POLICY HAS REPERCUSSIONS

By Gary Kaltbaum

In a nutshell, in one glance, we are able to see the rewards of good policy and the repercussions of bad policy.

I was doing my usual scanning of the news and right about the same time, I found two reports with two different outcomes. Those that have listened to the radio show or watched me on tv, know I have been preaching pro-growth policies forever. These policies include lower taxes, less regulations and simply put, getting government out of the way where they shouldn’t be. So:

Tim Horton franchises, owned by children of the founders reduced employee benefits to offset a MANDATED minimum wage hike. Because of these mandated costs to business, employees will have to pay at least half of the health and dental benefits and lose their paid breaks. According to the franchises, the move will help offset Ontario’s $2.40 jump in hourly minimum wage They went on to say that the cutback in benefits and wages at their two locations, which came into effect Jan. 1, follow the rise in Ontario’s minimum wage from $11.60 an hour to $14 this week. They also wrote that the changes come in anticipation of another $1 bump at the start of 2019. The owners also pointed to “the lack of assistance and financial help from our head office and government” in the letter and said their decision follows “intense discussions with management and numerous small business owners in the area and other franchise owners.”

Around the same time I read about this, I found this:

Visa said it is raising its match on employees’ 401 (k) contributions in response to tax reform. The company said it will increase its contribution to 10% of base salary. “Tax reform in the United States will strengthen Visa’s competitive position globally and create new opportunities for Visa to invest in our business,” the company said in a statement. “With the additional 401(k) match, Visa’s U.S. employees will enjoy a sustained benefit, consistent with the role they will play in building our business.” The company said it will increase its 401(k) contribution to 10 percent of base salary. In other words, an employee who earns $100,000 a year can set aside $5,000 and the company will contribute $10,000. Visa’s longstanding policy has been to contribute $2 for every $1 an employee contributes. Employees can now contribute up to 5 percent of base pay, up from 3 percent.

So one government dictates, mandates, forces companies to pay something that maybe they are not ready to pay. What do they do? Like any smart businesses, they react.  They usually let go of people, drop hours, drop benefits, raise prices and in some cases, move further into technology to cut amount of employees.

The other does the opposite. It lowers the burden. It lowers the business’ cost. It unleashes more profits. What happens? What do they do? They give back. They give back to employees. They expand. They invest. They grow.

It was and wasn’t amazing to see these two news items side by side. You would think the “socialist” side would recognize but solidifying power is more important than recognizing what really drives the economy. It is the millions of workers that work their asses off every day to better for themselves and their family…not the bureaucracy.

1 reply
  1. anti semite says:

    The rich have taken soo… much of the economic pie, that there is simply not enough pie to go around for the rest of us.
    So, gov’t steps in, to “mandate” that which business cannot afford to pay.
    .
    Business hands out a bigger slice of pie, ….but from the shadows, they cut the crust off, and add less filling….
    .
    Q: Why cant business afford more pie?
    A: Because the wealth which …was…. in the hands of the working class, and being spent into the economy,,,,( which drove wages and benefits), ..is now in the hands of the rich, …driving the stock market higher, and higher, and higher.

    Higher stock market, ..rising price of luxury houses, luxury yachts, luxury vacations……luxury this, ….luxury that…

    And etc.
    .

    Simple economics:
    If the pie is getting smaller, every body feeding off the pie gets a smaller slice.

    Er… aah…. except for the rich, who have armed guards, and bribed politicians, who then act to ensure that slice of the pie held by the rich gets ever bigger……. at the expense of the rest of us.
    .
    .
    Yoda, the highly intelligent.

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