OPINION:
I’m a month late on a New Year’s advice column but I offer some ideas this week that are timeless and hopefully helpful.
Basic Economics: Father Guido Sarducci of “Saturday Night Live” fame counseled in his Five Minute University that the only thing you needed to know about economics is “supply and demand” (Google it on YouTube). That simplistic lesson is more seriously reflected in the concepts of labor market elasticities, immigration and minimum wages.
In 2017, you can watch the Father’s wisdom play out as historically high (adjusted for inflation) minimum wage rates result in a shrinking supply of “affordable” employees. Those are the ones who have the basic skills to match those new mandated rates. That low supply of affordable talent is accelerating a new demand for self-service technology. While more than 1,500 kids are dropping out of school every day, we are losing our default option to employ them in the entry-level job market. The unintended consequence can be witnessed in rising crime rates.
Today we pump our own gas, scan our own groceries, and order online without the need for sales clerks. Remember the rant, “No one who works hard and plays by the rules should have to live in poverty.” Here’s another: “One of the ’rules’ is you need appropriate skills to justify the wage rate.”
Charitable Giving: In 2016 we were surprised by organizations with veterans, cancer or animal welfare in their name or mission. Too often brand names, including Wounded Warrior, Humane Society of the United States or the American Cancer Society, are spending a woefully small amount of money as their donors intended. And some of the charity “watchdogs” are more like lapdogs, including the BBB Wise Giving Alliance, which takes money from some of the charities it rates.
If a charity doesn’t get an “A” from a good rating agency, send your money to one that does. Spend $50 for an online subscription to Charity Watch (not Charity Navigator) for ratings of the major charities. It’s revealing and will save you from being ripped off by slick marketing.
Political Decisions: In 2017 there will be few elections for state and federal office. That gives you time to do your homework for the 2018 cycle. Log onto the Federal Election Commission website. Be especially mindful of Big Union money being used to box Democrat senators into supporting high taxes and more spending of money we don’t have. While that may be a legitimate point of view for some, what does that have to do with collective bargaining over wages and working conditions? Those millions could be used to create better training programs and private-sector job opportunities.
Rather than supporting candidates this year, you can support legislation like the Employee Rights Act that would free union members from paying to support left-wing activist groups. Unions sent 99 percent of their $530 million political advocacy budget between 2012 and 2015 to Democrats and liberal special-interest groups despite the fact that 40 percent of union households vote Republican. (That money was outside of their PAC candidate support.)
Government Debt: Speaking of spending OPM (other people’s money), my 2017 list of advice includes addressing our collective amnesia on the federal debt. The rant that we are bankrupting the country by spending far more money than we tax ourselves falls mostly on deaf ears.
Outside of a few wise men and women with calculators and an ability to see over the horizon, we are playing out the largest version of Aesop’s ant and grasshopper fable (if you skipped kindergarten, look it up). Today we are on our way to a 20 trillion-dollar debt. Do you care? Do you know how much bigger a trillion is than a million? A million seconds elapse in 12 days. A trillion seconds? More than 30,000 years. Tell someone. Anyone.
We are sending nearly $1 billion a day to foreign and domestic lenders for interest payments on those trillions in debt. The Congressional Budget Office estimates that this payment will rise to more than $2 billion a day and make up 14 percent of the federal budget in coming years as historically low interest rates tick up just a couple of percent. The results will not be pretty. I don’t anticipate Venezuela’s or Zimbabwe’s three- or four-digit inflation rates, but there will be a lot of blood on the floor if we keep acting like grasshoppers.
Have a happy and smarter New Year.
• Richard Berman is the president of Berman and Company, a public affairs firm in Washington, D.C.
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