Employers may elect to simply stop offering health care benefits

No kidding? This is exactly what the Obama administration and their socialist cohorts want. Employers will look at the options, and all of them will slowly come to the realization health care benefits cost money and since the federal government is going to cover everyone, why be involved at all?

Read more

Newport Beach lifeguard staff and unsustainable pensions

Lifeguards have an important job as first responders saving lives just like EMTs and paramedics. But in Newport Beach, Calif., it’s not a question of their performance or need, it’s the $100,000 in pay and benefits many guards earn each year after retirement at age 50.

Read more

San Jose police chief clears $534,000 during final year in position

Not a bad deal at all, but wait till you hear how much he gets to make in retirement. Yes, this is an individual case that does not represent every public employee. But it is a good example of what is wrong with the system. Cities and towns are writing post-dated checks that must be cashed for decades to come.

Read more

Pelosi strikes deal with unions – no tax on high-cost health care plans

You knew this would happen. The unions deserve payback for support of Democrats and President Obama, so when the plan to tax “Cadillac” health care plans would obviously included those negotiated by collective bargaining teams, something had to be done. It’s change you can believe in!

Read more

Economics lesson: supply and demand for firefighters in Miami

A story at the Fox News 7 Web site caught my eye this morning. Almost 1,000 applicants lined up for 35 available firefighter positions that will be available in the City of Miami.

Three of those who were waiting in line were interviewed, the first was a former Marine who was unemployed and the other two had waited days in line for a chance to apply for one of the positions.

Looking for work is not fun, It is – quite honestly – a full time job. For these three guys looking for work in south Florida with unemployment hovering around 7 percent, a Miami firefighter position would be good work.

My question is this. Why is there a line 1,000 people long for 35 firefighter positions? Could it be that the pay and benefits are really good? Too good?

If the supply of available candidates is so high, it’s time for the City of Miami to take a look at their union contracts to see if the pay and benefits are too high. I know, it’s a harsh statement. Of course, being a firefighter is a position that is important to the community, and in a city the size of Miami even more so.

But if you were running a business that needed to stay in the black to keep things going, what would you do if you had three positions open and 100 people lined up at the door overnight – in the rain – looking to apply?

If you’re one that says you would not lower pay or cut benefits, I can assure you competition will open their doors across the street and provide a lower pay and benefit package to employees. This will allow them to lower costs to consumers and offer the same level of quality and service.

Where would you shop?

The True Cost of Employee Health Benefits

During World War II, companies were having a tough time finding well-qualified employees due to wage and price controls. Salaries were artificially kept low, and to solve the problem employers began to offer benefits including health and life insurance, better pensions, and more vacation time to attract employees.

As time went on, employees began to take these benefits for granted. Union leaders took the reigns and bullied employers into providing benefits that could not be sustained. Employees were brainwashed into thinking that employers had to provide benefits. The problems began. (Reference GM net profit margin: -25.85% TTM)

So, what does an employer do? Read more

More on the Temporary Stimulation Package

As you may know, the bill that came out of the House did not include any extension of unemployment benefits. Now, the Senate committee reviewing the bill wants to add a temporary plan for an extension of benefits.

Michelle Malkin has a source who is a staffer in one of the House sub-committees who forwarded her some research concerning past “temporary” extension of benefits, that turned out to be not so temporary. Socialism at it’s best!

Great information:

Unemployment benefit program 1991-1994
Original proposed program length: 8 months
Original estimated cost $7 billion
Actual length: 29 months
Actual cost: $39 billion

Number of extensions: 5
Unemployment rate at start of program: 7 percent
U rate at end: 6.4 percent

Unemployment benefit program 2002-2004
Original proposed program length: 10 months
Original estimated cost $9 billion
Actual length: 29 months
Actual cost: $26 billion

Number of extensions: 2
Unemployment rate at start of program: 5.7 percent
U rate at end: 5.8 percent

Unemployment benefit program 2008
Original proposed program length: 11 months
Original estimated cost $10 billion
Actual length: ? months
Actual cost: ? billion

Number of extensions: ?
Unemployment rate at start of program: 5 percent
U rate at end: ?

SFC [Senate Finance Committee] documents suggest the “temporary” extended unemployment benefits program would operate only through CY 2008 and cost $10 billion. But these sorts of programs never work out that way.

  1. RS reports that no “temporary” extended benefits program created since 1970 has expired without being extended
  2. Programs created in the 1980s and 1990s were extended 6 and 5 times, respectively.
  3. The prospects a temporary program created today will expire at the end of 2008 as the SFC proposes – with the window of eligibility shutting two days after Christmas – is both dubious and would be without precedent in the last generation.

Even if it operated only as long as the “average” program created since 1980, a “temporary” program created now will be paying extended benefits in mid 2010.

  1. The average duration of extended benefits programs created since 1980 is 30 months.
  2. If a program started in February 2008 and paid benefits for 30 months, the final payments would be made in July 2010.
  3. The total cost of such a program would likely be $30 billion or more.

If prior extended benefits programs began when the national unemployment rate was as low as 5.0%, these “temporary” programs would have operated for decades.

  1. The U.S. unemployment rate was 5.0% or higher in every month between January 1974 and April 1997 – more than 23 years in a row.
  2. Today’s 5.0% rate is below the average of the 1970s, 1980s, and 1990s.
  3. During the Clinton Administration (1993-2000), the average unemployment rate was 5.2%.
  4. According to a 2007 report by the Congressional Budget Office, today’s 5.0% unemployment rate is the same as the “natural rate” CBO will use “both currently and for the 10-year projection period through 2017.” Put another way, according to CBO today’s unemployment rate is “normal” not “high.”
  5. Creating an extended benefits program now will create a precedent to repeat this action every time the unemployment rate reaches this historically modest level. That will cost billions of dollars and encourage more and longer unemployment.