Tuesday, September 12, 2017

Casar uses service industry as human shields for terrible idea

"Beware of false prophets, who come to you in sheep’s clothing, but inwardly they are ravenous wolves."
Matthew 7:15

No thank you:
Austin City Council Member Greg Casar helped kick off a campaign Monday to get an ordinance passed requiring all employers in the city to provide paid sick leave to their workers.

“Almost 40 percent of Austin’s workforce is not allowed to earn paid sick days by their employers,” Casar said in a news conference at the Workers Defense Project on Manor Road.

“If you are a service sector worker or a construction worker, it’s more likely than not you don’t have paid sick days,” he said. “But this isn’t just low-wage workers. Twenty percent of middle-income Austinites are not allowed to earn paid sick days by their employers.”

About 223,000 Austin workers (37 percent of the total workforce) do not receive paid sick days, according to figures from Work Strong Austin, a coalition of community organizations that launched the campaign Monday.

Casar said he will introduce a resolution at the Sept. 28 City Council meeting and hopes to work with the community, businesses and the rest of the council to get an ordinance passed by the end of February. It would apply to part-time and full-time workers, he said.
Where to begin?!?

Start with the fact that Casar's proposal would lead to fewer jobs and lower cash wages for the jobs that remain.   That's what happens when you mandate higher benefits while the employer's revenues stay the same.  We also wouldn't be surprised if Casar's proposal accelerated the move from 1040's to 1099's.

When you mandate higher costs for something, you shouldn't be surprised when you get less of it;  when Greg Casar wants to mandate higher minimum benefits for each new employee hired, you shouldn't be surprised when a lot fewer people are hired.

Beyond the generally anti-employment nature of Casar's proposal, move on to the fact that for the jobs that remain it would stack the deck in favor of large, established, employers.  That's because large, established companies are more capable of absorbing cost mandates than their smaller, newer, competitors.  Casar's proposal is as anti-startup as it gets.

[Note: Because Casar's proposal would stack the deck in favor of large employers, we wouldn't be surprised if the Chamber ends up supporting it; that's what we would make of any potential "business" support.]

[Note II: We also wouldn't be surprised if Casar's proposal resulted in a new round of wage waivers for big employers.]

Consider some of the Food and Beverage companies currently achieving national prominence that began as Austin-based startups in the past few decades:
  • Amy's Ice Cream
  • Pluckers
  • Chilantro
  • Peached Tortilla
  • Deep Eddy/Tito's/Dripping Springs vodka.
  • Every craft brewery that's sprung up over the past few years.
  • We could continue naming local brands, but we think you get the point.
None of the companies we just listed would have survived their early years if the type of mandate Greg Casar now proposes would have been in place 10 or 20 years ago.  At this point, most of those companies pay higher wages and offer more benefits than the industry average.  But none of those companies could have done so had they been forced to absorb those costs in their early years.

Casar wants to frame this as a fight against McDonalds.  But the truth is that McDonalds is going to be fine either way (and they might even benefit from his scheme).  The reality is that Casar's proposal is a declaration of war against the next Amy's, the next Pluckers, and the next Chilantro.

Finally, there's the personally insulting nature of this entire proposal.  It's not a secret that this author works in the service industry, and we will simply point out that we are perfectly capable of negotiating with our various employers without 'help' from grandstanding politicians.  If anything, by making it more difficult to find another job, the afore mentioned grandstanding politicians decrease our leverage with various employers.

[Note: While we're on the subject of how #atxcouncil mandates have effected us personally, don't tempt us to tell about our experiences navigating the stupid little "ban the box" ordinance they passed last year.]

We understand that Casar et. al. have cherry picked sympathetic examples to justify their position.  That doesn't change the fact that the best way to produce favorable working conditions is to have a robust market with lots of competing employers.  Mandating higher employment costs doesn't help anyone.

Bottom Line: Casar's proposal is kryptonite for local employment.  It would be bad for everyone, but it would be even worse for early stage startups.  Nothing good can come from this mandate.

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