A Democratic Congressman in Florida wants to force employers to pay for vacations!
Having just concluded our three week east cost trip in Central Florida we stopped at a Dunkin’ Donut shop to pick up some of those high calorie, but great tasting, doughnuts before our flight back to LAX. We made that selection for two reasons. First. There are no Dunkin’ Donut shops in CA. Second. An editorial that I found in the Orlando Sentinel last week entitled “Reason takes a holiday.”
Every elected official should be commended for looking out for his or her district. In this case we read that tourism in Orlando was in the toilet. Having flown to Orlando many time in the past decade I could not believe that we did not have to stand in any long lines as we went through the TSA checkpoint before boarding our flight home.
Let me address the suggestion of “first term House Democrat Alan Grayson of Orlando” who is proposing legislation that would compel every employer “provide paid vacations for their employees.” Note: The Sentinel confirms that “three-quarters of all U. S. workers already get paid vacations.”
“Mr Grayson’s office said his proposal would ‘help rejuvenate the American economy’ by improving productivity and generating more business for U.S. travel and tourism industries once everyone has so much free time on their hands.”
Let us think about his proposal. As stated above I read that Orlando’s tourism has dropped substantially due to the recession and, Representative Grayson represents Orlando. So he proposes some self serving legislation that if passed would impact every other state in the nation. The editorial goes on to state that “In making the case for his proposal, Mr. Grayson’s office linked the lack of paid vacation law in the United states to higher anxiety and depression, lower life expectancy–even a falling dollar. “We’re still wondering why tooth decay and high humidity weren’t included.”
His office has”pointed out that the United States in the only industrialized country without a minimum annual -leave statute. The Sentinel responds by stating that “You might find that a convincing argument if you believe America should take its economic policy cues from Europe and Asia–including communist China, one of the countries cited by the congressman for his mandatory paid vacations.”
Representative Grayson doesn’t understand the free enterprise system.
In the early 80’s, prior to their outsourcing to Asia, our corporation conducted business with several major electronic firms in Silicon Valley. We witnessed as these firms would hire and train technical staff only to lose them to competitors in Sunnyvale, Santa Clara and San Jose, CA who offered better wage and benefit packages including gymnasiums for their employees to use on their lunch hours. Some would host Friday afternoon “happy hours” just to keep their employees from jumping ship.
My point is that the “free market,” and not any state or federal mandate, should establish what fringe benefits employers provide for their employees with full knowledge that any “benefits” comes at a cost that must be passed onto the consumer.
The Sentinel states “What’s next? Requiring companies to provide coffee and doughnuts? ..We’re all for regulations that address basic health and safety for workers and guarantee them a minimum wage. But government would be meddling way to deep by dictating employers’ vacation policies.”
Juice readers. Where do we draw the line with government meddling in the private sector?
As I try to catch up with the news I recall commentary that the government will establish pay scales for firms accepting TARP funds.
Questions. Did the TARP recipients have that knowledge prior to accepting said funds?
Should big brother micromanage these struggling private sector firms?
Larry, Good to see you back!
So “the “free market” should establish what fringe benefits employers provide for their employees” should mean getting rid of health care tax deductions that burden other taxpayers.
Hi Larry M.
How does corporate provision of health care benefits burden other taxpayers? Unless we are forced to increase the pricing of our goods and services due to the high insurance costs involved I need to have you clarify your position.
Using your thought process do you support elimination of the federal deduction for everyone’s mortgage interest payment?
How about elimination of charitable contributions, another major IRS write off.
Are you proposing we rewrite the massive tax code?
That would make for an interesting blogger debate.
Someone just sent me yesterday’s NY Times Business Section which addresses my closing TARP comments. Following is a “Readers Digest” style recap:
U.S. to Propose Wider Oversight of Compensation
By LOUISE STORY and ERIC DASH
Published: June 7, 2009
The Obama administration plans to require banks and corporations that have received two rounds of federal bailouts to submit any major executive pay changes for approval by a new federal official who will monitor compensation, according to two government officials.
Times Topics: Executive Pay | Kenneth R. Feinberg
The proposal is part of a broad set of regulations on executive compensation expected to be announced by the administration as early as this week. Some of the rules are required by legislation enacted in the wake of the worst financial crisis since the Great Depression, and they would apply only to companies that received taxpayer money.
Others, which are being described as broad principles, would set standards that the government would like the entire financial industry to observe as banks and other companies compensate their highest-paid executives, though it is not clear how stringent regulators will make them.
Citigroup, Bank of America, the American International Group, General Motors and its finance arm, GMAC, which all received two taxpayer infusions, will face the strictest scrutiny from the new federal official charged with vetting compensation, Kenneth R. Feinberg.
In the past, banks had free rein to determine the base salary and bonuses they awarded their employees. When the economy was riding high, bonuses for top Wall Street executives and traders soared to tens of millions of dollars. Critics say the bonuses often encouraged excessive risk-taking since star bankers could walk away with more money even if the bets they took failed to pay off.
But executive pay has been a delicate issue for the Obama administration and Congress, particularly since it was revealed that A.I.G., the recipient of at least $180 billion in taxpayer money, was handing out $165 million in bonuses. The episode left officials struggling with just how to balance public anger with compensation rules that would not put the industry at a competitive disadvantage or derail other economic recovery initiatives.
With the government handing out billions in bailouts, Congress passed legislation banning all companies that received support from the Troubled Asset Relief Program, or TARP, from paying their top 25 executives bonuses greater than a third of their salary, though they were not subject to specific salary cap.
Banks that received money from the relief program must also curb outsize severance packages, and pull back bonuses that were based on fraudulent or misstated results.
Larry G,
Companies paying for employee health insurance get to write payments off as expenses, probably legitimate but they could be classified as a gift as they aren’t reported as employee income; with no taxes paid on this income other taxpayers have to pay more in taxes to make up for the lost revenue.
I support elimination of the “nannie state” starting with the elimination of health care & mortage interest – the two biggest deductions that unfairly burden taxpayers who rent and pay for their own health care.
Larry M.
Based on your bottom line, do you have any data that confirms renters not getting health care insurance coverage from their employers?
As we had a Defined Benefit retirement plan I am not up to speed on 401K’s. That said when employers kick in some of their employee savings, for which they surely get a write off, does that matching employer money appear on the tax returns of the recipients?
My point is that the private sector has several tools in their tool box to reward or retain their employees. Health care coverage being only one example just as paid vacations, sick time or paid family leave.
Some corporations offer profit sharing as an inducement for improved productivity. The list is as long as you wish to be creative. My point is that big brother should get out of the way and focus on their main role namely providing for our public safety.
We interviewed Russians who were grateful to finally be freed from their Socialist/Communist system of government when the USSR collapsed.
I’ll take our free enterprise system of “risk-reward” any day of the week.
Larry G,
“our free enterprise system” is only an economic text book model that has never existed in the real world. And “risk-reward” is another dream theory as rewards go to those who plan to minimize risks.
Larry M.
“Risk-reward” is a valid concept. Not boasting but I can speak from personal experience. We started as a DBA with an ad in a local newspaper.
It was not easy not getting a weekly or monthy paycheck. That’s the risk aspect you need to consider. Our original business partner bailed on us in that he couldn’t make it without that financial guarantee.
Within two years we incorporated as a CA “C” corporation. An investment banker that we spoke to, in a prior endeavor, told us that 8 out of 10 businesses fail in the first year. That did not deter us from working long, hard hours and, along with breaks along the way, to build a successful corporation.
Our corporate story proves that the free market can provide a healthy ROI if you are willing to take the risk.