What power does the president have when Congress fails.

There are some out there who are cheering the fact that President Obama had the moxie to act when Congress didn't.  For years, perhaps for two decades, the President has been wanting Congress to pass an immigration reform bill.  The reason, well, immigration laws as they are currently written do not work.

The reason they are not working is a little something called The Constitution, which says, "All persons born or naturalized in the United States, and subject to the Jurisdiction thereof, are citizens of the United States and the State wherein they reside."

This has been interpreted to mean that if you are born in the United States, you are a citizen.  For the current immigration debate it means that if a couple from other nations comes into this country, and has a child, that child is a citizen of the US and the state they reside.  If the parents are deported, the child remains here without his mother and father.

This problem is not fixable by a simple or a comprehensive bill passed through Congress, nor is it fixable by executive order of the President.  The only way to fix this bill is to alter the language of the 14th amendment.  This would not be unrepresented as most countries in the world do not recognize "anchor babies" as citizens.

Of course, this is out of context.  The 14th Amendment was designed to give citizenship to former slaves freed as a result of the Civil War, not to give citizenship to anchor babies.  But the courts have interpreted the language of the amendment as such.  However, if it weren't for this, families could be deported to their home countries in total. 

In the long run, that doesn't sound very appealing.  And because most undocumented immigrants come from Latin America, as well as a sizable minority from Asia, any such effort would be dismissed as discriminatory against ethnic groups. 

For all these reasons, efforts to reform immigration have stalled in Congress for years.  The US Constitution only provides limited mechanisms for the executive or judicial branch to act when the legislative branch is hopelessly deadlocked. But President Obama doesn't agree.  And when Congress failed to act on immigration, he decided to act on his own.  Not only was the very action, at best, borderline constitutional, it was sneaky and it will be months before any of this could be fixed by Congress or by the Supreme Courth.  Here are some of the sneaky ways in which this executive order was executed.

1.  Lame Duck Congress.

Election Day is the first Tuesday in November, but the newly elected Congressmen/women/androgynous beings and Senators do not begin their term until the 3rd of January.  The sixty days or so remaining in the term of the old Congress are referred to as the Lame Duck days of Congress and the constitution limits what can be done at this time.  Usually, Congress does not take up new business during their Lame Duck session. 

Legislation passed during this time can be quickly over-turned when the next Congress takes office in January.  Let's also not forget that the party controlling the Senate changes in January.  Any effort to undo what the President has done will die in the Senate before the GOP takes over. Also, the Republicans do not have an over-ride proof majority.  Any action taken by Congress could be vetoed by President Obama.

2.  Thanksgiving Recess

The president did not sign his executive order until after most members of Congress were on their way home for the Thanksgiving recess.  Therefore, members of Congress who decided that spending a week back in their districts and with their families look week for not doing anything.

3.  His term and legacy

The last two years of a president's second term are usually forgotten as the debate in the media turns to the fight over who will replace him.  Too often, the last two years of the second term of many of our past presidents have been marked by scandal and controversy.  Johnson had Vietnam to deal with.  Reagan dealt with the Iran Contra affair.  Clinton's sex life came to haunt him.  And George W. Bush had a whole slew of problems.

I personally wouldn't have yelled a whole lot of Obama had been able to get congress to pass the action that he took in a bill.  This bill affects a small percentage of the undocumented immigrant population.  I would be frankly surprised if the Latino community doesn't act like the kid who got a $2 bill from grandma for Christmas.

I was once told by a college professor that I had that politician who actually solve problems don't get re-elected.  It is absolutely true that the President can't make law on his own when Congress doesn't act.  Our founding fathers would have been foolish to write the Constitution to allow it.  Why even have a legislative branch if the President can act on his own?  The president can write executive orders, but only within the realm that Congress has permitted him to act.

I would have rather seen the President provide a little more leadership and patience in this matter.  He could meet with Latino leaders.  He could put names and faces on TV.  He could encourage citizens to petition their representatives.  But he did not of that.  Perhaps the teleprompter on the bully pulpit is broken.  I think the president doesn't have the command of a crowd that his predecessors possessed.  Something that Hollywood describes as "IT".  I fear for what else this president is going to do on his own.  I hope that someone will emerge as a leader in Congress and put the president back in his place.

I don't say that as a Republican.  I say it as a Citizen of the United States.  Anyone who applauds what the President has done should remember that what this president has done, the next president can undo.  And what this president has done, the next president can repeat.  It is scary to think about no matter which party you belong to.  If Barack Obama can do this, what will Sarah Palin do if she ever gets elected?  Even Democrats in congress should stand up for the sake of the country.

Three Things McDonalds Does Wrong

I am not going to bore you with another reason to raise the minimum wage.  You simply have to read this blog.  I have already spoken on it.  I am simply going to explain that the problems that McDonalds and the fast food industry have brought on themselves.  I worked for a McDonalds for about 4 months and am grateful that I was able to escape.

1.  Too many franchises.

Within a 10 minute drive from my home, there are no fewer than 7 McDonalds outlets.  In Riverdale, Utah, there is a McDonalds inside Wal-Mart and another right across the street.  There are is one in Roy, Utah.  There are two nearby in West Haven, Utah. One near 40th and Midland Drive.  The other is just east of the 21st Street interchange with I-15.  In Ogden there is one near 12th and Washington.  There is another near 40th and Washington witch is technically South Ogden.

There is a reason for this. McDonalds doesn't consider food to be primary to their business model.  It is real-estate.  They purchase the prime locations for franchises, for no other reason than to keep competitors like Burger King and Subway out of the neighborhood.

Source

What has happened as a result?  The restaurants compete against each-other for customers.  This means that they must keep their prices low, perhaps too low, to really operate efficiently.  More supply with the same level of demand means lower prices for your product.  That is the main reason why McDonalds employees are paid at or near minimum wage.  The franchise owners can't afford to pay more.

Because McDonalds is an industry leader, nearly everyone else in the fast food market has to follow suit.  If you are going to compete with McDonalds, you have to operate on a small margin as well.  Which means low wages industry-wide.

2.  Low-quality food

I am certainly not going to endorse the findings in Super Size Me or any other trashy documentary.  These guys are too biased in their findings, and it is obvious. 

There are many counter-arguments, however.  KSL recently produced a news story about a many who has had at least one Big Mac every single work day for several years.  That is all he will eat for lunch.

However, when the food is cheap, it is also low in quality. Sure, it is not as bad as it could be. McDonalds has the buying power to get higher-end cheap food. But it is still cheap food.  Very few are going to argue with that point.

3.  Career Path

Hey, did you hear the one about the famous celebrity chef who got his start at McDonalds.  Me neither.  Here is a list of people who began working at McDonalds and became famous.  None of them for their cullinary skills

http://www.businessinsider.com/celebrities-who-used-to-work-at-mcdonalds?op=1

Of course there was this story as well...

http://news.mcdonalds.com/US/news-stories/McDonalds-Quality-Ingredients-Take-Center-Stage-D

I will concede that if a famous chef or a top chef ever worked at McDonalds, they would consider that knowledge bad for their image and would hide it from the public.  Most famous chefs will say that they began their careers washing dishes at some mom and pop bakery or restaurant and worked their way to the top.  From my McDonalds experience, I would argue that most people who work their way to the top a McDonalds want to become franchise owners rather than some famous chef.

It has also been my experience that if an employee gets a better offer elsewhere and wants to leave, there is little resistance in letting him go.  There are hundreds of people out there who want that job.

We have three things that McDonalds has done to make their own bed.  Let's see if they decide to fix it.

$15 per hour is too much too fast.

It may be time to raise the minimum wage, but $15 per hour is too much way to fast.  That is the proposal in Seattle right now.  This will not have the effect that people think it will have.  There are three questions that politicians need to consider before raising the minimum wage.  First, what percentage of workers will be effected by the proposed increase, not just overall but on a business by business basis.  Second, what will business do to meet the excess payroll expenses.  Third, what are the potential unintended consequences of the increase.

The typical business guideline is that a company spend 30% of their revenues on labor.  That means that for every dollar your company makes, you should spend 30 cents paying people.  If your company makes 1 million dollars, then you can spend 300,000 on paying your employees.  But this varies by industry.  Service industries like hotels and restaurants will spend a higher percentage of revenue on payroll while many professional offices will spend less on payroll.  Service industries pay a little over 50% of their revenue on payroll.  Other industries pay as little as 15% on payroll.

Currently, the federal minimum wage is 7.25 per hour.  15 dollars per hour represents a 107% increase in the minimum wage.  This increase is not only going minimum wage workers.  A business is going to have to raise almost everyone's wage.  Currently, approximately 30% of the workforce nationwide makes $15 per hour or less, depending on who works full-time or part-time, where only about 2% of the workforce makes the minimum wage.  If the minimum wage is raised to $15 per hour, a company is not going to raise the wage of the person who makes $14.75 to $15 per hour.  The raise will have to be greater.  What effect will this have if only Seattle raises the minimum wage?

The companies that will be hardest hit are the service companies.  The service industry will be hit the hardest.  This means that businesses in these industries will have choices to make.  How do you deal with such an sharp increase in your expenses.  This isn't like some vendor increasing their prices.  You have no choice but to pay this money.  A company that can't make payroll doesn't stay in business for very long.  If your paying 50% of your revenue on payroll and suddenly it become 100%, you have nothing left for any of your other expenses.  You have to pass most of these expenses onto your customers.  Or you cut your staff.  Or you move.  Or you close.

What will likely happen is that some business will pass the new expenses onto their customers, and will even double their prices.  Some business will cut their staff.  Some businesses will increase their prices a little while cutting some staff.  Some businesses will relocate.  Some businesses will close.

Can you imagine operating a restaurant with only have the staff?  Can you imagine waiting longer for your meal because there are not any clean dishes?  Because there is not a cleared table?  Can you imagine waiting twice as long for your food because the wait staff and kitchen staff are inadequate?  Imagine what happens when word gets out that you can stay or eat in Everett or Bellevue or Renton or Federal Way pay less and get better service?

Could a business operate in downtown Seattle, bring in perspective clients and deal with the expense.  Would it also make sense to operate that business in the suburbs?  Would you also not want to operate where your employees have less expense to deal with.

There is also a myth that many people have.  Too many people believe that their boss, their business owner has plenty of money.  That they can absorb the expense.  Even if you have the cash, even if you are Bill Gates or Warren Buffet, you don't stay that way for very long by letting your payroll expense grow beyond your revenue.  However, most owners in the business industry aren't exactly rolling in the cash.  It's a good bet that the person who owns the nearby McDonalds franchise is struggling just as much as most families are.

Imagine going to Seattle in the near future where most of the service businesses are boarded up.  Where most people at the downtown offices brown bag not to save money, but because there are very few affordable places nearby to have lunch.  Or where the company caters lunches from nearby cities to save money.  Imagine going to Pikes Place Marketplace and finding very few of sites there are operating.  Imagine walking along the waterfront with your family, but finding that the only places to eat will cost you hundreds.  This is probably not the future that the Seattle Chamber of Commerce wants, which explains why they are fighting the proposed increase.

It may be time to raise the minimum wage, but such a steep increase will be too much for one business community to deal with.  The effect on the service industry will be too drastic.  If done, the increase in the minimum wage should be lower and implemented more gradually and should be done in a way that is realistic.