#minimumwage

Joe Biden reaches out for the black vote in ad campaign

#YouAintBlack Joe Biden pushes hard for the black vote.

For a man that actively pushed for the 1994 Crime Bill to stop super predators. One who thinks Hispanics are far more diverse than the black community and the guy that believes that poor kids are just as smart as white kids.

The insincerity is there for all to see. Trump was on the money in the last debate – Biden is a typical politician – all talk no action.

How the Bottom 50% in the USA have fared over the last 30 years

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Thanks to the SOTU, this chart from the St Louis Fed (FRED) gives us a great read across on how the Bottom 50%’s fortunes have fared over time.

Since the series began, FRED shows their aggregate wealth peaked in 2Q 1991 at $4.3 trillion. In Q1 2009, that net wealth plummetted 61% to $1.7 trillion. It sunk to a rock bottom of $300 billion in 2Q 2011, 93% down.

Under Obama, net worth for the Bottom 50% declined from $1.7 trillion in 1Q 2009 to $1.1 trillion, down 35% over his two terms. This might do some explaining as to why the “forgotten” wanted large scale change.

Under Trump, the latest net worth is back to $1.6 trillion. Still well off the highs of 3-decades ago, but one imagines if things keep improving out to November, then these people won’t want to risk their fortunes reversing again.

Of course, many will ponder the unfair wealth gap of the Top 1% at $34.5 trillion in the latest figures.

Democrats should be outraged that the ultra-wealthy have done much better under Obama with a 100% gain in net worth under his term vs the paltry 15.3% so far under Trump. Is this the real reason why Nancy Pelosi is so upset?

If you want to see how much members of Congress are worth please check out Roll Call. While some politicians come from inherited wealth, many on the public purse have managed to do pretty well on a paltry government salary.

Bernie’s lesson in free market economics

Well done Bernie Sanders. Where he couldn’t pay his staffers the $15 minimum wage he bangs on about so much, he just cuts hours so the total costs won’t change. His comments from the DesMoines Register reveal the holes in his socialist thinking. Higher minimum wages don’t create prosperity if people’s hours get cut as a result.

Some interesting reading

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John Mauldin has put together a few interesting pieces over the weekend. Some of the select quotes from Thoughts from the frontline:

Money Velocity (which CM wrote about in 2016):

velocity of money, which is continuing to fall, as it has for almost 20 years…So it is somewhat disturbing to see velocity now at its lowest point since 1949, and at levels associated with the Great Depression.”

Income Disparity:

Note that it is the 95th percentile of workers that has received the bulk of the increase in wages. The bottom 50% is either down or basically flat since 1979. Even the 70th percentile didn’t do all that well.

Budget Deficits:

Over the last half-century, higher deficits have been associated with recessions. After recessions end, the deficit shrinks, and occasionally we get a surplus. That’s not happening this time. Deficits are growing even without a recession…but in the next recession tax revenues will fall, and spending will increase enough to not only swell the annual deficit but also to add north of $2 trillion to the national debt each year. We’re using up our breathing room, and that will be a problem – sooner or later.

Monetary Policy:

Ominously, you can see from Grant’s labels (In the above chart) with arrows that peak yields tended to correspond with crises. If the current breakout persists, it is probably going to get its own label, and I bet we won’t like it.

Nothing to see here?

 

Starbucks caffeinates its employees

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Starbucks loves to serve its politics up with its bitter brew but once tax cuts are causing even the biggest virtue signaling corporation to serve its employees with an “extra shot” with whipped cream.

From the Seattle Times,

All employees will soon be able to earn paid sick time off, and the company’s parental leave benefits will include all non-birth parents. Starbucks Corp. said Wednesday that the changes affect about 150,000 full-time, part-time, hourly and salaried employees, most of whom work as baristas or shop managers. The new benefits apply to workers at more than 8,200 company-owned stores but not at the 5,700 licensed shops like those found inside supermarkets…The company will give at least $500 worth of Starbucks stock in April to employees at stores, support centers or bean roasting plants. Store managers will get $2,000 in stock grants.

#makecoffeegreatagain

59yo COO sues Fujifilm Australia for ageism

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The Australian Financial Review (AFR) reports that one of Fuji Film Australia’s executives, COO David Marshall is suing for ageism. There is a sense of irony in that the Chairman of Fujifilm Japan is 78. The AFR reports,

At a dinner at Melbourne’s Rococo restaurant in 2015, former Fujifilm CEO Kevin Masuda allegedly stood up and pointed at Mr Marshall, laughingly saying “Dave is too old” in front of senior clients…During 2017, Mr Koshimizu repeatedly referred to himself in front of Mr Marshall as “old, like past 60, retirement age” and allegedly told him Fujifilm “wants you to find the next Mr Marshall” and it was looking for a “young, strong” team.’We need a younger person’

On May 18, during a dinner at Palace Hotel in Tokyo, the chairman Mr Koshimizu told Mr Marshall “Dave, you and I are old too. We need a younger person to make strong as a general manager.”

Retirement is a hot issue in Japan. Corporates are retiring expensive workers (who are often paid based on seniority) and reemploying them as ‘advisors’ (pp.15-24) on relatively paltry sums of $1,000/mth. While it is not unusual here, it would be rather strange if Fujifilm in Australia were to make such a rookie mistake in trying to flip a worker approaching 60. In 1984 85% of male employees were full time vs 62% odd today. It isn’t surprising to see the most active demographic seeking work aren’t young uni grads but the elderly struggling to make ends meet.

 

And we wonder why the youth are abandoning Japan’s regions

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While Aussies whine and moan about cuts to penalty rates spare a thought for the poor blighters in regional Japan who have to suck up ¥800/hr (US$7.50) salaries (in this case Gunma Pref) versus around ¥950/hr in Tokyo. Sure the cost of living might be cheaper in the sticks but such disparity for someone thinking future prospects and sustainable employment. For more details on those fleeing the big smoke in Japan here.