RI unemployment is up. Massachusetts unemployment is down. Why is RI trending in the opposite direction? Why did RI lose1,500 jobs? In our last Alert, we brought you our view of the Governor's proposed budget, which simply included more spending and more borrowing, no significant policy change to address these critical economic issues. In this Alert we look at what legislation is holding us back from breaking free of the status quo mindset.
Jobs? Who Needs Them?
So what have our legislators put forward as a way to address job creation? House bill H 7055 proposes that what ails RI can be remedied by undermining an important feature of the U.S. employment landscape by creating more regulation and restrictions on employers. Representative Shekarchi has proposed that there be restrictions on the employment “at-will” rule, a basic premise of a free market economy. At-will means that an employer can terminate an employee at any time for any reason, except an illegal one, (common-law and statutory exceptions to the at-will rule exist) or for no reason without incurring legal liability. Likewise, an employee is free to leave a job at any time for any or no reason with no adverse legal consequences
We reached out to Rep. Shekarchi who introduced this legislation at the request of a constituent. He indicated that he does not believe that this bill will go anywhere. Regardless, too many Rode Islanders are underemployed or unemployed for so long that they are no longer officially counted among the “unemployed”. We need our legislators to stop gumming up the hopper and work together to repeal the existing onerous rules and regulations that play a pivotal role in keeping our economy down.
H 7055 is an enormous wrench in the cog of the engine that creates jobs.
Our educated guess is that there are no businesses that would see this legislation as anything other than an anti - business piece of legislation. If you own or know someone who owns a business, please write to Rep. Shekarchi. He's looking forward to your feedback.
Meanwhile, the answer to job loss in RI from Representatives Bennett, Hull, Shekarchi, Slater and McNamara is yet another state mandate increasing the minimum wage to $10 an hour.
H 7194 does just that while H 7056 submitted by Representatives McLaughlin, Canario and again, McNamara, raises it to $9 an hour. Given that RI's unemployment rate is now tops in the country, this type of legislation would seem counterintuitive. Perhaps the legislative sponsors will take their time to speak with a variety of businesses across RI and ask those folks what impact an increased minimum wage would have on their hiring practices and payroll.
The RI Center for Freedom and Prosperity reviewed the Federal Census data and found that the bulk of the jobs paying near minimum wage or less are held by white, non Hispanic young people, working to provide supplemental income in a household whose average income is $61,000. Additionally, their model indicates that if the minimum wage is increased to $10, RI could lose as many as 3,500 jobs. At a time when it is imperative that state leadership look for bold ideas to significantly increase the number of jobs, can we afford to mandate an increase in any business owner's payroll? Think about it. Healthcare is now mandated and the cost continues to rise, the cost of electricity for businesses recently increased 23 percent, and now, some of the taxpayers' representatives want to increase the cost of payroll!
The rhetoric of the focus being on job creation is not aligned with the legislation that is being submitted. If this renewed popularity of minimum wage legislation is about talking points than it is evident that they are mirroring the talking points coming out of DC.
In Other Legislative News.
The Sakonnet toll dilemma is still on the table. Originally, a definitive answer was needed by April 1st. Now it looks like it will be delayed and it is very likely that any plan to halt this toll will come in the form of increased taxes and fees. All hands will need to be on deck to defeat this very unfair taxation that is poised to fall on the shoulders of just a small segment of RI's population, expected to foot the entire state's transportation maintenance bill. The group spearheading the opposition of this toll (STOP) has brought witness after witness into committee hearings to explain how devastating this toll will be on local businesses. So will increased taxes and fees on all Rhode Islanders.
Some open minded legislators are looking at a dramatic new policy change - significantly reducing or eliminating the sales tax.The commission that was formed to consider the idea includes outside groups like RIPEC, the Providence Chamber of Commerce and the "Economic Institute for Progress". The premise of the bold initiative to eliminate the sales tax is two-fold. First, RI is ranked last in virtually every economic indicator, and, second, many years of nibbling at the edges isn't "moving the needle" of RI's economy.
What is so disconcerting is the mindset of some of the participants on the commission. They seem to be more concerned with maintaining the status quo, e.g. preserve all tax revenue. Modeling changes to revenue flow and the potential outcomes is not an exact science and many are skeptical of the numbers produced, but it is some of the responses that reinforce the difficulty to do things differently in RI. The reaction to this bold idea is not "how can we look at the $8.5 billion budget differently and align our spending in accordance with our stated priorities - job creation and a significantly improved economy - but rather, as the Providence Chamber of Commerce stated, don't touch the revenue stream. Similarly, the RIPEC representative's response was, we should be competitive with Massachusetts, we should look at business input taxes, we should look at business regulation, we should change the sales tax base definition, we should look at taxes on energy. Basically keep nibbling. If you must touch the revenue stream, only impact it in a very small way so it doesn't force the state to make significant changes in the way RI spends.
Back to the Future: We Testified Last Year.
Drivers' licenses for illegal immigrants will open this week's hearings. Submitted on behalf of Governor Chafee, Representatives Williams, Valencia, Slater and Diaz are sponsoring legislation that provides this privilege to illegal immigrants. Gubernatorial candidates Treasurer Gina Raimondo and Mayor Angel Taveras support this move. We think that Clay Pell does also.
Public labor unions continue to push their special interest agenda proposing that, in certain circumstances, contracts should be extended from 3 to 5 years allowing unaffordable and unsustainable benefits to be retained as long as possible.
The following week will be spent hearing proposed legislation that will attempt to dismantle much of the substantive education reform, developed over the past 5 years and recently implemented by RIDE.
Please join us in writing to the committee chairperson or consider testifying along side of us to oppose legislation that only serves to hurt RI's path to economic recovery.
LEGISLATIVE BILLS THIS WEEK: 2/10/14 - 2/14/14
NEXT WEEK: 2/17/14 - 2/21/14
GREEN = SUPPORT RED = OPPOSE
TUE FEB 11
Room 101, Rise (4:30)
H 7262 Provide drivers' licenses to illegal aliens
Room 205, Rise (4:30)
H 7025 Allow highway workers to collect overtime even when they have sick time within that period.
H 7026 Move teachers' notification date to June 1.
H 7193 Move teachers' notification date to May 15, but maintain tenure in rehiring.
WED FEB 12
Room 212, Rise (4:30)
S 2106/2107/2108 Expand municipal employees, police and firefighters contracts from 3 to 5 years in certain instances.
S 2246 Expand teacher contracts from 3 to 5 years in certain instances. .
NEXT WEEK: 2/17/14 - 2/21/14
WED FEB 26
Room 101, Rise (4:30)
All of the following pieces of legislation are stepping stones to dismantling everything RI's Commissioner Gist has implemented as a result of Race to the Top and may jeopardize the $75 million awarded the state.
H 7095 Delay implementation of standardized testing.
H 7096 Reduce frequency of teacher evaluations.
H 7146 Delay implementation of standardized testing, prohibit use as a graduation requirement, prohibit use to evaluate teachers or determine rates of pay, promotions or terminations.
H 7327 Resolution to delay standardized testing used as a graduation requirement.