business news in context, analysis with attitude

Continued discussion of the labor situation in Southern California. MNB user Mark Beuerman wrote:

I would like to respond to your question "Does top management at Kroger, Safeway, and Albertsons see reductions in annual salary figures when sales are off and the stock price is down?". If they are still employed there then yes they can. I have seen employee contributions to health benefit packages steadily increase in one of those chains you mentioned, and I have seen people from Directors to Vice-Presidents lose their job because of an economic downturn. My question would be, do union dues decline when labor is being asked to provide additional money into their health care package?

I have seen entire towns shut down because of stubbornness in labor and management in the towns only industry. I think the big three in SoCal and the UFCW better wake up and realize that they are on the same team and strive to compromise, because if they don't they might find that they will still be on the same team and the name of the team will begin with a "W".

Agreed…though we think that both sides need to come to this realization.

Another MNB user wrote:

Both the Union and Corporate better realize soon that they ARE ON THE SAME SIDE.

The last time I looked, everyone’s paycheck is from the same source.

In this environment everyone needs to give a little to get these chains competitive and ready for new competition.

With all the confrontations and allegations, why do you think Wal-Mart is licking their chops to get into California?

We got the following email from MNB user James Curley about health insurance issues:

The health insurance system in this country is in a true crisis. Think about the current state of affairs. Insurance companies must raise premiums to pay for total services that hospitals and physicians provide. Hospitals and physicians must raise prices to include the rising cost of malpractice insurance and new wonder drugs, treatments, etc. that have a premium cost attached to them. Drug companies and medical device manufacturers must make profits to invest in new and better modalities of treatment. This is the 'market side' of the system and as such, makes good sense and is what people mean when they say we have the 'best' medical system in the world. People in countries with socialized Medical care often come here because treatments are available first.

The government side is murkier. Medicare is underfunded and will get worse as baby boomers retire, because our friends in Washington don't actually set aside the tax portions we pay for this, but use the dollars as soon as they receive them to fund current liabilities. Laws provide for huge malpractice settlements with no guidelines or caps on damages so that rational values can be applied to pain and suffering, which is something home and auto insurance policies do every day, if you think it about it (personal injury limitations). Laws in most states also say that emergency medical treatment can't be refused to citizens who can't pay or are uninsured, so the uninsured often receive minimal care with real costs attached. Government employees at almost all levels (municipal, county, state, federal) receive excellent health benefits as part of salary and compensation, ALL of which is funded by all taxes of every type paid by all of us.

So if you work for the government (or one of the very few corporations who can still afford to fund premium health plans), you get outstanding health care with minimal out of pocket costs, usually for your entire life, including retirement. This means that the sector of the economy which produces zero wealth (government) has the best health care and the sector of the economy which produces all wealth (commerce) can't insure 43 million people who don't work for the government (if they're working at all!) due to rising costs; and must now ask employees to 'give back' salary to help defray the costs of benefits. Essentially, the for-profit sector of the economy is being hijacked by the no-profit side of the economy as far as health care goes.

Then we cry for government to 'fix' the problem. A real problem is that, for people actively working in government, it's not actually a problem, since they have excellent coverage and benefits. That's one reason the system is broken; it doesn't make sense. Government can raise taxes and fees to help fund itself and its employee benefits program, but employers who compete in the global economy can't raise prices the same way. It's a rigged system, and it's going to break apart eventually.

I have been self-employed for almost 20 years, but I come from an extended family of many municipal employees. When I tell them I pay almost $5,000 annually for catastrophic coverage (no office visits, tests, prescriptions etc. covered) with $1,000 deductibles for each family member, they're shocked. Several have actually said to me: "Gee, we don't pay anything for our insurance." This perception is pervasive in government, even at the management level.

Revolutionary ideas are needed. If they don't appear, revolutionary something will, and it may be really ugly.

Regarding the ban in Oakland on big box stores, one MNB user wrote:

Quoting from my local paper: "Wal-Mart is clearly not the right option for our Tri-Lakes communities. Our downtowns continue to stabilize as new businesses mix with old staples and as each community finds its niche. Here in Lake Placid, we have fought Wal-Mart before. So has Saranac Lake." [Lake Placid News, 10/17/03]

The editorial was primarily focusing on the opening of a WiseBuys store, whose format appears to be similar to Ames.

So Oakland isn't a trend setter in banning stores above a certain square footage. There are others and it gives the appearance of a guerilla war approach against Sam's disciples.

In a commentary yesterday about labeling, we wrote that "while we are agnostic on the issue of GMOs, we believe that America's preference for no labeling is foolhardy, and that its attempted bullying of the EU is misguided."

One MNB user responded:

Kevin, please don't say that America's preference is to not label. I'm an American and I'd prefer a label on products containing GMOs. And I know a lot of people who feel the same way I do. Heck, I'd also like to know how many trans fatty acids are in my food.

It's silly to assume that any label is a warning label - warning made from 100% fruit - warning low fat - warning all natural ingredients. Labels can
be used for anything.

Here's a controversial issue that EU consumers are demanding a label for. Too bad we didn't demand enough of that ourselves.

When we say "America" in this case, we are referring to government officials. We try never to confused official positions for the preferences of the citizenry.

We also have continued debate about our contention that many Americans "eat to live," while Europeans often "live to eat."

MNB user Spencer Johnson wrote:

I have to agree and disagree with the statement that Americans eat to live.

I spend every meal enjoying each bite of my food and, when I'm done, I start thinking about what I am going to have for the next meal. I hate missing meals. I also like to spice up my food or use different sauces and test as I add ingredients. I want it interesting every time. I also think the good ole US of A has some of the finest restaurants with some of the most interesting food in the entire world. If all Americans ate only to survive, we would never go out for a nice meal, we'd eat McDs every day. KC, you have had many weekend blurbs about great restaurants you have gone to, did you go there only for sustenance or for the wonderful food?

On the other hand, I see many people that run out to "grab a quick bite" to eat at their desks. So then I would have to agree with the statement that we eat to live. I think, for Americans, it depends on the circumstance. I feel most Americans would love to enjoy a good meal three times a day (or even one), but our culture and work environments do not allow it. When you are working 10+ hours a day, you have to eat quickly or take it to go or your day is stretched to 11 or 12 hours away from home. What kind of life is that especially if you have kids? It's a sad state of affairs that our culture has put us in.

We definitely don't fall into the "food as sustenance" category…though it makes Mrs. Content Guy and the Content Kids a little crazy…

We complained yesterday about the amount of money spent by the federal government advertising the new $20 bill…suggesting that it would have been cheaper for the feds to just send everyone an email telling them about the new bill.

This got lots of response.

MNB user Glenn Ring wrote:

I couldn't agree more, how redundant. It's like advertising air, what choice do we have. Talk about throwing good money after bad…

Another MNB user wrote:

Though I suspect you were joking about the feds sending everyone an email, you touched on a pretty dicey issue. From a privacy standpoint, would people have an issue with the government sending them emails? I wonder what backlash would be created by that.

How about an email only to people who filed their income tax forms electronically…?

Another MNB user wrote:

It seems pointless to spend $20 million to introduce something that automatically will turn up in wallets and purses.

As you said, it's a $20 bill -- not a Sacagawea Golden Dollar or anything (which the U.S. Mint wasted $40 million marketing back in '99-'00).

MNB user Don Brandt saw a problem with the email idea, though…

Are you suggesting the government engage in promoting "SPAM"? Isn't that against the law?

Didn’t think of that.

Another MNB user wrote:

Maybe they are indirectly supporting eating Salmon and getting your daily dose of Omega-3 fatty acids. Perhaps they should look for a funding subsidy from the Salmon Industry???

Sounds like a fishy theory to us.

Of course, not everyone agreed with us, as MNB user Ward Eames wrote:

I didn't know about it until I saw the TV ads. I read all the papers, weeklies and internet news and even your fine newsletter! How do you think the Fed. is going to reach the check out people and the people training the check-out people? TV is the perfect mass media for this message. Not very complicated and you need the visual. The ad with the guy doing the juggling tricks with the $20 bill is especially effective.

What may be an overkill is the frequency. I have seen it too many times. I do watch a lot of TV sports this time of year.

MNB user Brian Richardson suggested that instead of an email the government should have sent…

…one of those keen new 20's.

Yeah…they could have made that part of the tax cut/rebate.
KC's View: