UBER AND THE DEMOCRATS’ OLD WAYS

Presidential candidate Hillary Clinton doesn’t get it. Obama administration Labor Secretary Thomas Perez doesn’t get it. New York Mayor Bill de Blasio doesn’t seem to get it, either, as he only reluctantly reversed a bad decision on the matter.

In fact, generally, in a somewhat surprising reversal, many so-called Democratic “progressives” want to protect the old ways. But there are exceptions, like Virginia Gov. Terry McAuliffe, who worked with Uber to create a legal framework in his state; Sen. Cory Booker (D-N.J.), who says that hailing a cab has provided some of his most humiliating moments; and Rep. Hakeem Jeffries (D-NY), a Brooklynite who during Uber’s recent showdown with de Blasio said, in essence, “What’s wrong with a little competition?”

On the other hand, Republicans, who are accused occasionally of supporting “crony capitalism,” have embraced the new way and have been eager to let in new businesses to compete. Sen. Marco Rubio of Florida, a Republican presidential hopeful, gets it. One of the chapters in his recent book is titled, “Making America Safe for Uber.”

The new way is the “sharing” or “gig” economy of Uber, Lyft, Airbnb and others. Republican politicians seem more open to embracing these new businesses and new jobs, and the freedom of citizens to contract with each other.  

Spurred by unions, powerful bureaucracies, a lack of personal experience, and perhaps a more favorable view of regulation, many Democrats want to ban, restrict, and tax these services.

A politician’s position on Uber is a proxy for how in touch they are with their community. De Blasio obviously had no idea how people move around his city. And Clinton likely hasn’t driven a car in decades. What all politicians should start seeing is why it is both bad policy and bad politics to jump in aggressively and try to ban or heavily burden these services. 

It’s bad policy because the transportation services are not just for upper-class urban dwellers. In fact, as a college president recently discovered while moonlighting as an Uber driver, these services are an important alternative for the working poor with limited public transportation options. They also don’t discriminate against minorities, the way many taxi drivers do.

Meanwhile, the home-sharing phenomenon created by Airbnb brings needed cash (and sometimes a cure for loneliness) for homeowners while allowing locales to attract additional visitors.

All this economic activity adds to reportable income and benefits both the public coffers and the economy.

My personal experiences with these services are almost all positive. My brother makes his mortgage payments on his Hawaii home only thanks to Airbnb. (He pays the same local taxes as a hotel.) My family is visiting Manhattan for a few days in August, and by using Airbnb we can have a reasonably priced separate room for the kids. (Try finding a Manhattan two-bedroom hotel room for less than $1,000 a day.)

I travel a lot for business and rely on Uber. I find ride hailing service drivers better. They have clean, smoke-free cars; they don't talk on the phone while driving; and our rating of each other after the drive ensures we both are courteous and safe. It is simply better than the typical cab experience. Plus, it is great competition.

In July, I took an Uber from Denver to Aspen for $240, less than half the cost of any timely alternative. It was scenic and fun, and I connected with the driver. Compare that to my United Airlines experience for that reverse route months earlier, when I paid double what I paid Uber, plus got hit with $250 in excess-baggage fees and was told a two-day-old policy barred me from checking my bags to another airline. (Thus, I missed my connecting Delta flight.) Yes, Uber was a great substitute for United.

It’s bad politics to oppose these services as they delight millions of average Americans. Moreover, they contribute to the financial well-being of tens of thousands of Americans who rely on them for supplemental income. For 84 percent of Lyft drivers, it’s not a full-time job. Uber likely has similar numbers.  

Some “progressives” are uncomfortable and argue that these drivers and homeowners are somehow worse off without government intervention. They want regulation going beyond safety, background screening, and insurance. They want union-like regulation for home-sharing and employee-related regulations and benefits for Uber and Lyft drivers.

Talk about imposing the nanny state on consenting adults. Having taken scores of Uber or Lyft rides, I have yet to meet a driver who says they want the government determining their employment status.

So, if Democratic politicians want to dig in their heels in fealty to unions and unnecessarily burden these services, Republicans can make inroads on many traditional Democratic constituencies. I can't wait to see the platforms of both parties leading up to their conventions. I predict that Republicans will embrace the sharing economy and that Democrats will try to, but add a lot of ifs, ands, or buts.

Via: American Spectator

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[COMMENTARY] Overtime regulations will hurt workplace flexibility, not raise wages

President Barack Obama has pitched his new overtime regulations as a way to raise wages. However, even economists who support the change admit that's unlikely to happen. Instead, they expect employers to cut workers' pay by an offsetting amount.

So how will this new overtime rule affect the economy? Primarily by forcing salaried workers to log their hours. That's right - more work, same pay.

Under federal law, all employees paid hourly rates get overtime - 1.5 times their regular wages - for working more than 40 hours a week. The law exempts some salaried employees.

Employees with sufficiently advanced job duties (generally in executive, professional, or administrative jobs) and who make more than a set amount can get paid a flat salary for the work they do.

The administration just proposed raising that salary level to $50,440 a year and increasing it each year going forward. Employees making less than that amount, no matter what they do, would qualify for overtime pay.

At first glance this looks like a great idea. Who could oppose more workers getting overtime? However, economics didn't earn the moniker "the dismal science" for nothing. The fact is, these regulations will have little effect on pay.

Economists have found that employees and employers care mostly about their overall employment package: total hours worked and total pay offered for those hours. They don't care much about the pay rate for individual hours, provided the overall package doesn't change. So when the government requires employers to pay extra for overtime hours, they do - and reduce base wages by about the same amount. Workers' weekly take-home pay changes little.

Overtime only affects total pay for workers making near the minimum wage. Their employers cannot legally cut their base pay. However, these workers already automatically qualify for it. Overtime has little effect on total compensation for everyone else.

Many economic studies come to this conclusion. One recent study examined what happened when Japanese courts extended overtime to previously exempt salaried employees - precisely what the administration proposes. Japanese employers reduced base pay by an amount equal to the new overtime eligibility. Average hourly pay - including overtime - remained unchanged.

Even the architects of the overtime rule understand this. Jared Bernstein, former chief economic adviser to Vice President Biden, wrote an influential paper last year calling for the administration to expand overtime eligibility. The report drove the administration's decision to promulgate these regulations.

However, Bernstein candidly admits these regulations won't raise pay. As he puts it:

"The costs of increased (overtime) coverage would ultimately be borne by workers as employers set base wages taking expected overtime pay into account."

Yet President Obama and Labor Secretary Thomas Perez are arguing the new regulations will provide a $1 billion raise for American workers. They won't. Worse, the new overtime regulations will make juggling work and family life harder for millions of salaried employees.

Many employees prefer being overtime-exempt. It means they don't have to track their hours - and have more flexibility over when and where they work. Exempt salaried employees can take off work early in the afternoon to be with family, and then make up the work later when their kids are sleep. All they have to worry about is getting their work done - not when or where they do it.

Increasingly technology enables Americans to telecommute. About 3 million employees primarily telecommute to work, and over 15 million more telecommute at least once a month. (These numbers exclude the self-employed). The flexibility of working from home makes it a lot easier for working parents to fulfill their obligations as employees and as parents.

Overtime-eligible employees have much less freedom over when and where they work. They must log their hours. Even if they don't work overtime, they need to prove it. Their employers risk lawsuits if they don't. Trial lawyers filed 8,000 federal Fair Labor Standards Act lawsuits last year.

So employers often forbid overtime-eligible employees from working remotely - much less telecommuting. Instead they must clock in and clock out on schedule so their firm can precisely calculate their overtime liability. As a Pitney Bowes spokesman explained to reporters, the firm denied overtime eligible workers' requests to work from home because "you just don't take the (legal) risk."

That defuses lawsuits, but it also deprives overtime eligible employees of flexibility to balance work and family lives. The administrations' proposal will effectively convert 5 million professional employees into hourly workers. They will lose flexibility at work without getting paid any more. So much for helping middle-class families.

Via: Heritage 

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LABOR DEPT: SAME-SEX SPOUSES MUST RECEIVE BENEFITS REGARDLESS OF STATE LAWS

On September 18, the Obama Labor Department announced that married same-sex couples must receive the same pensions, 401(k)s, health plans, and employee benefits as heterosexual married couples, regardless of whether they live in one of the 37 states where same-sex marriage is illegal. 

"This decision represents a historic step forward toward equality for all American families,"said Labor Secretary Thomas Perez. "I have directed the department's agency heads to ensure that they are implementing the decision in a way that provides maximum protection for workers and their families."

The Labor Department said its interpretation "provides a uniform rule of recognition that can be applied with certainty by stakeholders, including employers, plan administrators, participants, and beneficiaries."

Gay marriage is now legal in 13 states and the District of Columbia. The new ruling will require the 37 states where gay marriage is illegal to extend spousal benefits to same-sex couples. 

Via: Breitbart

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