LET CAPITALISM DECIDE THE MINIMUM WAGE

For weeks now politicians in New York have debated ad nauseum Assemblyman Sheldon Silver’s proposal to increase the minimum wage in New York State by $1.25. The argument — whether to maintain the status quo or strive for $8.50 per hour — is wasteful political rhetoric in itself, for the determination of the wage scale is best left to the free markets.

Such an approach would not be without controversy, for most people nowadays seem to have a very misguided concept of labor, perceiving it to be a right and not a privilege. They overlook, or fail to understand, that employment is in itself a very basic economic transaction. It is no different than making a purchase at a grocery store. It’s a simple trade — one where the worker willingly gives to his employer, in exchange for monetary and benefit compensation, the use of his physical and mental services. As with any economic activity, either party can prevent ongoing transactions, whether such termination is based on dissatisfaction with what the exchange garners or on the influence of supply and demand in the micro- and macro-markets.

Those factors pit employer against employer in an openly free market when it comes to the acquisition of satisfactory or superior human talent. To be successful in the labor market, just as in the marketplace for goods and services, a business must offer to its target a package that makes it attractive to that party. In this case, the target is the potential worker and, if a business hopes to secure a good workforce, the employer must offer a wage rate and benefits package (insurance, vacations, etc.) that makes his offer competitive within the geographical region or the specific job sector (manufacturing, food service, healthcare, retail, etc).

Over time, competition collectively creates higher wages and better working conditions because employers must provide average or better wages and working conditions in order to be successful at the next level of the economic equation — the end product. If a business does not pay a wage commensurate to that of neighboring employers, the end product (be it goods or services) will suffer because the employees acquired at the lower wages are often outliers of young age or workers with suspect work ethic who were unemployable — or not sustainably employable — or unmotivated to excel in their duties. Poor quality of work can subsequently harm the health of that business — often irreparably — because customers are dissatisfied with their purchase.

Under capitalism the strong survive (and that’s why it’s far and away the very best economic system ever created).

Ironically, the minimum wage acts as a disincentive to higher wages. Many employers in low-return, low-cost sectors (like fast food or packing) have no reason to compete for workers by increasing wages or bettering work conditions because they know exactly what their competitors are paying: the legal minimum wage. It gives them a sense of certainty and a comfort level that keeps whole industries at or near the bottom salary.

Likewise, employees know that the minimum wage will provide a basic level of income, and they don’t strive to be competitive, either to get raises from their employers to seek higher wages elsewhere. As long as the state or the federal government guarantee them a steady — and often growing — income level with minimal betterment of self or the attempted attainment of a better, harder job with greater responsibility and earnings, they’ll skate by on the government’s forced benevolence. Take away the crutch, and they’ll be forced to improve themselves.

Simply put, the minimum wage is destructive to the economy in the long-term by eliminating competition from the acquisition of employment by workers and the businesses that pay them. It ultimately creates an overall lower wage by cancelling out the productive nature of capitalism that forces participants to be the best they can be. If companies were left to do their own thing — and whole classes of the workforce were properly motivated — one can logically assume the actual minimum wage would exceed the government’s $7.25 standard.

Bob Confer is a contributor to The New American. He is the vice-president of Confer Plastics, Inc. and a weekly columnist for the Greater Niagara Newspapers.


This originally appeared in the 14 February 2012 The New American at:

http://thenewamerican.com/opinion/950-bob-confer/10863-let-capitalism-decide-the-minimum-wage

USING POLICE DEPARTMENTS AS TAX COLLECTORS

America is unique in that most policing is done at the local level by county, city or village officers. In nearly all other countries the police forces are managed by the national government. That approach affords Americans a greater sense of liberty than other societies because our police are controlled by municipal governments and, therefore, the people -- our Constitutional Republic in practice. Accordingly, our police are closer and more in tune to the people they are empowered to serve and protect than they would be were they to report to a higher, distant power less in tune with the needs of the residents and more intent on the maintenance of power than the maintenance of freedom. Because of that, we have far and away the most trusted peace officers on the planet.

But, that trust in the police can easily be ruined (and has been) by unsavory local governments that choose to abuse the police power that they posses. Rather than relying on their police departments to guarantee our liberties and ensure that no one infringes on the rights of others, they use the cops as nothing more than uniformed tax collectors. That is, they challenge them to over-police the minutiae of local code and thusly reap considerable revenues by issuing tickets galore.

Think about such locales as Middleport or North Tonawanda where historically and even today passer-bys and motorists – not hardened criminals - are the primary targets and it is not uncommon for so-called “speeders” to be ticketed for 2 miles over the speed limit in confusing speed zones such as the 45 to 40 switch on Route 31 in Middleport purposely created to induce speeding. Likewise, in the Lumber City, River Road saw its long-held 55 mile speed limit drop last year, so the city (and state) used the confused commuters – driving 55 by habit – as cash cows until the constant traffic stops reformed the masses.

There’s also the village of Brockport, where they are known - even on a snow-free 50-degree November day - to ticket every vehicle parked on what is, for that day, determined to be the wrong side of the street as village laws account for snowplowing that might theoretically occur during that period in snowier times. There, they take advantage of thousands of part-time residents (college students) and those who come to town to visit them, all of whom will be unlikely to contest or barter down their tickets in court.

This all too common approach to bad policing initiated by Village Fathers can vividly be seen in practice in Alfred in Allegany County. A few weeks ago the Alfred Police Department released its annual report for 2011. It indicated that DWI arrests were half of what they were in 2008, that felonies were half 2010’s total, that misdemeanors dropped by 13%, and the Alfred police received 1,000 fewer calls for service than the year before. Those numbers caused village officials to wonder, “Should we add more police officers?”

Huh? All the statistics showed that the current staffing levels have improved the quality of life and that the calls for help dropped dramatically (a great indicator of peace), yet the municipal government somehow thinks it necessary to increase the ranks to drive up arrests and tickets. That not only assumes that there must be a lot more guilty people out there, but it also assumes that there are countless dollars for village coffers left untouched.

These greedy practices by small governments ruin the trust that people have in their police. How often have you heard someone complain about the cops in their town or a community they frequent because of these revenue-generating tactics? That’s a sad, unfortunate outlook to have for our sheriffs, constables, and deputies who are arguably the most important public servants in America. They are there for us: To protect us from society’s degenerates, to aid people in need, and offer our communities a sense of protection that most individuals cannot come close to providing for they and their families. They guarantee our liberties and ensure our freedom, allowing us to safely tend to our pursuits.

We need to support our local police and regain the full faith that the citizenry once had in them. To do that, we need to hold our local officials accountable and demand that they stop using them as a means of access to a limitless revenue stream.

Bob Confer is a Gasport resident and vice president of Confer Plastics Inc. in North Tonawanda. E-mail him at bobconfer@juno.com.


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This column originally ran in the 27 February 2012 Greater Niagara Newspapers

THE INGENUITY OF THE GREATEST GENERATION

Last week Sunday marked the birth date of my grandfather Ray Confer who, along with my father, had founded Confer Plastics. Had he been alive he would have turned 90. On that day I had spent some time pondering some of his many inventions, especially his most ubiquitous, something we all use in our day-to-day lives: the living hinge.

Ray designed the living hinge in the early 1960s as a means to more efficiently make plastic tool cases. The addition of metal hinges always added cost to the final product due to materials and assembly and such hinges always placed limitations on overall product design. So, Ray came up with an ingenious way to eliminate the metal hinges by molding a plastic hinge in process as a part of the case itself, rather than as an add on.

Basically, the living hinge is a thin section of plastic that connects two halves of a part to keep them together and allows the part to be opened and closed over and over again. It can be found in toolboxes, tackle boxes, and those plastic clamshells that are used as takeout containers and storage boxes for produce; Ray’s invention is everywhere. This was just one of his many patented ideas and countless more that went unpatented and became norms within the plastic industry and other manufacturing sectors.

His nearly limitless ingenuity got me thinking about how special he and his generation were in regard to engineering and innovation.

The Greatest Generation left an indelible mark on America from the experiences they shared during the Great Depression, the Second World War, the Korean War, and the Golden Era that followed. But, they also introduced so much advancement to us in what was, comparatively, such little time. In a few decades they pushed the limits of technology (and therefore humanity) to extremes that would have been deemed unapproachable just a few years earlier.

Men like my grandfather and other Western New York geniuses like Wilson Greatbatch and Herbert Hauptman devised so many things that dominate our lives today, as did their peers in the local aerospace industry who helped put man into space and then onto the moon. Their compatriots developed transistors, microchips, and the foundations for today’s computer technology.

It can be said without any exaggeration that the generation preceding the Baby Boomers featured the greatest and largest collection of highly-achieving thinkers, designers, engineers, and scientists ever assembled at one time. Most all them lived and worked in anonymity, outside the boundaries of fame, unlike the previous but smaller collections of bright minds of greater renown like our Founding Fathers, the scientists and artists of the Renaissance, and the Greek philosophers.

Who knows if we’ll ever see a peer group even remotely close to the creative intellect of the Greatest Generation. In recent decades it so seems that technology and science aren’t growing at the leaps and bounds they once were under the watch of today’s oldest seniors. Sure, there have been developments in efficiency and communication, but where is the next big thing that’s not a phone or tablet? Why did space travel stall at the Space Shuttle? Why is solar energy still so inefficient? Why are people still starving around the world? Why are we still so dependent on oil?

If Baby Boomers and my generation were even half as talented as their parents and grandparents, those questions – and more - would have been sufficiently answered by now. But, we’re not and chances are none of our heirs will be. The Greatest Generation is known as that for a reason. They set the bar high and it’s difficult for just anyone to attain their heights.

But, that doesn’t mean we shouldn’t try. They set a good example – no, a great example – for us. There’s a lot we can learn from them – not only what they did, but how and why they did it – and that should serve as a template for success and progress far into future generations.

Bob Confer is a Gasport resident and vice president of Confer Plastics Inc. in North Tonawanda. E-mail him at bobconfer@juno.com.


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This column originally ran in the 20 February 2012 Greater Niagara Newspapers

YOUR HOME IS A BAD INVESTMENT

Common sentiment is that real estate –specifically the home - is one of the best investments that a family can make. For most of the country that’s true. Not here, though. New York is one of the few states in the Union in which real estate is not a wise investment. That’s because, simply put, our property taxes are too high. The onerous amalgamation of local, county, and school taxes strip real estate of any future returns it might have because your payment of these taxes must be considered a part of the investment in your home.

In Niagara County the median home value is $95,800 and the property tax burden on said home is $2,800. Suppose someone buys that home as a starter home and hopes to sell it off in a decade or two. To come out even, based on taxes-paid alone, he would have to sell that home for $123,800 after 10 years or $151,800 after 20. That’s completely impossible in the Buffalo-Niagara region.

Making matters worse, that basic analysis makes two major assumptions. One, taxes won’t rise in every one of those years. As we’ve recently seen, even the tax cap can’t stop them. And, two, the property owner will put absolutely no money into that home for remodeling or repairs. Those unaccounted-for factors – 100% guaranteed to happen – have the lack of a payback on housing set in stone.

This is a uniquely-NY problem. Property taxes in the Empire State are 57% higher than the national average. For every $100 other Americans pay, we pay $157. And that’s the average; let’s look at one of the extremes. I know someone from Tennessee who pays a paltry $660 per year in property taxes for his 2,800-square-foot suburban new-build. In comparison, my coworker who lives in North Tonawanda has a similar home for which he pays $6,800 in taxes annually. Another coworker pays $5,480 on his like-sized abode in Amherst. Think about it: they will have paid $68,000 and $54,800 in property taxes, respectively, after just 10 years. They will never make that up in resale value. Never. But, the man from Tennessee will for sure; what he pays in taxes over 1 decade is even less than what the North Tonawanda resident pays in 1 year. For him, and many other Americans, it makes complete sense to invest in real estate, be it housing or land, because their taxes are so low.

This takes on greater meaning since we’ve all lost faith in the stock market because of the Great Recession and the continued fiscal woes in Europe. As 401(k)s and pensions have plummeted, we’ve all looked for other options to save for our retirements and our heirs, things like hard assets such as gold or real estate. Only in New York State is the latter an even poorer investment than a down market. Main Street, NY is absolutely no better an option than Wall Street, NY. It’s depressing because our homes are the single largest investment that we will ever make in our lifetimes.

Let’s put this into historical perspective. A tea tax - but a pittance - was the straw that broke our colonial backs and jumpstarted the American Revolution. Our property taxes are far more extravagant. Will that someday ignite that same fire of change in New Yorkers? Let’s hope so, and soon. We’ll never be a rich people as long as the status quo is maintained in local and state leadership.

Bob Confer is a Gasport resident and vice president of Confer Plastics Inc. in North Tonawanda. E-mail him at bobconfer@juno.com.

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This column originally ran in the 13 February 2012 Greater Niagara Newspapers

OBAMA IS NOT AN INSOURCER

As an industrialist, I’ve taken an interest in President Barack Obama’s insourcing kick which has occurred over the past few weeks, highlighted by his weekly radio and Internet address on January 14 and a speech delivered in the East Room of the White House a few days earlier (I’m certain that he’ll talk about it during this week’s State of the Union Address, too). By "insourcing," the President refers to a reversal of the outsourcing trend by American manufacturers. Some of them, though few in number, are bringing jobs back to the United States.

Obama, of course, has been quick to take credit for the insourcing, citing his economic policies while ignoring the true reasons behind the shift in these scant few jobs. One reason is capitalistic decision-making based on a wide range of criteria including the continued collapse of the European Union (which causes entrepreneurs to abandon that market and return to a focus on American consumers). Another reason is the ongoing productivity lapses in developing nations such as China which frustrate expansion and retention of overseas factories.

It should be noted that President Obama could be responsible for the some of the insourcing due to one of his tactics. Our exports have become more attractive to foreign nations thanks to the continued weakening of the U.S. dollar, as the unaccountable public-private partnership known as the Federal Reserve caters to Washington’s extravagant spending by printing more money at will, out of the ether.

Regardless of export gains, that’s a dangerous monetary policy. Most of my manufacturing peers agree that Obama’s other economic policies — those having been initiated and those under consideration — are just as dangerous and have inhibited the growth and forward planning of their companies (that is, unless they are in the wind and solar industries, which have been afforded special favor — corporate welfare — by the Obama administration). If anything, the administration has continued to drive production employment away from America and the outsourcing losses far exceed the insourcing gains.

This is more than something anecdotal; there is proof to be found in the numbers. The White House points out that 334,000 manufacturing jobs have been created in the United States over the past two years. While this may be exciting to Big Government and the mainstream media, the stats are far from something that Obama should revel in. The reality is that the manufacturing sector in America supports 2.2 million fewer jobs than it did in November, 2007 just prior to the recession. Manufacturing employment remains at its lowest levels in 70 years.

The reasons behind those haunting numbers — and actual proof that America has become increasingly unattractive to manufacturers — can be found in the statistics provided by both the Manufacturing Institute and the Manufacturers Alliance for Productivity and Innovation (MAPI). They have produced reports which look at the structural costs of doing business in the United States — costs that include factors directly influenced by government intervention in the free markets.

In their 2008 report, produced the year in which Barack Obama was elected to the presidency, it was discovered that American businesses faced a 17.6-percent cost disadvantage versus nine industrialized countries featured in the study, among them Mexico and China, our biggest threats to manufacturing. Fast forward to late 2011 — nearly three years into Obama’s reign — and the most recent study shows that the cost disadvantage grew to 20 percent. Realize that this is not a 2.4-percent decrease in competitiveness; to put it in proper mathematical terms, it’s a 13.6-percent decrease in our competitiveness. A 13.6-percent collapse is nothing for the administration to be proud of and certainly no incentive to insource.

What accounts for a cost structure that so repulses the participants of a global economy?

One factor outlined in the MAPI study is corporate tax rates. It is noted in the report that while the combined federal and state tax rate has remained unchanged in America since 1997, the rest of the super powers in the industrialized world have seen theirs drop at least once in that same time period. The tax advantage for foreign locales is now 8.6 percent more beneficial than that of the United States, placing us second-worst behind Japan among the nations studied. When the study was first launched in 2003, the foreign advantage was “only” 5.6 percent.

Obama has done nothing to correct this. As a matter of fact, he wants to head in the other direction, as made evident by his constant talk of making individuals and corporations pay “their fair share” (which really means “higher taxes”). He has, though, alluded to promoting his insourcing crusade — as fake and contrived as it may be — by extending tax breaks to businesses which bring jobs back to America. That speaks volumes about his lack of leadership and even an elementary understanding of capitalism. By failing to address the destructive nature of our tax structure, he will reward insourcing but still maintain the incentive for outsourcing. If he were to decrease our tax rate overall (rather than selectively doing so to play favorites), he would make outsourcing (and thusly insourcing) a non-issue by preventing the exodus of jobs in the first place.

The report also shows an ongoing loss in the area of employee benefits. It’s 5.7 percent more economically feasible to do business elsewhere when it comes to benefits. The greatest influence on this comes from escalating health insurance costs. To put it into perspective, my company has faced increases in our health care costs of eight to 11 percent in each of the past three years, and most other businesses are in the same boat.

The President claimed he would save the day with ObamaCare. But as the more astute observers of government know, the health care bill will only drive up the costs. We’ve already seen some price increases attributed to it (from pharmaceutical and health equipment levies); however, the most shocking ones will come in 2014 when, among other things, the federal government slaps a fee on all insurers. Where will the insurers get the money to pay that princely sum? Why, from the employers and employees who buy insurance, of course!

The Obama administration is just as much to blame for other factors noted in the report, such as pollution abatement (EPA, anyone?), all of which, when combined, paint a miserable picture for the competitiveness of America, now and into the future.

Obama can’t fix it. It’s not that he doesn’t possess the power to do so: As head of the Executive Branch (and all its agencies) and a wielder of the veto pen, he does have the tools to fix what ails our economy. But he chooses not to. Instead, he has added — and will continue to add — to the bureaucratic structure and cost of the federal government as well as the countless hurdles to advancement of the private sector. Obama is responsible for making our economic environment increasingly unattractive, further destroying the manufacturing base that was once our nation’s greatest economic strength.

Plainly put, Obama is not an insourcer. When you look at what he’s done, he’s a net outsourcer and his legacy will carry that dismal trend far into the future.



Bob Confer is a contributor to The New American. He is the vice-president of Confer Plastics, Inc. and a weekly columnist for the Greater Niagara Newspapers.

This originally appeared in the 23 January 2012 The New American at:

http://www.thenewamerican.com/opinion/950-bob-confer/10625-obama-is-not-an-insourcer

END THE NFL’S BLACKOUT RULE

Long ago, in a much simpler time, ticket sales accounted for the majority of revenues for professional football teams. The business model of the National Football League has changed dramatically since then and now its money is acquired from anywhere and anyone, utilizing a variety of sources that include televison contracts, advertising and licensed apparel. This pervasiveness of the NFL in all forms of media and pop culture has caused gate revenues to constitute just 22% of league revenues, which are approaching $10 billion.

That significant change in marketing, as well as the ongoing expansion of the modes in which we acquire entertainment (cable and satellite TV and the internet), has forced the Federal Communications Commission’s hand in reconsidering the Blackout Rule that it instituted in 1973. As we all know, it was put in place as a way to help the league sell out of its games by almost forcing its local fans into the stands if they had hoped to see the affair. No sellout yields a blackout; it’s that simple. As a result of the NFL’s ascension to our national pastime - and not the FCC rule - the number of blackouts has seen a dramatic drop. What caused 50% of games in the 1970s to be blacked out in their local markets has caused just 8% of all games to be unavailable in recent years.

There were only 16 blackouts during the entire 2011 season. Of course, 3 of them affected Western New Yorkers. The Buffalo Bills were the third most darkened team behind the Cincinnati Bengals and the Tampa Bay Buccaneers. Unlike the other two teams, which maintain some semblance of competitiveness, the Bills find it difficult to fill Ralph Wilson Stadium due to the horrible product put onto the field. The Bills are beloved in Upstate New York, almost to the point of insanity (where else would Zubaz pants be considered high fashion?), but love, no matter how strong, cannot make a fan from the second poorest market in the league shell out $59 for a ticket - plus dozens more dollars for parking and concessions - to see a badly-performing team that hasn’t won 10 games since 1999 and only once this century broke the .500 mark.

The Bills brass don’t mind that you are occasionally inconvenienced by the inability to appreciate their team on the television, even though your allegiance to them is so strong – unlike theirs to you – that you will watch through such sustained misery. They are in favor of the blackout rule because it maintains their status quo. The rule plays perfectly into the plans of a conservatively-run organization that is immensely profitable from mediocrity and finds no incentive to be otherwise. If the ownership doesn’t care to improve the team to the point of being average or moderately-competitive, then it’s obvious that they don’t care about the fans as they should, because any great business should be driven to give the customer the very best product possible.

Bills fans, on the other hand, would be well-served by the end of the blackout rule. Immediately, they’d be able to watch 3 to 5 more games a year on the television, further strengthening their love-hate relationship with the red-white-and-blue. Ultimately, though, they would be rewarded with a stronger, better team and perchance a playoff season or a string of playoff seasons as the organization tried to realize the stadium’s potential. If the blackout rule were dropped, the Bills might actually have to rely on a winning team, rather than the crutch of a federal rule, to fill the stadium. They’d have to think big and probably take a temporary reduction in profit to make on-field success occur, things the Buffalo Bills seem incapable of in their current state.

If you want to see change on the field and make your voice heard about the nefarious blackout rule, there’s less than a week remaining to contact the FCC about it; the deadline is February 13. You can file your comments electronically at http://fjallfoss.fcc.gov/ecfs2/ or you can mail them to FCC Headquarters, 445 12th St., SW, Room TW-A325, Washington, DC 20554. You must refer to “MB Docket No. 12-3” as well as your name and address on all correspondence and if you chose postal mail, you must submit your original and a photocopy.




Bob Confer is a Gasport resident and vice president of Confer Plastics Inc. in North Tonawanda. E-mail him at bobconfer@juno.com.



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This column originally ran in the 06 February 2012 Greater Niagara Newspapers