I don't read the Star Tribune business section generally. Well, I check out the front page of it six days a week to make sure there's not a major story I should know about (usually there's not), and I look through the whole thing on Sundays.
Today there were three stories that I'm glad I saw, though they made me angry.
The first was by columnist Lee Schafer, who's generally worth reading. It was called After the election, you are on your own, and it's mostly about California's referendum vote on Proposition 22, which will allow Uber, Lyft, and their fellow gig economy companies to keep screwing their workers out of fair wages and benefits.
Outside of California, this proposition didn't get much coverage, but it's a disgrace.
The ride-share companies Uber Technologies and Lyft Inc. have been dogged by the issue of whether their drivers are employees for years already, as they have steadfastly insisted their drivers are independent.
If they are not employees, Uber and Lyft have no minimum wage to pay, no unemployment insurance to fund, no overtime to pay, no workers’ compensation insurance to buy, no vacation time to pay, little risk of workplace discrimination claims and so on.
There have been legal tussles over the issue. The California Legislature weighed in. And so, the companies decided to put the question to voters. Then they put their thumbs on the scale.
A handful of companies put up enough money to outspend the other side roughly 10-1, about $200 million to the Yes on 22 Committee by the end of October.
It's clearly not something that should have been subject to referendum in the first place (it should be subject to the Federal Labor Standards Act). And to add insult to injury, the referendum included a clause that made it all but impossible to repeal without a 7/8 vote in both houses of the California legislature and a confirming signature from the Governor.
Schafer analogized Proposition 22 to what appears to be our society as a whole and its theory of labor in the past few decades as the gig economy has become more prominent and labor protections less emphasized in policy. He identified all the obvious vulnerabilities of being a free-lancer, how it leaves you without a safety net of any kind, as well as on the hook for your own health insurance and matching self-employment tax. The lack of unemployment insurance is another whole thing, as identified in the pandemic. The emergency Pandemic Unemployment Assistance program that is part of the CARES act will be ending in December.
So that was story number one. Number two was titled Who is safe from audits? The rich. It was a reprint from the Los Angeles Times, and it confirmed something I already knew about changes at the IRS over the last decade or so. People with taxable incomes below $25,000 a year are audited nearly 10 times as often as the richest households. The story is based on work by David Cay Johnston, longtime tax reporter.
Some details: Of the 23 million-plus U.S. households reporting more than $10 million in income (averaging $26 million!), only seven were audited. Seven. The number of full-time staff at the IRS has gone from about 95,000 in 2010 to 74,000, and the budget from $14.7 billion to $11.8 billion. But the workload has gone up, with more population, of course. There are now 22 IRS staff per thousand Americans, vs. 44 per thousand (comparing to 1990).
The third story, from the Detroit Free Press, wasn't supposed to make you angry, which I suspect the other two were, but it had that effect on me. This one was called Study shows coronavirus pandemic could be helping to fuel pickup sales. I don't write on my blog a lot about my dislike for America's bloated pickup trucks, and the fact that it seems most people who drive them don't need a pickup truck at all. There's a lot of evidence (as in Angie Schmitt's recent book Right of Way) that oversized pickup trucks and SUVs are leading to the increased death rates of pedestrians. And they're basically a climate change disaster cash cow for the car companies, costing no more to build than a car but pumping out much higher profit margins along with increased carbon because of the laxer regulations that apply to them.
The story was full of all the usual selfishness that's found in consumer trends. People are doing home projects because of the pandemic and need a truck to move things from the home improvement store. People need a fun escape and a way to treat themselves. People used their stimulus checks.
The mortgage company owner quoted at the end of the story really got my goat. He "ordered a 2021 Ram 1500 in October sight unseen... [he said it has] 'that big screen in the middle.' He'll use his $60,000 vehicle to drive to work and take the kids to school. 'Truthfully, I haven’t even sat in a Dodge Ram before. But I saw that big old screen with all its colors and thought, 'This is what I need.... I'm gonna go into 2021 with a big screen and lots of colors on it.' Really nothing more serious about it than that."
This is the big ugly screen the guy is talking about that impressed him so much.
The only good thing about his purchase? A little research tells me that the 2021 Ram 1500 gets 22mpg city/32mpg highway. He traded up from a 2018 GMC Sierra Denali giant SUV, which gets 14mpg city/23mpg highway.
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