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 You can’t amend a law that has been repealed.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 October 22, 2014 07:28 GMT

ECONOMY-THE DAY AHEAD

WASHINGTON (AP) -- The pace of corporate earnings reports eases today.

Boeing will have its numbers out before the market opens this morning, while AT&T is scheduled to release earnings after the market closes.

This morning, the Labor Department releases its Consumer Price Index for September. There's been little sign of inflation in recent months. Prices actually dropped two-tenths of a percent in August, with gasoline, airline tickets and clothing prices all falling. It was the first decline since a similar drop in April or 2013.

APEC-FINANCE MINISTERS

BEIJING (AP) -- Asia Pacific finance ministers are meeting today in Beijing to consider coordinated responses amid concerns over a slowdown in the regional economy highlighted by lower Chinese growth figures.

Opening the meeting of 21 ministers from Asia-Pacific Economic Cooperation economies, Chinese Vice Premier Zhang Gaoli said recovery from the global economic downturn had been tepid.

But he said China was on track to meet its loose goal of 7.5 percent growth for the year, with inflation stable and the economy set to produce more than 10 million new jobs.

Meeting participants, including those from the International Monetary Fund and World Bank, will discuss the regional economic outlook and discuss possible coordinated action to respond. An APEC news release said ensuring financing for infrastructure was among the issues to be discussed.

OBIT-NELSON BUNKER HUNT

DALLAS (AP) -- Nelson Bunker Hunt, a Texas oilman who once tried to corner the silver market with one of his brothers only to see the move end in financial disaster, has died. He was 88.

His brother, W. Herbert Hunt, says Nelson died Tuesday at a Dallas assisted-living center after a long battle with Alzheimer's disease.

Hunt was among the world's wealthiest men. His father was legendary Texas oilman H.L. Hunt, who left behind a multibillion-dollar fortune and Placid Oil Co., once one of the biggest independent oil companies.

But a huge, soured bet on the silver market by Hunt and his brother, Herbert, led to legal problems and bankruptcy after the price of silver collapsed.

The brothers agreed to lifetime bans from trading in commodities futures and a $10 million penalty.

Nelson Bunker Hunt filed for bankruptcy in 1988, and much of his remaining fortune was liquidated to pay creditors and the IRS.

A funeral is scheduled Friday.

EARNS-YAHOO

SUNNYVALE, Calif. (AP) -- A huge windfall from Alibaba's recent IPO has sent Yahoo's earnings soaring.

The Internet company earned $6.8 billion in the third quarter, or $6.70 per share. That compares with income of $297 million, or 28 cents per share, last year.

While Alibaba accounted for most of the difference, Yahoo's revenue also rose slightly, after posting quarterly declines for most of the past five years.

Yahoo's third-quarter revenue totaled $1.15 billion, up 1 percent increase from last year. The uptick included more than $200 million in revenue from mobile devices. That represented 17 percent of Yahoo's total revenue for the three months that ended in September, an indication that CEO Marissa Mayer's emphasis on designing sleeker applications for smartphones and tablets is starting to pay off.

EARNS-DISCOVER FINANCIAL

RIVERWOODS, Ill. (AP) -- Discover Financial Services says its third-quarter net income increased nearly 9 percent to beat market expectations.

The credit card issuer and lender's gains were made on increased credit card spending and overall lending.

Discover says its net income after preferred dividends rose to $630 million, or $1.37 per share. That compares with $579 million, or $1.20 per share, a year earlier. Revenue net of interest expense rose to $2.19 billion from $2.06 billion.

Analysts polled by FactSet expected earnings of $1.34 per share on revenue of $2.2 billion.

Shares of the Riverwoods, Illinois-based company ended regular trading up $1.68 to $64.38 and added 13 cents in extended trading following the report.

INSURER-EBOLA

UNDATED (AP) -- Global property and casualty insurer Ace Ltd. says it may exclude Ebola coverage from some of its general liability policies.

The Swiss company says it's making the decision on a "case by case" basis for new and renewal policies for U.S.-based companies and organizations that travel or have operations outside the U.S.

Ace says it's evaluating the risk for clients that might be present in select African countries with higher exposure to the Ebola virus.

While Ace may be the first to disclose such a move, Robert Hartwig, president of the Insurance Information Institute, says it is standard practice for insurers to regularly reevaluate the risk to their policies.

AMGEN-THIRD POINT

UNDATED (AP) -- A hedge fund run by a famed investor says it has taken a large stake in Amgen and now wants the biotech drugmaker to consider splitting up into two.

In a letter to investors, Third Point, a hedge fund run by Daniel Loeb, says it has recently increased its stake by an unspecified amount, making it one of the drugmaker's top shareholders. According to FactSet, Third Point already owned about 450,000 Amgen shares, a stake worth roughly $64.8 million.

In response, Amgen says its board and management are continually assessing the company's business.

JAPAN-TRADE

Japan's exports up in September; deficit persists

TOKYO (AP) -- Japan's trade deficit edged higher in September though exports rose more than expected as the yen weakened to a near six-year low.

Japan's Finance Ministry says exports jumped 6.9 percent from a year earlier in September to 6.38 trillion yen ($59.6 billion) while imports rose 6.2 percent to 7.34 trillion yen ($68.6 billion). That left a deficit of 958.3 billion yen ($8.96 billion), compared to a shortfall of 943.2 billion yen a year earlier.

Japan's currency dropped to nearly 110 yen to the U.S. dollar in September, potentially helping to make Japanese products cheaper abroad. Today, it was trading near 107 yen to the dollar.

Economists expect the U.S. economic recovery to give Japan's exports a long-awaited boost -- despite a weaker yen, demand had remained weak and the trade deficit has remained a drag on growth, thanks partly to imports of oil and gas to compensate for the country's loss of generating capacity after reactors were idled following the March 2011 disaster at the Fukushima Dai-Ichi nuclear plant.

DETROIT BANKRUPTCY-SCRAPPED METAL

DETROIT (AP) -- The city of Detroit plans to sell 13 million pounds of copper wire from its public lighting operation.

Financial consultant Gaurav Malhotra testified Tuesday in Detroit's bankruptcy trial that the city is budgeting for $25 million over six years from such a sale, but the scrapped metal could bring in about $40 million.

Detroit is phasing its electricity service over to DTE Energy Co.

Thieves have targeted below-ground and overhead wires, which they sell to scrap metal operations. They also have contributed to widespread blight in Detroit by stealing wire, copper pipes, fixtures, air conditioners and anything else of value from vacant houses.

Federal Judge Steven Rhodes has said he expects to make a ruling in early November on the city's plan to get out of bankruptcy.

SPORTS BETTING

TRENTON, N.J. (AP) -- The four major U.S. pro sports leagues and the NCAA have made another court filing in their efforts to stop New Jersey from allowing legalized sports betting.

The order to show cause was filed Tuesday in federal court in Trenton. The NFL, the NBA, the NHL, Major League Baseball and the NCAA want a judge to temporarily prevent New Jersey's casinos and racetracks from taking sports wagers.

Republican Gov. Chris Christie on Friday signed a law that effectively repeals the state's ban on sports wagering. Monmouth Park racetrack says it plans to accept bets starting Sunday.

A federal judge is expected to rule this week.

The two sides have been fighting in court since 2012, when Christie signed a law authorizing sports betting. Only Nevada offers single-game betting, and three other states are allowed to sell sports parlay pools.

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