Representing One Side of the Labor Market

November 24, 2015

Mr. Tony Iriti – Economic Development Director for the Hancock County Alliance –  made a request for local government’s help to offset a local “Worker Shortage”.   I found this interesting on many levels.

I understand many in business feel that if government would only get out of way the economy would thrive.  In this case at least, Mr. Iriti is asking for a government solution and government funds to resolve a market problem.

This brings me to the function of a market.  Mr. Iriti seems to be representing only one side on the market.  Mr. Iriti fails to understand or acknowledge that when it is harder for companies to find workers that means on the other side of the equation workers are finding jobs more easily.

Whenever a business makes the statement that it is unable to find workers, in my mind , I always add the phrase “at the wages, benefits and worker conditions that I am providing.”

As a labor market  tightens, workers have more choice where to sell their labor. If the market forces business to raise wages and benefits to attract a workforce than this is a good thing.  Maybe the market is finally addressing the gross income inequality that this nation is facing.

As wages for low income workers rise they will become less dependent on government programs; like food stamps.  That is good for the whole community.

Our ultimate goal in managing our local economy should not be growth; it should be promoting broad-base middle-class prosperity.

If a business is having issues finding workers then they need to look at what they are offering in the market place.  To business I say; get out there and compete.  Have faith in the market, let the market work.


Findlay’s Income Tax: Unsustainable and Anti-growth

October 16, 2012

Demographics, the Decline of the Middle Class and the Wage (Income) Tax

In the run up to the November election for issue #3, the City of Findlay’s request to make the quarter percent temporary income tax permanent (for a total rate of 1.25%) has been hotly contested.  The debate over the tax renewal largely revolved around the question of whether Findlay has a spending problem or a revenue problem.  After a two hour meeting with the City of Findlay Auditor Jim Staschiak II, I discovered that the City of Findlay has a demographic problem.  This demographic problem could be systemic and long term.

In an effort to explain Findlay’s financial position, Mr. Stashciak produced a graph he named “What’s the Employment Trend?” that illustrates that the number of employed individuals in Hancock County dipped in 1999 and has remained flat ever since, while total population continued a slow but steady rise.

Our population is aging, which is not really big news.  But, when you add in other demographic and economic factors and you understand how the City Income Tax really works, we may find that the City Income Tax cannot sustain the City of Findlay’s operations or capital improvements.

Let’s start with the City Income Tax.  First, the City income Tax is really a wage tax.  The income tax does not tax investment income, pensions or social security income.  And while the city income tax does tax businesses, the revenue that the City of Findlay receives from businesses is just a small percentage of revenue collected from the income tax.  This disparity between what businesses pay and wage earners pay means that workers, in effect, pay the city tax for the services they use and for the businesses where they work.

The second thing we need to know is that with the elimination of other taxes like the tangible property tax and the estate tax and the cut backs in state revenue sharing, the city wage tax has become the primary source of city financing.

So, we already know that our population is aging which means that fewer people are directly supporting the finances of the city.  But a key number that I do not have is the per capita wage tax receipts.

With fewer workers supporting a larger population we are already starting in a hole.  But what if those workers are, on average, making less money?  Given the transition we have seen in Findlay of manufacturing jobs to the service industries and knowing that at least one major manufacturer in Findlay has a two-tier wage system, average wages could very well be in decline.  This combination of aging population and a workforce with a declining income or income that is not keeping up with inflation could spell real trouble for the City of Findlay.

If my hypothesis is right, the per capita wage tax receipts are in fact declining, that would mean the City of Findlay will be in a constant battle to match revenues with services.  It would also mean the traditional way of fixing a city’s flagging finances through growth could, in fact, make matters worse.

If we add businesses or build out subdivisions in Findlay that attract residents and workers that earn less and therefore pay less than our current per capita tax receipts, we would only be dragging down the average, making it harder for the City of Findlay to maintain its current level of services and provide service to support the growth.

We need to put some real math behind this issue.  We may find that the current tax base for the City of Findlay (and other cities in Ohio) that relies on a wage tax is unsustainable and anti-growth.

To find the graph referred to above and other information about the City of Findlay’s finances see the Auditor’s webpage: http://www.ci.findlay.oh.us/?id=57


Commissioner to Restrict First Amendment Rights

December 30, 2011

In terms of the use of public electricity, the county needs to set out a clear policy that is fairly applied to all groups regardless of their politics and purpose. If Commissioner Ingold is concerned that the county is being taken advantage of over the use of electricity, maybe a simple conversation with the Occupy Findlay group could have resolved that issue.

As far as placing restrictions on a citizen’s right to protest, Commissioner Ingold’s initiative seems driven more by his personal feelings about the Occupy Findlay groups politics and methods than any legitimate concern for safety or the rights of other groups wishing to use Dorney Plaza. The idea that there is a shortage of space in Dorney Plaza for public use is ridiculous on its face value.

Commissioner Ingold may believe that citizens exercising their constitutional rights are “silly” or that the government has the right to place a time limit on public protest. I believe in expanding, not restricting, our rights at every possible opportunity.

Our basic constitutional rights do not require that we agree with any protest group or even enjoy their presence in our community. It does require that we respect their rights and stand up for their freedoms.

Commissioner Ingold, I would think that you have better things to do with your time than to restrict our constitutional rights on concerns that are largely figments of your imagination, over a protest that is no longer in progress.

See Article in the Findlay Courier: http://www.thecourier.com/Issues/2011/Dec/30/ar_news_123011_story2.asp?d=123011_story2,2011,Dec,30&c=n#__comments


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