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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 You can’t amend a law that has been repealed.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 January 29, 2015 18:35 GMT

UNEMPLOYMENT BENEFITS

WASHINGTON (AP) -- The number of people seeking unemployment aid plunged last week to the lowest level in almost 15 years, a sign hiring will likely remain healthy.

The Labor Department says weekly applications dropped 43,000 to a seasonally adjusted 265,000, the lowest level since April 2000. That is also the biggest decline in two years. The four-week average, a less volatile measure, fell 8,250 to 298,500.

The latest drop may have been exaggerated by the federal holiday, which likely slowed the processing of some claims.

Applications are a proxy for layoffs, so the sharp decline means companies are cutting fewer jobs. The four-week average has fallen 11 percent in the past year. At the same time, hiring has picked up. Employers added almost 3 million jobs last year, the most since 1999.

MORTGAGE RATES

WASHINGTON (AP) -- Average long-term U.S. mortgage rates rose slightly this week after four straight weeks of declines, while remaining near historically low levels.

Mortgage company Freddie Mac says the nationwide average for a 30-year mortgage edged up to 3.66 percent from 3.63 percent last week. The new average rate is still at its lowest level since May 2013.

The rate for the 15-year loan, a popular choice for people who are refinancing, increased to 2.98 percent from 2.93 percent last week.

A year ago, the average 30-year mortgage stood at 4.32 percent and the 15-year mortgage at 3.40 percent. Mortgage rates have remained low even though the Federal Reserve in October ended its monthly bond purchases, which were meant to hold down long-term rates.

ECONOMY-HOUSEHOLDS

WASHINGTON (AP) -- Despite signs that the economy is returning to health, two new reports suggest that most Americans are walking a dangerous financial tightrope.

An analysis of Fed survey data by the Pew Charitable Trusts finds 47 percent of U.S. households say they spend all of their income, go into debt or dip into savings to meet their annual expenses.

The Pew analysis found that if a typical middle-class household had to weather a period of joblessness without any income, its available savings would be exhausted within 21 days. And if that same family also cashed in all their retirement investments to get by, they would burn through those assets within four months.

A separate economic scorecard released today says nearly 56 percent of U.S. consumers have subprime or near-prime credit scores, meaning they must pay a premium to borrow if they qualify at all for traditional loans and credit cards. And roughly 20 percent of households depend on "fringe financial services" such as payday lenders, according to the report by the nonprofit Corporation for Enterprise Development.

OBAMA-BUDGET

WASHINGTON (AP) -- The White House says President Barack Obama's budget will propose spending $74 billion more than current spending caps. That would be an increase of about 7 percent.

Obama plans to release his budget for the next fiscal year on Monday. The White House says Obama will propose $530 million for domestic programs, which is $37 billion more than the limits established by so-called sequestration.

Obama will also propose $561 billion for defense spending. That's an increase of $38 billion over the spending limits.

Obama wants to do away with the across-the-board cuts that Democrats and Republicans agreed to in 2011 in an attempt to reduce the federal deficit.

CONGRESS-KEYSTONE

WASHINGTON (AP) -- The Republican-controlled Senate is moving toward passage of a bipartisan bill approving the Keystone XL oil pipeline.

The move defies a veto threat and sets up the first battle with the White House over energy and the environment.

The Senate plans to vote later Thursday. It's the first measure taken up by the Republican-controlled Senate, and one of the first to draw a veto threat from the president.

The bill has 60 sponsors -- enough to pass, but not enough to override a veto.

The bill would authorize construction of the nearly 1,200-mile pipeline to carry oil primarily from Canada's tar sands to Gulf Coast refineries.

Critics argue the $8 billion project would spell disaster for global warming. Supporters call it a jobs bill that would boost energy security.

ARCTIC OFFSHORE DRILLING-SHELL

ANCHORAGE, Alaska (AP) -- Royal Dutch Shell PLC says it will drill off Alaska's northwest coast in 2015 -- if it can get the permits it needs and drill safely.

Speaking in London, Chief Executive Officer Ben van Beurden said Thursday that Shell will move forward with its plan to use two drill vessels in the Chukchi (chuk-CHEE') Sea subject to getting permits and legal clearance.

Shell last drilled in Arctic waters off Alaska in 2012. One drill vessel ran aground off Kodiak. The contractor on a second was fined $12.2 million for environmental and maritime crimes.

The company is awaiting a resolution to a lawsuit that challenged the federal government's environmental review before it sold Chukchi leases in 2008.

CARS-ZERO DEATHS

WASHINGTON (AP) -- Safety researchers say the chances of dying in a crash in a late-model car or light truck fell by more than a third over three years, and nine car models had zero deaths per million registered vehicles.

The Insurance Institute for Highway Safety said that for 2011 models, there was an average of 28 driver deaths per million registered vehicle years through the 2012 calendar year, down from a rate of 48 deaths for 2008 models through 2009. A registered vehicle year is one vehicle registered for one year.

But the gap between safest and riskiest models remains wide. Three 2011 models had rates exceeding 100 deaths per million registered vehicle years.

The institute says Improved vehicle designs and safety technology helped reduced risk, but there were other factors too.

EARNS-FORD

DEARBORN, Mich. (AP) -- Ford's net income tumbled to $52 million in the fourth quarter because of trouble at its Venezuelan operations.

Ford's earnings, of a penny per share, compared with earnings of 75 cents per share in the fourth quarter a year ago.

Without one-time items, including the Venezuela charge and separation payments in Europe, Ford earned $1.1 billion in the quarter, down 15 percent from a year ago.

Pretax earnings of 26 cents per share beat Wall Street's forecast of 22 cents per share, according to FactSet.

Fourth-quarter revenue fell 4.5 percent to $35.9 billion.

For the full year, Ford earnings fell 56 percent to $3.2 billion, or 80 cents per share.

Dearborn-based Ford had repeatedly warned that its profits would be down in 2014 as it introduced 24 new vehicles.

DETROIT FORECLOSURES

DETROIT (AP) -- Hundreds of Detroit homeowners at risk of losing their property are flocking to hearings that offer them a last-ditch chance to avoid foreclosure from tax debts.

The homeowners nearly filled a long conference room in Detroit's Cobo Center while waiting for their cases to be heard. Many hoped to work out payment plans.

Detroit's neighborhoods have yet to recover from the national mortgage crisis. More than 60,000 city properties are in foreclosure, putting them at risk of being added to a huge glut of vacant houses.

Detroit is believed to have the largest number of foreclosures at any one time in the county.

Gov. Rick Snyder signed a bill this month that allows homeowners facing financial hardship to use a payment plan to pay off debts and avoid foreclosure.

GREECE-EU

ATHENS, Greece (AP) -- The European Parliament's president is to be the first European official to visit Athens, a day after announcements by Greece's nascent radical left government on rolling back a series of key budget commitments sent the country's stock market plummeting.

Martin Schulz arrives in Athens Thursday for meetings with government and opposition officials, a day ahead of eurogroup head Jeroen Dijsselbloem. Both visits are being closely watched for indications of how Alexis Tsipras' government intends to proceed in bailout negotiations.

Wednesday's hard line prompted a quick EU warning and sent local investors into a panic on the prospect that Greece might be cut off from its financial lifeline.

Ahead of his visit, Schulz wrote in an online article that Tsipras must "reach out for compromise both inside and outside the country."

RUSSIA-WORLD CUP BUDGET

MOSCOW (AP) -- Russia's Sports Minister says the government will cut the budget for hosting the 2018 World Cup as part of plans to slash state expenditure while recession looms.

The Russian government is cutting its spending by 10 percent across the board after the central bank predicted last month that the economy could contract by up to 4.7 percent this year.

Mutko, who is a FIFA executive committee member, said in comments reported by the Tass news agency that World Cup stadiums and associated infrastructure would be exempt from the cuts, but "various organizational issues" and "subsidies to the organizing committee" would be cut. He did not provide specific figures.

This month, FIFA President Sepp Blatter said he had been assured by Russian President Vladimir Putin that economic problems would not affect the tournament.

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