in the computer system built to process claims. We should be pleased that the Comptroller’s auditors found the problem and that the NYS Dept. of Health is implementing the OSC recommendations. Unfortunately, however, this is another case of shutting the barn door after the entire herd escaped.

What the Comptroller’s press release does NOT tell us is why the mistake was made? Who developed the computer system? Was it a private contractor or an in-house system? Was political favoritism involved either in choosing the winner of a bid or deciding against letting a contract for the system? Why did it take so long to discover the problem? Will any heads roll as a result?

In a nutshell this is the problem with modern government––federal and state. No one takes responsibility or pays the price either for success or failure.

Andrew Mason, Groupon CEO, lost his job today. It probably should have happened in November of last year. He did a lousy job and he had to go.

In the public sector, you have to commit a crime to lose your job and, if you’re a teacher in the NYC school system, even that’s not assured.

In the public sector, no one pays the price when $26 million dollars are pissed away, just like no one is rewarded beyond their regular salary if they save the taxpayers money or exceed expected results.

That is why so many government run programs either fail or produce mediocre results. We rely on the good will of the public sector employee to care about the results. That’s nice when it works, but what about when it doesn’t work? What about when a person has been promoted above their level of competency? What about when someone consistenly makes bad decisions? What about the lack of oversight coming from the Executive Chamber and the White House?

Management in the public sector suffers because our elected officials seem to spend 99% of their time campaigning. Even Barack Obama spends most of his time campaigning and he can’t run again.

Who’s minding the store?

Sampling other recent audits from the Comptroller’s office we learn that many localities fail to employ proper procedures for monitoring expenditures. A few examples:

• Payments were made to the clerk-treasurer of the village of Richmondville without board approval.
• In the village of Forestville, “the clerk-treasurer’s records for the water fund were inaccurate and misrepresented the fund’s financial condition.”
• The Town of Finley board “did not develop and adopt accurate budgets…based on realistic estimates of revenues and expenditures.”
• The Village of Parish’ board “did not ensure that all claims were audited prior to payment…”
• There are significant weaknesses with the timeliness and accuracy of how the town of Livingston’s tax collector recorded, supported, deposited, disbursed and reported tax payments.
• Internal controls over cash receipts and disbursements were not appropriately designed or operating effectively for the Niagara County Soil and Water Conservation District.

In a year’s time, the Comptroller’s office finds dozens of examples of mismanagement and poor controls. They also find fraud and theft, which lead to criminal prosecution and conviction. But keep in mind that what is discovered is only the tip of the iceberg and all of the problems are discovered AFTER THE FACT.

All of the above explain why so few Americans––other than the ones who are going to be furloughed––are upset about sequester. Americans know in too many instances their local, state and federal governments are not being managed properly. They know too much of their money is being wasted. They know too many of those who should be benefiting from government programs are being short-changed.

That’s the part of the story some people don’t want to hear. It’s not because the public hates government or doesn’t think it’s needed. What we hate is mismanagement and waste––not the public sector employee. We hate that system doesn’t include the possibility that a bad job is punished and a good job is rewarded. We hate thinking this is the best there is. AND, we hate those who make excuses and blame the messenger. It’s time the apologists for mediocrity and failure took some responsibility or get out of the way. Let’s clean up this mess now.


Mandate Relief: A Proposal

February 23, 2013

Localities across NYS have been begging for ‘mandate relief’ for years, but their appeals have fallen on deaf ears in Albany. Until now governors and legislators have been loath to give localities a break on requirements they felt were necessary when they passed them. The concept threatens to open a Pandora’s box of allowing localities to ignore Albany’s dictates whenever they feel like it.

At the same time, we know that many of these same localities are teetering on the edge of bankruptcy. Just this week Moody’s Investors Service reiterated its negative outlook for local governments across the country. (See: http://www.moodys.com/research/Moodys-Outlook-for-US-local-governments-remains-negative-in-2013–PR_266803) Facing heavy public safety budgets and rapidly expanding pension obligations they cannot afford, localities are screaming for help.

Gov. Cuomo’s solution is to allow them to borrow against future savings. Not only is this questionable in terms of whether the NYS Constitution allows it, but it’s another short-term solution. What happens if that’s not enough?

Here’s a solution that addresses both short term and long-term needs.

The Governor and Legislature should offer temporary mandate relief to localities in proportion to the extent to which they move either to share services or merge with other jurisdictions.

In other words Albany ought to offer this carrot: We’ll give you a break on certain mandates if you show us that you are capable of finding solutions to local governance that cost taxpayers less while improving the quality of the services you deliver.

Mandate relief ought to match up with the specific efficiency improvement employed. In other words, if two school districts merge there ought to be a list of education mandates the combined district can choose to ignore for the next three or five years while they manage the transition. Same with towns, villages, cities or counties that incorporate other jurisdictions. So, if the city of Schenectady dissolves its governmental functions into the County, the County would be given temporary relief from having to comply with cumbersome mandates to help it digest the added obligations.

The State must continue to offer consolidation assistance so that localities don’t offer the excuse of they don’t know how to do it.

I would not, however, like this concept to defer the State from looking at mandate relief that it can offer across the board. There are surely some requirements that no longer make sense in proportion to the cost imposed on the localities. Some mandates, however, ought to be retained and state officials will be able to make a stronger case for those when unneeded mandates are eliminated.


Consolidation is still the best solution

February 21, 2013

The focus of the debate today is on the tax cap. NYSUT has gone to court to overturn it; while the Business Council opposes that move. Both have their points. A rigid tax cap doesn’t allow for local needs. Although the 2% limit can be breached, there’s a cost in terms of people power and money to do so. On the other side without a cap, local government administrators lack any incentive to increase efficiency.

Gov. Cuomo’s solution––borrowing from future pension savings––has not won over a number of mayors and other officials. (See Stephanie Miner’s op ed “Cuomo to Cities: Just Borrow” in the New York Times)

The long-term solution is still consolidation. I’ve made this argument many times before. So if you don’t like my reasons, consider another data point offered by UB Prof. Bruce Fisher. Writing in ArtVoice, Fisher points to the success the cities of Toronto and Montreal have had with regionalization — merging small inefficient local governments into their regional structure. (See “Bashing Cuomo, Ducking Mergers“)

Let’s review the facts:

    Current jurisdictional lines–city, village, town and even county boundaries–no longer reflect current demographic and technological conditions. They lead to underutilized equipment and personnel, to gaps and duplication, to bureaucratic and political infighting, poor management, fraud and the bottom line poor service delivery.
    Those who oppose consolidation are the primary beneficiaries–those whose personal pockets are lined with cash today and in retirement. They get to act like kings and queens in the name of their subjects. I thought we’d gotten rid of royalty two hundred fifty years ago!
    Consolidation can result in lower taxes and better services. Examples abound (see Fisher). But we’re not just talking about something that would be nice to have happen. For Upstate New York, consolidation is a necessity!
    In review, lots of individuals and business owners in Upstate New York would rather be elsewhere. To keep them where they are taxpayers are taking on the chin. In order to make Upstate desirable we need fewer government entities, lower energy prices and lower taxes. Consolidation gives us two out of the three.

The State Department and our friends at the Government Law Center of Albany Law School and the Rockefeller College are doing their best to help local governments face the music, but the progress is too slow. Read the Comptroller’s audit reports of local government financial management and you’ll see that too many tax dollars are being mismanaged if not outright stolen.

The solution: Increase the incentives AND the penalties for not consolidating. Also, we need political leaders who will carry this water. Tell your constituents that they’re putting nails in their communities’ coffins every day they delay in merging with other jurisdictions. That includes some counties which ought to merge given how few people live within their borders.

Final point: Isn’t consolidation a solution both NYSUT and the Business Council could agree on? Wouldn’t both win with stronger school districts and a friendlier climate for the business community?


Who’s Watching Washington?

February 14, 2013

In light of President Obama’s pledge to introduce more programs to solve our nation’s problems, someone ought to ask him how those already in place are doing! How well are taxpayers being served by the Energy Department’s Economic Recovery Act grants, for example? The one to LG Chem Michigan, the manufacturer of car batteries, seems to have been a near total waste of $150 million dollars. According to today’s Washington Post (Page A11), the U.S. Inspector General issued a report that found less than half of the promised jobs were created AND workers were found to be playing games, watching movies––even volunteering for animal shelters WHILE GETTING PAID.

Those were monies that the administration spent to stimulate the economy and we already know they deserve a C at best for those efforts. What about the day to day routine operations of government in Washington? Let’s take the U.S. Department of Housing and Urban Development as a case study in how Washington operates. First, Congress authorizes expenditures that propose to solve some problem. In this case affordable housing. Then dozens of people are hired to administer the program at the federal level and of course at the state level as well. Then if there’s anything left over, local politicians decide where those monies are spent and which of their campaign donars get the work. The people who need affordable housing? A few of them get the housing, but not as many as if Washington had just given them the money in the first place and let them buy their own housing.

Then there’s the sad truth that all these federal and state employees whose job it is to manage the $1 to $2 billion annual expenditure designed to build, buy or renovate housing are not up to the job. I don’t blame them individually, but I do fault the concept. Why would we expect layers upon layers of bureaucrats to be able to do a good job managing monies whose intent is clouded by political aims? At best the U.S. Department of Housing and Urban Development should be shuttered. If states want to use taxpayer monies to build and renovate affordable housing, fine, but why should the federal government be involved? Oh, the Inspector General–which seems to be the only agency in Washington that does its job–which found HUD’s oversight faulty a year ago says there hasn’t been much improvement (Washington Post, 2/14/13, Page A2). Are we surprised?


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