The debate about raising the minimum wage is heating up. President Obamacalled on Congress to pass an increase in the minimum wage to $10.10 in his State of the Union address and then signed an executive order raising the wage for workers on new federal contracts. The State Board of Canvassers unanimously agreed to allow the group, “Raise Michigan” to begin collecting signatures to place a question on the November ballot to raise the minimum wage in Michigan to $10.10 an hour. What are the implications of a move to raise the minimum wage and is the “Right Thing to do?”
Last week Governor Snyder announced a plan to help the City of Detroit. The state would contribute $350 million to help save the Detroit Institute of Art and to help pay the pensions of city workers. There is no question that the state needs a healthy Detroit, but was the pledge of state dollars the “Right Thing to do?”
Without much fanfare last week, we read once again that a budget deal has been passed overwhelmingly by both the Senate and House. Didn’t we also have the news in December that a budget deal was passed? What budgets are we talking about? Can the press do a better job of reporting the information? Was the budget passed this time the “Right Thing to do?”
It has not even been a month since the Republicans and Democrats agreed to some budget cuts and revenue and spending increases to eliminate some of the sequester cuts and pass a two year budget. Some cost savings were to occur from changes in military pensions, that is reduce the cost of living adjustment (or Cola) for veterans under the age of 62 by one percentage point below inflation. That was to save $6.3 billion over 10 years. I know it is hard to believe, but there is already a move in Congress to restore the full Cola to all military retirees. Is this the “Right Thing to do?”
We had a bi-partisan deal to pass a 2 year budget and avoid another government shutdown at the end of 2013. Will that bi-partisan work continue? What can we expect and what will be the “Right Thing to do?” Let’s look at some possibilities:
On Tuesday, December 3, 2013 at 9:00 AM, U.S. Bankruptcy Judge Steven Rhodes will announce his opinion at 9:00 am as to whether or not the Detroit bankruptcy can proceed. If he says it can, the next step in the process is to have Emergency Manager Kevin Orr, submit a plan to deal with $18 billion in debt. If he says “no”, Kevin Orr will still have to wrestle with a payment plan for the debt. Major portions of that debt are the legacy costs, that is pension and retiree health plan costs. The unions contest the potential reduction in pension benefits as they say pension benefits are protected by the state constitution. Mr. Orr contends that federal bankruptcy overrules the state law and as a result pensions can be part of the potential reduction in debt. But whether or not pensions can or cannot be reduced, what about the retiree health care costs? How significant are they in the state and what possible problems lie ahead for many municipalities in Michigan? Is it time for our municipalities to reconsider retiree health benefits in order to head off “Who’s Next” in a municipal bankruptcy? What is the “Right Thing to do?”
We all have heard the uproar that has been created with the number of individuals who are having their current health insurance cancelled because the terms do not meet the requirements of Obamacare. This is despite President Obama’s assurance that “If you like your plan you can keep it, period.” The cancellations are effective December 31st this year and individuals are required to get a new policy on the healthcare website —even though it is not working and there are serious security issues.
U.S. children score lower on standardized tests than students in many developed countries. The U.S. ranks 17th in reading, 23rd in science and 31st in math, behind countries like Slovenia and Poland. One of the main differences is that high achieving countries have a higher level of difficulty for becoming teachers. Concern is growing that we will become less competitive globally unless our education system improves. It may be even more critical in Michigan because of our relatively low performance. Education Week ranked Michigan’s K-12 system 24th, 23rd in high school graduation rate, 36th in percent of adults with a college diploma, 39th in 4th grade math and 30th in 8th grade reading, according to the National Assessment of Educational Progress exam. How do we start to improve the educational performance in the U.S. and even more importantly in Michigan? What is the “Right Thing to do?”
One of the biggest political stories in 2011 was the battle in Wisconsin over Governor Scott Walker’s plans to reform the state’s relationship with public employee unions. If you remember, the state capitol was occupied by opponents to the law, there were mass demonstrations, the Democrats hid out in Illinois to avoid voting on the bill and later, the attempt to recall the Governor and several state legislators. The law was passed. Two years later, it is time to consider if that was the “Right Thing to do”.
In one issue of the Wall Street Journal last week there were 4 articles about regulators use (or is it abuse), of their power. The articles showcased Labor Secretary Perez, Health and Human Services, the State Department’s US trade negotiators and the Department of Housing and Urban Development. If we include the Energy Department’s announcement of potential new coal fired power plant regulations also last week and the Transportation Department’s new ethanol standards, we get a flavor of the activity pushing new rules outside the legislative process. Should we be concerned that more regulatory power is being exercised? Is this the “Right Thing to do?”