The answer, partially, is unions. While the talent of a Broadway show may cost a pretty penny, many of the "aspiring" among them most likely aren’t making as much as the stagehands.
At Avery Fisher Hall and Alice Tully Hall in Lincoln Center, the average stagehand salary and benefits package is $290,000 a year.
To repeat, that is the average compensation of all the workers who move musicians’ chairs into place and hang lights, not the pay of the top five.
Across the plaza at the Metropolitan Opera, a spokesman said stagehands rarely broke into the top-five category. But a couple of years ago, one did. The props master, James Blumenfeld, got $334,000 at that time, including some vacation back pay.
Now I’m not one to begrudge high salaries, if they’ve been earned. And I’ll be the first to tell you that any CEO who earns a bonus when his or her company has a down year shouldn’t get one. However, that’s really not the point here. These are wages (the top paid stagehand at Carnegie Hall makes $422,599 a year in salary and $107,445 in benefits and deferred compensation) driven by unions. The first figure mentioned is the average salary at Lincoln Center. If I were a lefty, this would probably fall under the "corporate greed" category. The jobs are neither highly skilled nor technical. But they’re locked down and belong to only one entity – the union. The pay is at that level for one simple reason – power and the willingness to use it, even when it really isn’t necessary. And that power engenders fear:
How to account for all this munificence? The power of a union, Local 1 of the International Alliance of Theatrical Stage Employees. "Power," as in the capacity and willingness to close most Broadway theaters for 19 days two years ago when agreement on a new contract could not be reached.
Wakin reported that this power was palpable in the nervousness of theater administrators and performers who were asked to comment on the salary figures.
Kelly Hall-Tompkins, for one, said, "The last thing I want to do is upset the people at Carnegie Hall. I’d like to have a lifelong relationship with them." She is a violinist who recently presented a recital in Weill Hall, one of the smaller performance spaces in the building.
She said she begrudged the stagehands nothing: "Musicians should be so lucky to have a strong union like that."
Right – and musicians would be playing to empty venues if they did since the cost of their entertainment would be beyond what most wage earners can afford. Instead musicians exist in a much more competitive world where their earnings are tied to their talent. Ms. Hall-Tomkins, for one, would prefer the IATSE model, I’m sure.
But you’ll also notice that she, and apparently others, were afraid to comment on the story for fear of ruffling union feathers.
Unions had a place once – and I’ll even say that their existence today can be a good thing if they represent their members properly, that is make sure they’re paid a competitive wage and benefits as well as being treated fairly. However, in many cases, like that above, they end up demanding exorbitant salaries and benefits only because they can.
Where are the Bernie Sanders of the world yelling “when is enough enough”? As long as the theater owners, administrators and artists refuse to speak out about those sorts of salaries and benefits that drive up ticket prices, the union will continue to push. And some stagehands will earn more than the President of the United States (although I think our current President is more suited for the roll of stagehand than his present job).
In the world of leftist “fairness”, this would seem a prime target for those who like to go after CEOs and “greedy corporations”. But expect not a peep about this union, public sector unions or any union for that matter. After all, while they may be as “greedy” as any corporation the left could name, they’re “family” and thus exempt from such criticism.
Of course that’s the "official" number – as we’ve been pointing out for some time, the real number is well into double digits. But it again points out that markets are not at all happy with the business environment and consumers simply aren’t consuming at a level to push hiring even if it was settled.
In a significant setback to the recovery and market expectations, the United States economy added just 39,000 jobs in November, and the unemployment rate rose to 9.8 percent, the Department of Labor reported Friday. November’s numbers were far below the consensus forecast of close to 150,000 jobs added and an unemployment rate of 9.6 percent.
The increases tallied are mostly seasonal temporary work, meaning private companies aren’t creating many jobs at all (again, the economy has to generate around 125,000 new jobs a month just to stay even):
Private companies, which have been hiring since the beginning of the year, added 50,000 jobs in November. Most of those increases came from temporary help, where 40,000 jobs were added, and in health care, with an additional 19,000 jobs.
Retail jobs declined by 28,000 in November, while manufacturing, which had showed some strength earlier in the year, lost 13,000 jobs.
Government jobs dropped by 11,000 in the month.
Outlook? Bleak. Meanwhile the tax fight continues in the Congress. If you’re wondering why the business climate remains so unsettled, it is thinking like this which is typical of the majority party there:
Yeah, that’s right – this yahoo is claiming that small businessmen don’t ever make any decisions based on tax considerations. So they won’t mind a tax hike in the least.
How in the world does anyone take someone like that seriously? However, understanding that his thinking is most likely not uncommon there, it isn’t at all hard to imagine why Congress seems clueless as to how to stimulate the economy, is it?
As we near the mid-term elections and people start paying attention (and early voting begins), we’re naturally seeing some tightening of the races. However, one thing that hasn’t been tightening, per many polls, is independents going for the Democrats.
Anyone who has watched elections over the years knows full well that indies are the swing vote that, for the most part, determine the outcome of most elections. Some refer to them as the mushy middle. Others see them as voters truly independent of the 2 party system and not satisfied with either. And during each election, they pick the side which best represents the direction they’d prefer to see the country go on the often mistaken assumption that the winner will head that way.
All that being said, keep in mind as you hear stories about tightening races that one thing that hasn’t been tightening is the Democratic hold on independent voters – at least not in this election cycle. Why?
Remember, this is a Congressional election and as much as the GOP might like it to be a referendum on Obama (and to some degree it will be) it’s mostly about the Congress we have. Indies aren’t very enamored with it or its leadership (Nancy Pelosi is at 29% and Harry Reid is lower). A new poll makes the point:
The Hill 2010 Midterm Election Poll found that 61 percent of likely independent voters in 10 battleground House districts — a critical swing demographic — think the leadership under House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry Reid (D-Nev.) is more liberal than they are.
“That’s a very significant finding that tells you where independents are likely to go,” said Mark Penn, president of Penn Schoen Berland, which conducted the poll. “In terms of independents, Reid and Pelosi are viewed as out of step.”
And that feeling is likely to effect the independent vote, because it is strictly a numbers game that keeps the leadership in place. Change the numbers, i.e. vote for the other party’s candidate, and if the change is large enough, you change the leadership. Pelosi’s the most likely to lose her leadership job (and, rumor has it that even if Dems somehow hold on to the House, she may not be Speaker), but if Reid manages a win in Nevada, his power in the Senate may be neutralized by GOP gains in that chamber.
I got a bit of a chuckle with this quote:
“The inability to define Boehner and McConnell as out of touch with mainstream values was a strategic failure of the Democrats in the election,” said Simon Rosenberg, a veteran of the 1992 Clinton war room and president of NDN, a center-left think tank and advocacy group.
“The Democrats have done a bad job this election cycle defining the Republican Party as out of touch with American values,” he said.
It is hard to define the other side as “out of touch with American values” when the Democrats were proving every day and in every way how out of touch they were. The GOP does indeed have it’s ‘out of touch’ problems, but they’re insignificant in comparison (at least at the moment) to the Democrats.
Jim Kessler, vice president for policy at Third Way, a centrist Democratic think tank, said many Democrats have played into the Republican strategy by attacking business.
“A lot of the Democrats are resorting to economic populism, and the polling shows that voters aren’t buying it,” he said. “ ‘Corporate America’ is a Washington term. Outside Washington, that’s business and the people who employ you.”
The anti-business, government union party – is that really how the Democrats want to be identified? Is it any wonder independents are deserting them in droves?
That’s the central theme of a Ken Langone op/ed in the Wall Street Journal. Langone is a co-founder of Home Depot who gives Obama a lecture he’s long deserved. He does a good job of summarizing the absurd rhetoric used by Obama and his administration and the attitude they project that has done nothing to help and everything to hurt the recovery:
Your insistence that your policies are necessary and beneficial to business is utterly at odds with what you and your administration are saying elsewhere. You pick a fight with the U.S. Chamber of Commerce, accusing it of using foreign money to influence congressional elections, something the chamber adamantly denies. Your U.S. attorney in New York, Preet Bahrara, compares investment firms to Mexican drug cartels and says he wants the power to wiretap Wall Street when he sees fit. And you drew guffaws of approving laughter with your car-wreck metaphor, recently telling a crowd that those who differ with your approach are "standing up on the road, sipping a Slurpee" while you are "shoving" and "sweating" to fix the broken-down jalopy of state.
That short-sighted wavering—between condescending encouragement one day and hostile disparagement the next—creates uncertainty that, as any investor could tell you, causes economic paralysis. That’s because no one can tell what to expect next.
Again we confront the difference between a politician in a permanent campaign and a leader. And we see the result.
Obama seems mystified by the role of the president. He seems not to understand that leaders don’t use the old, divisive and politically charged rhetoric of the campaign trail, but instead have the job of doing (and saying) what is necessary to move things in a positive direction. That has not been something Obama has done at all when it comes to business.
There’s another point Langone made that is worth featuring:
A little more than 30 years ago, Bernie Marcus, Arthur Blank, Pat Farrah and I got together and founded The Home Depot. Our dream was to create (memo to DNC activists: that’s build, not take or coerce) a new kind of home-improvement center catering to do-it-yourselfers. The concept was to have a wide assortment, a high level of service, and the lowest pricing possible.
We opened the front door in 1979, also a time of severe economic slowdown. Yet today, Home Depot is staffed by more than 325,000 dedicated, well-trained, and highly motivated people offering outstanding service and knowledge to millions of consumers.
If we tried to start Home Depot today, under the kind of onerous regulatory controls that you have advocated, it’s a stone cold certainty that our business would never get off the ground, much less thrive. Rules against providing stock options would have prevented us from incentivizing worthy employees in the start-up phase—never mind the incredibly high cost of regulatory compliance overall and mandatory health insurance. Still worse are the ever-rapacious trial lawyers.
Regulations, taxes, compliance and mandates cost businesses billions each year. That’s billions that aren’t spent on employees, customers, expansion or growth. And it is especially stupid to increase all of those in a recession – yet that’s precisely what is going on now. And it keeps the market unsettled and at least defers or may in fact kill any possible action by businesses which may benefit the overall economy.
Obama’s actions and rhetoric are a case study of someone who doesn’t understand his job, doesn’t understand the power of the words he utters (because he doesn’t understand his job) and has been very irresponsible with his rhetoric at a time when the damage that rhetoric can do are compounded by the situation (recession).
OJT is not something a president should be doing – especially in a recession. And for the supposed “smartest guy in the room”, he sure seems like a slow learner when it comes to his job and the requirements of leadership.
Well despite all their talk, it isn’t the Democrats. Speaking of the "party of no"Yesterday they killed an amendment offered by Sen. Mike Johanns (R-Neb.) that would have dropped the requirement for increased 1099s issued by business thereby saying "no" to saving huge compliance costs for small businesses.
Johanns said Section 9006 of the ObamaCare bill, requires a "2,000 percent increase" in mandatory filings of 1099 tax forms for businesses, charities, state and local governments, and even churches.
That means that in 2012:
…all organizations will be mandated to issue 1099 tax forms not only to contracted workers, but to any other group or business from which they purchase at least $600 worth of goods or services in a given year. They’ll also be required to send a copy of each 1099 document to the IRS. Johanns called the entire process "punishing" to businesses and cited a July report from the IRS’ independent taxpayer watchdog arm warning that Section 9006 "may impose significant burdens" that it labeled "disproportionate" and perhaps unenforceable.
Also killed was a proposal by Sen. Bill Nelson (D-Fla.), which would have raised the minimum annual threshold for 1099 requirements from $600 to $5000, and would have exempted businesses with 24 or fewer employees.
Now, just sit back and imagine the compliance cost this will require. If you ever wanted an example of why businesses have no confidence in government, this should help you with that understanding. This is as much an unfunded mandate as any. And it will have businesses wondering if they want to spend the money if they have to report just about everything they do via 1099.
As usual, a duplicitous White House is involved as Guy Benson reports:
Johanns was especially critical of the White House’s role in torpedoing his amendment. Yesterday afternoon, he told Townhall.com that the president’s stated support for repealing Section 9006 was a bluff. "The White House is panicking. They know it’s a disaster, and they wanted to send a signal that they’d cede ground knowing full well my amendment and [Nelson's] wouldn’t pass," he said.
So as you sit in your office at 9pm filling out 1099s or paying someone else overtime to do it, remember who brought you the onerous and costly task. Then do what you must.
First, let me say – I love baseball. Since I was a kid and played in Little League, it has been the game for me. And consequently I’m a huge professional baseball fan. I live for the season and the playoffs.
However, I’m not a fan of professional baseball’s ethics at times. And I’m certainly not a fan of those who own teams and attempt to swindle taxpayers into paying for their new stadiums. Obviously that’s not just something that professional baseball teams do. You can find examples of it among all professional sports teams. But the latest example does come from professional baseball, specifically, the Florida Marlins.
If you follow the game at all, you know that the Miami-Dade county government has agreed to pick up the lion’s share of the cost of a new stadium for the team down there. Owner Jeffrey Loria and president David Samson have, for years, maintained that the Florida Marlin franchise was, at best, a break even venture. They claimed, they needed a new stadium to attract fans and become profitable and if the county couldn’t help provide it, they’d probably have to move the team.
The Miami-Dade County government acquiesced to this blatant attempt at rent-seeking, apparently believing the financial claims of the Marlin’s front office.
Miami-Dade County agreed – without the consent of taxpayers – to take $409 million in loans loaded with balloon payments and long grace periods. By 2049, when the debt is due, the county will have paid billions.
In fact, it is estimated the $645 million dollar stadium complex will end up costing $2.4 billion with all of the loans the county unilaterally took out without taxpayer permission to keep the team in Miami. The Marlin’s franchise will only pay $155 million of the stadium cost.
In case you’re not familiar with the term “rent seeking” or need a refresher, it’s defined as:
The expenditure of resources in order to bring about an uncompensated transfer of goods or services from another person or persons to one’s self as the result of a “favorable” decision on some public policy. … Examples of rent-seeking behavior would include all of the various ways by which individuals or groups lobby government for taxing, spending and regulatory policies that confer financial benefits or other special advantages upon them at the expense of the taxpayers or of consumers or of other groups or individuals with which the beneficiaries may be in economic competition.
That is precisely what the Florida Marlin team has done. As mentioned, they’re not alone. This happens all too often. Tax payers end up being burdened with increased taxation that benefits a private company or business but puts a huge dent in the government’s budget. That’s not how it should work. It is both an abuse of power by government and abuse of the taxpayer by the private entity via its rent seeking.
What’s even worse is it appears the county government may have been conned by the team, according to this report:
Most harrowing is the takeaway that baseball’s biggest welfare case could have funded a much greater portion of the ballpark. In 2009, when the Marlins started spending some of their profits on their portion of the stadium, they still had an operating income of $11.1 million. The team fought to conceal the $48.9 million in profits over the last two years because the revelation would have prompted county commissioners to insist the team provide more funding. Loria, an art dealer with a net worth of hundreds of millions, wouldn’t stand for that. He wanted as much public funding as possible – money that could’ve gone toward education or to save some of the 1,200 jobs the county is cutting this year.
The lesson, of course, is one that governments never seem to learn. The pot of money they have to work with is finite. There’s only so much the taxpayer will stand for. When government involves itself in a project of high cost and dubious worth – no matter what the “experts” tell them about the importance of something like a professional baseball franchise to the city – they usually end up hurting themselves and those they serve. The tradeoff here is actually obvious. Those interest payments on the huge loans taken by the county could have been used to save jobs that actually served the community.
Instead they are going to pay for a stadium from which a private enterprise will profit, even while that private entity pays less than a quarter of its cost.
That’s not the free enterprise system at work. That’s not capitalism. Instead it is an example of corporate rent-seeking – subsidizing business on the back of the taxpayers – that governments do more and more.
No baseball team is worth $2.4 billion dollars, but that’s what the citizens of Miami and Dade county, via their government, have now committed to spend to keep the Marlins there. I’m a fan of baseball, but I’m not a fan of rent seeking. And I’d guess most the taxpayers in Miami, no matter how much they enjoy the game, probably feel exactly as I do.
And, as you might imagine, it’s all politically driven:
G.M. said that it would offer both common stock and preferred stock in the offering, which could begin as early as October, when the Obama administration will be seeking to portray its aid to the auto industry as a success before midterm elections in November.
How neat and nice. Claiming a profit from the "turnaround", something which has been debunked since, GM hopes to free itself from being called "Government Motors", which, it says is hurting sales. Additionally GM is still hemorrhaging money with a negative cash flow in the millions per month.
Given all of that though, I loved this:
The Treasury is expected to sell enough stock in the initial offering to bring its overall ownership position in G.M. below 50 percent — freeing the automaker of the stigma of being called “Government Motors,” which executives have said is hurting its reputation in the marketplace. G.M.’s 734-page filing said taxpayers would “continue to own a substantial interest in us following this offering.”
Got that? Treasury is going to sell enough stock to bring its overall ownership position in GM below 50% – however:
The Treasury, in a statement on Wednesday, said it would “retain the right, at all times, to decide whether and at what level to participate in the offering.”
The statement said the offering would not include the government’s preferred G.M. shares, worth $2.1 billion.
Read that however you wish to read it, but that says BS to the first part of the claim where I come from. The way I read it is Treasury has assumed “the right” to interfere (by buying more stock, not just selling it) at any time it deems it necessary to do so.
So – given the way the last group of investors was treated when GM went into bankruptcy and the fact that government “retains the right” to interfere – why in the world would I want to invest my money in Government Motors?
You could also entitle it "meet the new boss, same as the old boss". What I’m talking about is a recent meeting between UAW bosses and GM workers. To say it didn’t go well would be a vast understatement)(via Sweetness and Light):
Workers at a General Motors stamping plant in Indianapolis, Indiana chased United Auto Workers executives out of a union meeting Sunday, after the UAW demanded workers accept a contract that would cut their wages in half.
As soon as three UAW International representatives took the podium, they were met with boos and shouts of opposition from many of the 631 workers currently employed at the plant. The officials, attempting to speak at the only informational meeting on the proposed contract changes, were forced out within minutes of taking the floor.
The incident once again exposes the immense class divide between workers and union officials, who are working actively with the auto companies to drive down wages and eliminate benefits.
Actively working with the auto companies? They are part owners now of the auto companies – they’re "management" for heaven sake.
Interesting how it suddenly looks when you’re on the "other side", huh? And in the face of vociferous opposition, the UAW officials abandoned the podium.
All of this was written up at the World Socialist website. There’s also a video which gives real credence to the story. In the beginning someone from the local is speaking. He or she (I really couldn’t tell which) then introduces the UAW international drones at about 2:48. As you watch it, it will remind you of some of the townhall meetings of last summer:
The article goes on to say:
Workers at Local 23 voted 384-22 in May to reject reopening a previous contract, which had guaranteed that wages would remain intact in the event of a sale. GM first announced its intention to sell the plant in 2007, threatening to close it if it did not find a buyer.
Despite overwhelming opposition by the rank-and-file, UAW executives secretly continued negotiations with JD Norman, which they outlined in a document sent to workers last week.
Pretty bad when your union which is now management sells you out, isn’t it? To paraphrase one worker, “they’ll still have their jobs while they sell ours out”. Wow – wasn’t that the argument against the hated “management?” Heh …
Irony – it’s really something to be appreciated sometimes, isn’t it? The UAW always wanted control of the auto companies didn’t it? Now it has it – sweet, huh? And private sector unions wonder why their membership is dropping like a rock.
Yup, as Tim Geithner would say – “welcome to the recovery”. And, given the trends, I would guess this isn’t the last of the “unexpectedly” high unemployment report we’ll see. Again, ad nauseam, there’s been no incentive provided by government, but plenty of disincentives that are keeping businesses on the sidelines and consumers from spending:
Initial jobless claims climbed by 19,000 to 479,000 in the week ended July 31, the most since April and exceeding the highest estimate of economists surveyed by Bloomberg News, Labor Department figures showed today in Washington. The number of people receiving unemployment benefits dropped, while those getting extended payments rose.
A cooling economy means employers will resist taking on more staff in coming months, raising the risk consumer spending will weaken further. The jobless rate rose last month as payroll increases weren’t large enough to keep up with gains in the labor force, economists forecast a government report tomorrow will show.
As if anyone has to be told, this is not good. And it wouldn’t surprise me to see the U6 unemployment rate tick up over 10% again in the next few months:
“There really is no upside momentum in the labor market, and that’s a critical long-term determinant of where the economy is going,” said Steven Ricchiuto, chief economist at Mizuho Securities USA Inc. in New York. “People just aren’t getting jobs.”
That’s because jobs aren’t being created and offered. Name the incentive, at this point, to do so? Tax increases are in the offing, health care laws, 1099 requirements, Democrats still pushing for cap-and-trade, new financial regulations that impact the market and economic policies which give the impression the administration is at war with business.
Why would any sane business owner invest in his business in times as unsettled as these?
Answer: he or she wouldn’t. And that’s the biggest reason unemployment continues to “unexpectedly” rise. Headcount is the easiest thing to add when times are good. It’s also the easiest thing to reduce when times are bad. And if they stay bad – as we’re seeing now – few if any are going to be adding jobs.
Economics 101 – provide incentives to get the behavior you want. Provide disincentives to discourage the behavior you don’t want. The administration’s economic policies have, to this point, provided business with all manner of disincentives to hiring. And then the “experts” are surprised when jobless rates are “unexpectedly” higher than estimated.
Of course you an find “experts” who will point to each and say that’s our future. USA Today has a list of them in an article which explores the title question. It appears most believe it will be the latter – a slow recovery. But some are worried about signs that the present situation compares very closely with the 1930s.
And, in many ways it does. We continue to see weakness everywhere. And it appears until we get the housing market squared away (housing starts down 5% this month) and some other areas cleaned up, plus get some hiring going on, it is going to continue to be rough out there.
Jobs continue to be key to the recovery (we are a consumer driven economy – no job, no money. No money, no consumption) so the faster we can employ the jobless, the faster we see the recovery take off. However, that’s a huge undertaking:
The national unemployment rate stands at 9.5%, or more than 14 million Americans, says the Department of Labor, far below the peak unemployment rate of 25% during the Great Depression. But those numbers don’t fully convey the jobs weakness. Another 8.6 million people are working part time because they can’t get full-time jobs. And 3.8 million, discouraged by the dearth of job opportunities, are out of work but were not counted as unemployed.
So while not at 25%, we’re most likely somewhere in the 14% range in real terms (not the politically motivated U3 of 9.5%).
"If you’re not making money, it’s pretty hard to spend it," or pay bills, Johnson says. "There’s no fuel in the economic engine to make it grow. People are spending less and saving more."
This, of course, is where the impetus comes from to claim if the people can’t spend, the government should. We’ve seen, first hand, how that’s worked out – unemployment went up and stayed up. And “more” wouldn’t have made any difference as is now being argued.
The answer isn’t government spending – not in a consumer driven economy. No, the way you help solve this problem, if you’re government, is to incentivize business expansion and thereby hiring to drive consumer spending. Instead, the policies of this administration, at least to this point, have businesses on the sidelines sitting on both their hands and their money.
Further crimping the outlook for future growth is the fact that cash-rich U.S. companies, despite improving profitability, are still leery of the recovery and are reluctant to deploy that money to grow or hire new workers.
"Companies have pared their expenses dramatically, upgraded their technology, improved their profit margins," Johnson says. "But they are not hiring more people, because they would have to see greater demand to do so."
Once again, the government can’t create that “greater demand” via “stimulus”. That demand has to come from consumers. Those are the customers businesses rely on to generate demand, and with about 14% in the unemployment/underemployment mix, that demand simply isn’t there – or, at least, not enough to expand and hire.
Catch 22? In a way. So what can government do?
Cut business taxes. Get out of the way. Provide incentives to expand and hire (accelerate capital equipment depreciation for instance, if bought now).
There are lots of ways short of spending us into oblivion that the government can positively effect the market and the business climate. Unfortunately, as Mort Zuckerman has stated and the business community as a whole believe, we have an “anti-business” administration in charge right now – and that further unsettles the situation. Perception being reality, as long as the business community believe that, not much is going to change.
So, there’s your day’s sunny outlook on the economic front. As Donald Luskin says:
"The only way to get out of debt is to earn money," Luskin says. "The only way to get out of recession is to grow. If you kill growth, you are" in trouble.
And right now, we’re in trouble.