The Labor Commission, increasing the cost of business

The Nevada Labor Commission was created to protect the worker against the abuses of business in regards to wages, whether for non-payment of wages to minimum and prevailing wage issues. What they have become is a financial burden to many businesses. While I’m all for punishing companies that violate law, there are so many laws, rules and regulations that have to be followed that it can cost a small company tens of thousands of dollars to try and comply. Most of the laws directly affect the cost of doing business, like minimum wage laws and prevailing wage laws. There are many studies that have been conducted that show how minimum wage laws increase unemployment, especially among the unskilled and low skilled workers. Prevailing wage rates or Davis-Bacon wages are just over inflated minimum wage rates. I can employ an unskilled laborer to run a broom and shovel for a respectable starting wage, but when prevailing wage rates kick in, that unskilled broom operator makes more than three times that amount, currently $44.04 in Clark County and when you add the burden to the company that unskilled employee is costing the company over $55.00 per hour. But that’s not the point of this article. This article is going to look at one indirect cost the Labor Commission imposes on business. Unlike any other proceeding, the burden of proof lies with the claimant or the accuser, but in the eyes of the Labor Commission, the defendant is guilty until proven innocent. The burden of proof lies with the business to prove their innocence, regardless of the claim’s validity. The cost to a business to defend against a claim can cost into the hundreds of thousands. These costs can cripple small businesses and force them out of business. I have personnel experience in one case that took over five years to resolve and the only reason it is not ongoing was because it was cheaper to make an offer to settle than to defend the claim. The administrative costs to the company for the research, the written responses, the hearings and investigations over the five years have nearly exceeded the cost of the original claim and that doesn’t include any legal fees. What has to be decided by the company, regardless of being right or wrong, the associated costs of defending weighed against the cost of settlement. In the case mentioned above, the company was 100% right and had proof to prove their innocence from the fraudulent claim and 99% sure the case would be decided in our favor. But is the cost to be right worth the expense? Sadly, in most cases the answer is no. It does not matter that we had signed employment contracts, written polices and documented correspondence; that was not enough evidence. We provided financial records, job records and reports and that was not enough for the investigator. So after five years of meetings and providing mountains of evidence supporting our claim, it was cheaper to offer a settlement. Please see here for links to sources.

Decline of western education

A study done ranking the education systems of the 24 most developed countries in the world found the United States ranked 18th. Topping the survey was South Korea and Japan; the United States did finish above such countries as Spain, Portugal and Germany. You would expect better, especially when you hear that education spending in the United States is higher than all of those other countries. The United States spends the most on education and can barely crack the top 20, it’s even worse when there is only 24 countries in the study. How far have we fallen? If you look at students entering college, a greater number now require remedial classes before they can take college level courses. This shows more than anything else how our education system is failing and by the amount of money we are spending per pupil, we should have the best education system in the world. There are several reasons why education in America is in the decline, not only since the creation of the Department of Education, but since the federal government has gotten involved in the country’s education. It’s not all the fault of the federal government; we need to look at the unions as well. Unions have proven that they are more interested in membership numbers and protecting their teachers than educating children. When unions are more concerned with automatic due deductions, political contributions and promoting the status quo than keeping qualified teachers, accountability to quality education and shielding substandard performance then it’s no surprise that our education is failing it’s students and society in general. Besides a lack of accountability, the federal government creates a problem with laws like No Child Left Behind and Race to the Top, which try to group all students in all states into one category, a one size fits all approach. Money may be an issue although there have been no studies that show more spending equals better results, if that was the case, then we could look at all the money wasted in the education. In Nevada it’s even worse, Nevada ranks last in graduation rates while ranking among the top in per pupil spending. A study done in 2008 listed Nevada last in the nation with an average graduation rate below 50%. The Nevada education bureaucracy claims that those stats are incorrect and their own study showed a graduation rate of barely over 60%, better, but still not acceptable. When we hear about the need for education reform the one thing that always comes up is to increase spending. The need for reform has never been greater, but we need real reform. Lots of types of reform have been tried and most have failed. The reason most of the reforms have failed is any attempt to change the status quo has been met with serious obstructions, not only from the education bureaucracy but from the unions as well. Some school districts have actually lowered their academic standards so the schools will meet federal standards for school improvement. In the misguided thought that increased funding will increase school performance, to make up for decreased budgets, schools have cut programs that they consider non-essential, programs such as music and art. Because of the failing public education system, we have seen a rise in home-schooling, public charter schools and a voucher system, which have all been under attack by the educational power structure. To reform education, states should look to what is happening in Florida. Florida has implemented several reforms that have shown student improvement in areas of reading and math; where Florida students have outpaced the national average. The reforms include more school and student accountability, improving teacher quality and school choice. School choice allows students to attend public charter schools or even private schools with a voucher system. Governor Sandoval signed an education reform package to try and help raise the Silver State out of the basement. These reforms include changing the way teachers are evaluated, making it easier to terminate substandard teachers and create a board to oversee charter schools. While these reforms may be a good start, they are far from being enough to turn around our failing education system. We need to hold teachers, administration, parents and students accountable for their performance. We need to hold the schools accountable and we need to make student performance a priority. Please see my examiner article here for links to sources.

Higher priced education

One of the debates in Congress this year is the mounting student loan debt, estimated at nearly $1 trillion. The Occupy crowd and President Obama have even suggested debt forgiveness as a way to handle this problem. This proposal is similar to the bank bailouts, the auto bailouts, the stimulus package and the housing meltdown which means the taxpayer will be paying for students that attended college. Why has this debt become such an issue? One reason is the skyrocketing cost of college, both public and private institutions have seen their tuition explode. What used to cost a couple thousand dollars a year is now over $10,000 per year. Price increases around the country range from around 8% to as much as 300%. Has our higher education system improved their product that much? Is there increased demand for these college educated adults? Sadly, the answer to both is no. College graduates get to look forward to a dismal job market, high unemployment and if anything they are getting a worse education now than in the 1970’s. One reason is there is an increase demand for a college education; more and more students are seeking additional schooling or training in the misguided hopes that it will increase their earning potential. A college degree used to hold some weight, but with the watering down of education and the explosion of degrees in areas that have no real world application means the demand for graduates has lots its weight. The main reason for the skyrocketing cost of college is the government. The government is trying to push everyone into college and the lending institutions are more than happy to oblige as long as the government continues to guarantee these loans via the tax payer. Artificially low interest rates give the illusion of a surplus of money available to loan and with everyone pushing anyone and everyone into higher education the cost is artificially raised as more and more people are herded into massive debt. Does any of that sound familiar? It should, as the old saying goes, “those who don’t learn from history are doomed to repeat it.” A few years back, with low interest rates, courtesy of the Federal Reserve, the government was pushing everyone into home ownership, whether they could afford it or not. What was the result? Skyrocketing housing costs as the demand for homes rose. Remember what happened? A little thing called the housing meltdown, which bubble burst. Is the education bubble the next one to go pop and leave the tax payer on the hook to pay that bill as well? Check my examiner article for links here.