Minimum wage and trust issues

Updated: Thursday, June 5, 2014
Minimum wage and trust issues story image
KALAMAZOO, Mich. (NEWSCHANNEL 3) - There were congratulations all around last week when the Michigan Senate, in an astonishing display of speed and bi-partisanship, passed a new minimum wage law.

Under the law, the minimum wage in Michigan will rise from the $7.40 it is now to $9.25 over the next four years.

Tonight in Tom’s Corner, Tom Van Howe says--all the celebrating aside--as the old saying goes, there are two things you really don’t want to see being made: sausage and legislation.

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Excuse me for not joining the victory dance.

Its not so much that I don’t trust lawmakers--and I don’t.

It’s because I know this law is another example of how our lawmakers don’t trust you and me.

Most of you know what happened. But let me briefly explain anyway:

Our people in Washington were talking about a minimum wage hike--but with a million lobbyists saying it was better to keep people in poverty, that effort landed with a thud.

So, in Michigan, a grassroots petition drive began to amend the law to raise the minimum wage to $10.10.

There were some problems with it. Waiters and waitresses were included and that would have been a problem with our system of tipping for service.

But, nonetheless, it largely echoed what 70 percent of us thought anyway: it was time for a wage hike.

The petitions were signed by 320,000 people, and it seemed certain that the question would make it’s way to the November ballot where passage would be virtually assured.

But our Republican lawmakers were bothered by this. Not only would the law enrage some business owners and some wealthy backers, having an issue on the ballot that might rally Democratic voters just can’t be a good idea.

Its messy. Things might get out of hand.

So up jumps Senate Majority Leader Randy Richardville--Republicans have a majority in both houses so it ought not be necessary to point out Richardville is a Republican--with an idea.

No sense in risking anything with another pesky voter-driven effort; let's repeal the minimum wage law and replace it with a new one that falls short of what the voters might approve of. That way the petition, which seeks to amend the wage law, would be irrelevant, null and void, as cold and tasteless as a week old cup of coffee. You can’t amend a law that has been repealed.

And you know how long it took to get all that done? And did I mention that Democrats joined in, to make the repeal and replacement a bipartisan effort?

It took one day. I mean, there had to have been some groundwork that took a few hours, but when push came to shove--one day!

Remarkable what can be accomplished when you don’t trust voters and have to move fast.

Now the petition people are upset and say they may take their case to court...and I hope they do.

We’ll have to wait and see.

Republicans, meantime, are claiming victory. So are Democrats. So is the Governor who signed it into law almost immediately.

And that’s all fine. The only people left out in the cold are the people who pushed the envelope with a petition drive in the first place.

They get part of what they wanted, but their victory is about as exciting as twin beds.

Politicians here, there, and everywhere urge us to trust them. And then spend millions, even billions of dollars to convince us to vote for them.

It can only mean they don’t trust us, left to our own devices, to do the right thing.

In this corner...I’m Tom Van Howe.

Business News

Last Update on April 17, 2015 17:12 GMT

CONSUMER PRICES

WASHINGTON (AP) -- Rising gas prices in March led to a slight increase in inflation, a sign that some of the broader economic impact from cheaper oil is fading.

The Labor Department says the consumer price index rose 0.2 percent in March. Inflation moved at that same pace in February, which ended three straight monthly declines caused largely by falling oil and gasoline prices.

Gas prices remain about 33 percent lower than a year ago, but they bounced up 3.9 percent from February to March. Over the past 12 months, consumer prices have slumped 0.1 percent.

Outside food and energy, core prices also rose 0.2 percent in March. The cost of clothes, housing, cars, and medical care increased, while food and airfare decreased. Core prices have risen 1.8 percent in the past year.

LEADING INDICATORS

WASHINGTON (AP) -- An index designed to predict the future health of the economy slowly crept upward for the third straight month, a sign that the pace of growth has been weakening since the start of 2015.

The New York-based Conference Board says its index of leading indicators rose 0.2 percent in March, after gains of 0.1 percent in February and 0.2 percent in January.

Building permits were the weakest part of the index, while slowdowns in average working hours and new factory orders have also been in a drag over the past six months.

Conference Board economists say that the modest gains may be signaling a continued decline in growth over the coming months.

EARNS-GENERAL ELECTRIC

NEW YORK (AP) -- The industrial heart of General Electric, the company's new focus, posted lower revenue and earnings in the first quarter amid an enormous overall loss resulting from its recently-announced sale of most of the assets in its finance subsidiary.

Net income from the part of GE that the company will retain after the sale fell 5 percent to $3.1 billion, the company said Friday. Adjusted earnings per share fell 6 percent to 31 cents, a penny better than analysts polled by Zacks Investment Research expected, on average.

Revenue fell 12 percent to $29.4 billion, below the $34.4 billion analysts expected.

GE announced last week it would sell most of the assets in its GE Capital subsidiary, the latest and most dramatic move by the company to transform itself into a more focused industrial conglomerate that makes large, complicated equipment for other businesses.

Costs and charges associated with the sale totaling $14.1 billion pushed the company to an overall loss of $13.57 billion in the quarter, down from a profit of $3 billion during last year's first quarter. On a per-share basis, the company lost $1.35.

EARNS-REYNOLDS AMERICAN

WINSTON-SALEM, N.C. (AP) -- Reynolds American's first-quarter profit climbed, helped by increased cigarette prices. Its adjusted profit beat analysts' expectations.

The parent of the Camel and Pall Mall cigarette brands earned $389 million, or 73 cents per share, for the three months ended March 31. A year earlier it earned $363 million, or 67 cents per share.

Earnings, adjusted for non-recurring costs, were 86 cents per share.

Revenue amounted to $2.06 billion in the period.

Reynolds American Inc. still expects full-year adjusted earnings in the range of $3.65 to $3.80 per share. Analysts polled by FactSet predict earnings of $3.79 per share.

BLOOMBERG-TERMINALS DOWN

LONDON (AP) -- Bloomberg LP's trading terminals, which are used by most of the world's biggest financial firms, went down for a few hours today due to apparent technical problems, prompting the British government to postpone a planned 3 billion-pound ($4.4 billion) debt issue.

Users said the outage started as trading was getting in full swing around 8 a.m. in London.

By day's end in London, Bloomberg said its service had been "fully restored." In a statement, it said hardware and software failures in its network caused excessive volumes that led to customer disconnections as a result of the machines being overwhelmed.

Though the outage is an extremely rare phenomenon for the firm started by former New York mayor, Michael Bloomberg, in the early 1980s, it's likely to cause concern at the company.

Bloomberg has become the world's biggest financial information provider, overtaking rival Reuters.

JAPAN-US-TRADE

TOKYO (AP) -- Top Japan and U.S. trade officials plan to meet this weekend, seeking to close gaps over autos and farm trade before Prime Minister Shinzo Abe visits Washington later this month.

Economy minister Akira Amari announced plans for the talks with U.S. Trade Representative Michael Froman late Friday.

The U.S. and Japan must agree on market-opening measures before the 12 countries involved can reach a long-delayed final accord on the U.S.-led Trans-Pacific Partnership, a Pacific Rim trade pact.

An agreement by U.S. lawmakers Thursday to propose legislation allowing President Barack Obama to negotiate trade accords for overall congressional review appeared to help move things along.

The plan for Cabinet-level talks suggests the two sides made progress this week on resolving differences over the pace and scale of market opening.

OBAMA-TRADE

WASHINGTON (AP) -- President Barack Obama says the politics of international trade have always been difficult, especially within the Democratic Party. But he says U.S. opposition to new trade agreements would give China a leg up in setting the rules for commerce.

Obama's seeking to reassure critics by saying deals with Asia and Europe would have enforceable labor and environmental protections.

Obama spoke at a news conference with Italian Prime Minister Matteo Renzi.

Top congressional lawmakers reached a deal Thursday to pave the way for the broadest trade policy pact in years. Under the agreement, Obama would be allowed to negotiate trade accords that Congress could approve or reject, but not change.

That authority would set the stage for Obama to complete a sweeping trade agreement with 11 Pacific nations.

CHINA-TIGHTER STOCK RULES

BEIJING (AP) -- China's securities regulator is tightening control over lending to small investors trading stocks.

The China Securities Regulatory Commission has banned a type of financing called an umbrella trust, tightened control over other financing and told brokerages to limit potential risks, the commission said in a statement Friday.

The statement cited comments by the commission's deputy chairman, Zhang Yujun, to a gathering of brokerage executives.

China's stock market has doubled over the past year as more small investors shift money into stocks. Tighter control over lending might reflect concerns that investors are taking on too much risk.

Zhang was cited as saying the commission plans to intensify inspection and law enforcement efforts.

GREECE-BAILOUT

ATHENS, Greece (AP) -- Greek officials say negotiators are to meet representatives of the country's creditors again on Saturday to "find common ground" in tortuous talks over the future of Greece's bailout.

Dependent on funds from two multi-billion euro bailouts since 2010, Greece is fast running out of cash. Negotiations with representatives of its creditors in other eurozone countries, the International Monetary Fund and the European Central Bank have not gone well, with the new left-wing government in Athens insisting their demands are too onerous.

For their part, the creditors insist the country must produce credible reforms before they unlock the final 7.2 billion euro installment. Without it, Greece could default on debts it must repay the IMF next month, and run out of cash to pay salaries and pensions.

OIL TRAINS-SAFETY

WASHINGTON (AP) -- Federal transportation officials say they're taking a series of steps to improve the safety of trains hauling crude oil and other flammable liquids, including an emergency order limiting train speeds to no more than 40 mph in "high impact" urban areas.

Among other steps announced Friday by the Department of Transportation is a warning to railroads to use the latest technology to check for flaws in train wheels.

Major freight railroads are already limiting oil trains to no more 40 mph in urban areas under a voluntary agreement, but the order makes that a requirement and extends it to trains carrying other flammable liquids like ethanol.

There have been dozens of fiery crashes over past decade involving trains hauling oil and ethanol in the U.S. and Canada.

FEDERAL LANDS-ROYALTIES

WASHINGTON (AP) -- The Obama administration is taking the first step toward a possible increase in the fees charged for oil and gas companies to drill on federal lands.

The Bureau of Land Management is seeking public comments on proposed regulations that would give the government more flexibility to set fees.

Government auditors have consistently questioned whether the public is getting a fair return from the 12.5 percent royalty now being charged.

Interior Secretary Sally Jewell says the current regulations have failed to keep pace with technological advances and market conditions.

A low royalty rate encourages oil and gas exploration, and any increase would likely raise protests from industry and others that it will lessen production and increase prices at the pump.

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