/* */ /* Mailchimp integration */
-1
archive,paged,author,author-zoe,author-2,paged-5,author-paged-5,stockholm-core-1.0.8,select-child-theme-ver-1.1,select-theme-ver-5.1.5,ajax_fade,page_not_loaded,menu-animation-underline,header_top_hide_on_mobile,wpb-js-composer js-comp-ver-6.0.2,vc_responsive

Consumer Price Index Data Reveals High Wage Areas Are Experiencing Higher Inflation

From: Minimum Wage Facts & Analysis

Inflation continues to rise to historic heights, and rapidly rising state minimum wages appear to be adding fuel to the fire. As employers feel the pinch of operating costs rising on many fronts, Bureau of Labor Statistics (BLS) data shows areas with steeper minimum wage mandates have higher inflation rates for food purchased in restaurants or take-out establishments.

The Bureau of Labor Statistics collects data on inflation through growth in the consumer price index (CPI), which measures price increases for goods commonly purchased by the average consumer. BLS also measures inflation by specific categories of goods, including food prices both “at home” including groceries, and “away from home” which includes various take-out, fast-food dining, and full-service meals.

As the restaurant industry historically employs the majority of minimum wage earners, rising mandates are most likely to affect price increases in restaurant establishments in this “away from home” category.

West Coast states have had notoriously high minimum wage requirements – reaching $15 per hour this year in California and $14.49 per hour in Washington. Despite experiencing similar levels of overall inflation (i.e. CPI increase for “all items”), these West Coast areas have experienced inflation for food away from home as much as 10 percentage points higher than areas that have not raised their mandate above the federal minimum requirement of $7.25 per hour.

While each group (high wage states and $7.25 wage states) each experienced overall inflation averaging 20% from 2017 to 2022, inflation of food away from home was significantly different. The CA and WA regions experienced on average a 25% increase in prices of food away from home, compared to less than 18.7% increases for Georgia and Texas regions abiding by a $7.25 minimum wage and a $2.13 tipped wage.

Looking at inflation over the last decade reveals this trend is not a recent fluke. California’s state minimum wage has risen by 88% since 2012, and Washington state’s rose by 60% over the same period. Inflation in these areas is up to 20 percentage points higher for food away from home since 2012 compared to states mandating the federal minimum wage.

This finding concurs with existing economic research on the link between minimum wage mandates and inflation cycles.

One review of the existing economic literature on the inflationary effects of wage hikes finds a 10 percent minimum wage increase raises prices by up to 0.3%. Another study by the American Enterprise Institute found the same wage hike could cause more dramatic inflation in the southern U.S. – up to 2.7% increases in price. A Stanford University economist also found raising the minimum wage drives the largest price increases for the poorest 20% of families.

 

The best US states for freelancers

From: Tipalti

The pandemic gave workers the opportunity to step back and reflect on their careers with many of them reevaluating their priorities, quitting their jobs and going freelance. Workers are now less willing to stay in jobs that they don’t find fulfilling and self-employment gives people a chance to take control of their professional lives, making their jobs work for them by allowing for greater flexibility and higher wages.

So which countries around the world and which US states are the best for freelancers? We’ve delved into the data to find out, analyzing the number of freelancers and coworking spaces, the cost of living, broadband and mobile speeds and costs and the demand for freelancers to find out.

The best US States for freelancers

Texas 8.2/10: Texas can be crowned the top state for freelancers in the US. Freelancers in the state are in high demand as it ranks in the top 3 for annual searches. The Lone Star State also has one of the fastest broadband speeds in the country, ranking in the top 10.

Tennessee 7.2/10: Next up is Tennessee, scoring highly in the index thanks to its low cost of living. The Volunteer State ranks in the top 10 for this factor. It also has a high proportion of self-employed workers, ranking just outside the top 10.

Georgia 7.1/10: Georgia ranks third, thanks to it placing in the top 10 for 3 factors. Georgia places in the top 10 for the lowest cost of living so freelancers won’t have to be worried about their finances. Demand for freelancers is also high in the state, placing in the top 10.

Number of self-employed people (per 100,000 residents)

Montana 8,600: Taking the top spot for the highest proportion of self-employed workers is Montanna. Agriculture is the largest industry in The Treasure State, and self-employment in agriculture is commonplace creating the largest proportion of self-employed workers in the US.

Maine 8,400: Self-employment means you are fully in control, setting your own hours and following your passion. Nobody knows this more than workers in The Pine Tree State as Maine takes second place with 8,400 self-employed workers per 100,000 people.

Vermont 8,200: Vermont is one of the most entrepreneurial states on our list with 8,200 self-employed people per 100,000. Most of the self-employed citizens of The Green Mountain State have jobs in the construction industry, followed by jobs in real estate.

The Monthly Cost of Living

Mississippi $4,401: Taking the top spot for the lowest cost of living is The Magnolia State. Rent and land prices in the state are lower than the other 49 states by 37% and the ease of shipping means prices for goods are kept low.

Arkansas $4,442: In second place is Arkansas with a monthly cost of living of $4,442. The low average salary in the state means the cost of living is lower across the board and property taxes are some of the lowest in the country.

Oklahoma $4,447: Up next is Oklahoma, ranking third as one of the US’s most affordable states. Housing and rent prices are nearly half that of the national average, thanks to a large amount of affordable land. Utility bills are also roughly 8% lower than the national average.

Number of coworking spaces (per 100,000 people)

Colorado 2.4: One of the most important benefits of coworking spaces is the motivation they provide by getting rid of distractions and increasing productivity. This is important to the self-employed workers in Colorado as they top the ranking for the most coworking spaces per 100,000 people.

New York 1.9: The Big Apple ranks second for this factor, with many self-employed New Yorkers thriving in coworking spaces thanks to the flexibility they provide and their communal atmospheres. The state has 1.9 coworking spaces per 100,000 people.

California 1.6: Next up is The Golden State with 1.6 coworking spaces per 100,000 people. Coworking spaces have flourished in the state thanks to the high commercial rent prices making office spaces less affordable for smaller businesses.

DE’s Legislative Session: Partisan Rule Leaves Delaware Taxpayers Out!

From: Kathleen Rutherford, Executive Director, A Better Delaware

As America enters a recession and inflation reaches a 40-year high, one might think Delaware would take some of its $1 billion budget surplus to ease the burden on taxpayers and small businesses. If you ask a legislator, they might point to the one-time $300 “relief check” they graciously returned to each Delaware taxpayer. But the reality is, every opportunity the General Assembly had to provide meaningful relief that would incentivize growth and create economic opportunity — they met with inaction. That’s in stark contrast to 24 states which, during the same period of time, enacted lasting tax cuts.

According to the Tax Foundation, ten states enacted individual income tax rate reductions, six states enacted corporate income tax rate reductions, and two states permanently exempted groceries from their respective sales tax bases.

Though meaningful tax relief didn’t happen, there were a few good bills that made it across the finish line. Senate Bill 188, for example, increases the $2,000 pension exclusion otherwise available for military pensioners under age 60 to $12,500, providing an incentive for military retirees under age 60 to locate in Delaware. The bill passed in both chambers and awaits the governor’s signature.

Yet, there were numerous bills that would have helped struggling taxpayers that never saw the light of day. Consider House Bill 358, a bipartisan bill introduced by Rep. Bill Bush, D-Dover, that would have cut the realty transfer tax by 25%. Delaware currently has the highest realty transfer tax in the nation. The realty transfer tax is levied on the purchase price of the home and is usually split between the buyer and seller. According to Zillow, the median price of a home sold in Delaware as of June was $356,744. Had it passed, HB 358 would have reduced the transaction cost for the sale of such a home by more than $3,500 and collectively saved homebuyers an estimated $83 million in its first year. According to the National Association of Realtors, realty transfer taxes are regressive because the tax burden is higher for lower-income households. Additionally, increased closing costs on the transfer of existing residential property are likely to reduce the ability of new and current homebuyers to purchase a home, the association notes. “As a result, these taxes have a negative impact on housing purchases and therefore economic development.” Even if the bill passed, Delaware’s transfer tax would still be higher than most: Only Delaware, the District of Columbia, New Hampshire, New York, Washington, and Pennsylvania, have transfer taxes above 1%. Unfortunately, the bill was assigned to the House Revenue & Finance Committee where it never received a hearing.

House Bill 191 would have cut each personal income tax bracket by 10%. The bill was assigned to the House Revenue & Finance Committee in May 2021 and never received a hearing. The bill would have also cut the corporate tax rate from 8.7% to 6.1%. At the same time, West Virginia’s House of Representatives passed a bill to cut each income tax bracket by 10%.

House Bill 445 would have cut Delaware’s gross receipts tax by 50%. Gross receipts taxes are viewed as some of the most economically damaging, as they are assessed at each stage of a supply chain rather than at the final point of sale. This leads to tax pyramiding, which causes prices to rise as the cost of taxes is often shifted to the consumer. Reducing the gross receipts tax would have allowed small businesses to be more competitive and created a tax environment that benefits both businesses and consumers. Some refer to the gross receipts tax as “Delaware’s hidden sales tax” because it is applied to the business rather than the consumer. Inevitably, though, that cost is passed on to the consumer. 45 states have repealed the gross receipts tax.

Charlie Copeland, director of Caesar Rodney Institute’s Center for Analysis of Delaware’s Economy & Government Spending, writes, “In short, during bad economic times, Delaware’s hidden sales tax, [also known as] the gross receipts tax, ensures that Delaware small business owners pay among the highest personal income tax rates in the nation – taking money out of the business at the exact moment the business most needs that money.”

The bill was assigned to the House Revenue & Finance Committee where it never received a hearing.

With the state consistently bringing in hundreds of millions in surplus funds, now is the time to give taxpayers the chance to thrive, not to burden them with additional economic baggage.

Most importantly, voters must look beyond the $300 checks and realize how much of their hard-earned money Delaware’s government is keeping — not giving back — and keep that in mind in the upcoming elections.

275 Young People to be Employed Through Bank of America’s Wilmington Youth Career Development Program

From: WilmToday

Wilmington’s 2022 Youth Career Development Program (YCD) helps young Wilmington residents form professional skills and prepare them for their careers. YCD recently received a $100,000 grant from Bank of America to aid in employing 275 young professionals across a wide range of career paths and internship opportunities this summer.

Bank of America also provides Better Money Habits financial literacy lessons to all YCD participants. The Better Money Habits program is run by Bank of America employees and uses interactive and fun methods to teach financial topics like budgeting, borrowing, investing, and building credit.

Wilmington Mayor Mike Purzycki gave his thoughts, saying “The continued financial commitment over the past seven years and financial literacy programming from Bank of America has been impactful for the program and our teens. We appreciate Bank of America’s generosity and continued support of the future of the City of Wilmington and our residents.”

Recipients of the grant were chosen based on their commitment to addressing basic needs and workforce development. This is a part of Bank of America’s philanthropic efforts in local communities.

Chip Rossi, President of Bank of America Delaware, commented that “The City of Wilmington’s Youth Career Development program is a long-term commitment by investing in our future workforce and working to create opportunities for youth to help them thrive. The city is advancing racial equality and economic opportunity in our community and having a tremendous positive impact on the next generation.”

Read more WilmToday blogs by clicking here.

Deadlines and Licensing Are a Recipe for Disaster

From: Libertas Institute

Most people face arbitrary deadlines in their daily lives. Whether you had a school assignment due on an odd date or had to complete a chore in a certain time frame, these deadlines can become cumbersome.

Unfortunately, arbitrary deadlines implemented via increased government regulation are keeping Utahns out of the labor market. This comes at a time when Utah desperately needs employees to fill essential roles, like those in healthcare left vacant by recent labor shortages. Without these roles being filled, Utah’s labor market will be prohibited from growing at a pace necessary to meet consumer demands.

Often those attempting to become licensed face arbitrary deadlines buried within licensing requirements. These deadlines dictate that a license’s education and experience requirements must be completed either within a certain number of years or no earlier than a certain amount of years.

This time frame unfairly burdens individuals who may have low incomes or large extraneous time commitments. For example, a low-income individual or a mom with multiple kids may need more time to complete the requirements due to not being able to pay for or take time off work for the education requirements within the timeframe.

Under the current system, Utahns could be barred from licensure because they were one minuscule requirement short of meeting licensure requirements in an established given time frame. Would giving this individual another month or week to complete that last hour really harm citizens? Absolutely not.

On the flip side, individuals who do have the means to meet licensure requirements in given time frames are also being punished by this system. If a highly motivated individual wanted to complete a license in an amount of time below the required years to obtain a license they would also be blocked from doing so. The result of this is this individual loses out on the income they could’ve accumulated in their new profession. This can result in monetary burdens that are completely avoidable.

Clearly, unnecessary time restrictions must be done away with. Those hoping to contribute to their communities by entering the workforce must have the flexibility to obtain licenses in a way that does not unfairly burden them. Only when this happens can Utah’s economy and consumers best be served by the workforce.

Delaware’s Mix of Businesses has Changed – Regulations Need to Change

From: Caesar Rodney Institute

In the late 1990s, Delaware’s economy was known for the “four C’s” – Chemicals, Chickens, Cars, and Credit Cards, and big business thrived. By 2000, Delaware had 113 business entities across the state that each employed more than 500 people, mainly in those four industries, but then Delaware changed.

The following decade wreaked havoc on three of the C’s – Chemicals, Cars, and Credit Cards – and the most recent decade has not seen any rebound. By 2020, the number of businesses employing more than 500 people had dropped by 22.1% (by 25 companies) to only 88 companies.

During this same time when “big business” shrank its footprint in Delaware, small businesses struggled to gain a footing. In 2000 there were 13,610 businesses with fewer than five employees in Delaware. Today that number is 15,499.

These very small businesses have grown by 13.8%. Similarly, Delaware businesses with less than 50 employees have grown from 22,536 firms to 26,021 firms, an increase of 15.5%.

Despite the last 20 years of a radically shifting employer mix, the state’s regulatory environment continued to expand dramatically.

Today, according to the Mercatus Center at George Mason UniversityDelaware’s 2019 Administrative Code (DAC) “contains 104,562 restrictions and 6.7 million words. It would take an individual about 374 hours-or more than nine weeks-to read the entire DAC. That’s assuming the reader spends 40 hours per week reading and reads at a rate of 300 words per minute.”

To put this into further context, there are almost seven times more regulations than there are Delaware employers with fewer than five employees. Yet, when one of these micro-businesses needs to upgrade an air conditioner or look for expansion space, the full force of these regulations slows and often stops their investment.

In addition, most of Delaware’s regulations are not simply health and safety regulations – but are under the auspices of Delaware’s Department of Natural Resources and Environmental Control (DNREC). While Delaware has 27,334 Health and Safety regulations, DNREC has 30,523 – 11% more than Health and Safety.

While this mismatch in regulations is already stark, Governor Carney had recently introduced Senate Bill 305 (which did not pass out of Committee) and would have empowered DNREC to grow the regulatory burden on small businesses even more than it already has.

At CRI, we want to be clear; we believe that the creation and oversight of regulations for health and safety – including appropriate environmental regulation – are a central role for government.

But, over time, the government continually adds regulations but rarely removes outdated ones. In Delaware’s case, many existing regulations are aimed at businesses that largely no longer exist in the State (e.g., according to the latest report in 2019 by the Mercatus Center, there are almost 21,000 regulations on chemical manufacturing, an industry almost entirely gone from the state). But the army of bureaucrats devoted to these existing regulations still takes taxpayer money from higher priority areas like education and mental health.

Previous CRI analyses have exposed New Castle County’s economy is smaller today than it was twenty years ago and that Delaware’s aging demographics are making economic growth even more problematic in the state.

Regulatory updating can refocus Delaware’s government on what is important to current and future citizens while freeing small businesses from wasting resources on outdated rules which ensnare them in a bureaucratic morass, slowing or even, in the case of New Castle County, stopping economic growth.

We recommend that Governor John Carney sign an executive order mandating that before a new regulation can be added, two regulations must be removed. Let’s help Delaware’s small businesses help themselves and their employees.

Revenues rise again as lawmakers prepare to vote on Delaware’s 2023 budget

From: Delaware Public Media

Delaware gets another revenue boost as lawmakers prepare to finalize the state’s 2023 budget.

The Delaware Economic and Financial Advisory Council added another 89 and a half million to the budget bottom line with its June revenue forecast.

Continued strength in personal income tax and corporate tax revenue fueled latest projected upgrades for both the current fiscal year and 2023.

The latest numbers allow lawmakers to spend up to $6.57 billion dollars next fiscal year.

The budget-writing Joint Finance Committee has finished work on the state’s 2023 operating budget, submitting a nearly $5.1 billion spending plan with just over 378 million in one-time supplemental spending.

That’s well above the $4.9 billion budget and $200 million in one-time supplemental spending Gov. John Carney proposed in January.

Lawmakers need to approve the operating budget – along with the state’s capital spending bill and Grant-in-Aid bill before the legislative session ends June 30th.

States Whose Unemployment Rates Are Bouncing Back Most

From: Wallet Hub

May’s jobs report showed a slight slowdown in growth. The economy gained 390,000 nonfarm payroll jobs, a decrease from 436,000 the previous month. In May, there were notable gains in sectors including leisure and hospitality, professional and business services, and transportation and warehousing.

Now, the U.S. unemployment rate sits at 3.6%, which is still slightly higher than it was before the pandemic but is far lower than the nearly historic high of 14.7% in April 2020. This overall drop can be attributed largely to a combination of vaccinations and states removing restrictions. It will take more time for us to reduce the unemployment rate to pre-pandemic levels than it did for the virus to reverse over a decade of job growth, though.

In order to identify the states whose unemployment rates are bouncing back most, WalletHub compared the 50 states and the District of Columbia based on six key metrics that compare unemployment rate statistics from the latest month for which data is available (May 2022) to key dates in 2019, 2020 and 2021.

 

Bill aims to cut real estate transfer tax

From: Delaware Business Times

A new bipartisan bill is seeking to reduce Delaware’s real estate transfer tax by 25%, essentially undoing a state increase from five years ago.

House Bill 358, introduced on March 31 by lead sponsor Rep. Bill Bush (D-Dover), has already garnered 17 House sponsors and 10 Senate sponsors spanning both the Republican and Democratic parties, including both party leaders in the House.

The bill will be first heard in the House Administration Committee, although a hearing has yet to be scheduled.  If enacted, the tax cut would take effect July 1.

HB 358 would reduce the state’s portion of real estate transfer tax back to 1.5% from 2.5%, while local jurisdictions would continue to collect 1.5% of a sale’s value. Seeking to close a budget deficit of hundreds of millions of dollars in 2017, legislators raised Delaware’s realty transfer tax from a longtime 3% on most properties to the current 4% with the state collecting the extra percentage point – in rare instances when no local tax is collected, the state collects 3%.

“Typically, this cost is split between buyer and seller. However, in the current competitive housing market, prospective buyers are often paying the entire tax to convince sellers to accept their offers,” Rep. Kevin Hensley (R- Odessa), who works in the real estate industry, said in a statement.

Rep. Mike Ramone (R-Pike Creek) said that legislators agreed to raise the transfer tax for only two years to cover the budget gap, but that expiration date wasn’t in the final bill, and it continues to be paid on sales small and large.

“Our high realty transfer tax is impacting two groups that can least afford it – millennials and seniors,” Ramone said in a statement. “If we can do something to both facilitate home ownership among young people while giving our older citizens a less costly opportunity to gracefully transition into their golden years, I think we have an obligation to do it.”

A decrease in tax revenue would come at a time when Delaware is seeing booming real estate sales. The state’s independent fiscal analysts board, the Delaware Economic and Financial Advisory Council (DEFAC), estimates that Delaware will pull in nearly $300 million this fiscal year from the real estate transfer tax alone, about 25% more than it did last year. That increase has been spurred along by rising property values across the board, but also by a number of high-value sales, including nearly all of the prior decade’s Top 10 sales, that have contributed millions to state coffers on their own.

Delaware has traditionally ranked at or near the top of all states in terms of its real estate transfer tax, a distinction that has led the state’s Board of Realtors to lobby for a reduction for several years. There are 14 states that have no such tax on property sales, while neighboring states like Pennsylvania and Maryland charge 1% or less on a sale.

According to Long & Foster Real Estate, the median price of a home sold in Delaware as of February was $335,000. HB358 would reduce the transaction cost for the sale of such a home by almost $3,400.

Based on the latest estimates from DEFAC, HB358 would allow homebuyers and sellers to collectively retain more than $100 million annually from the tax cut. DEFAC has projected to end the current fiscal year with a budget surplus of nearly $800 million, which has pushed lawmakers to find ways to return those savings to residents.

One bill that has already received bipartisan support will cut checks of $300 per taxpayer as a direct stimulus. Now HB358 appears poised to make the change that real estate agents have been seeking for years.

“As stewards of the American Dream of homeownership, we are excited about the introduction of HB358. This legislation could make that dream a reality for many families throughout the state. Delaware has the highest state-level Realty Transfer Tax in the nation, and while we pride ourselves on being the First State, this is not a ranking that any of us want,” Susan Giove, president of the Delaware Association of Realtors, said in a statement. “The realty transfer tax can become a major obstacle to homeownership because it must be paid in cash at the settlement table in addition to other closing costs. We believe that this legislation will make housing more affordable for all who wish to buy or sell a home and are grateful to all the sponsors for introducing this legislation at a critical time in the current real estate market.”

US Offshore Wind Jobs are Highly Exaggerated

From: Caesar Rodney Institute

Offshore wind supporters like to quote a Wood Mackenzie research study that says building 29,000 megawatts (MW) of offshore wind electric generating capacity on the Atlantic seaboard by 2030 will create 80,000 annual full-time US jobs between 2025 and 2030.

Extrapolating from an actual approved project leads to an estimate of only about 5,500 jobs, and even that number may be high. Further, the study ignores possibly over 25,600 jobs potentially lost from huge electric premiums that redirect consumer and business spending elsewhere in the economy.

The Maryland Public Service Commission (PSC) recently approved the 846 MW Skipjack 2 offshore wind project off Delaware’s coast. A review[i] of the project by the PSC consultant indicates there will be 857 temporary construction jobs and 25 permanent Operational & Maintenance jobs.

There are limited plans to build the turbines in the US, which accounts for 56% of the forecasted jobs. Induced jobs are indirect jobs created by the wages spent by direct employees and change as payroll estimates change.

The Wood Mackenzie study assumes that over half the new projects would be off the Carolinas. However, any new project needs massive state subsidies, and neither North Carolina nor South Carolina has such legislated mandated subsidies.

Money spent on higher utility bills reduces spending on everything else, like going to a restaurant or the movies.

The Skipjack project premiums[ii] will be passed onto electric customers and may average $125/MWh for the 3.3 million MWh of wind energy produced each year, or about $410 million a year. That extrapolates to $2.05 billion a year for the 4,200 MW construction the study expects. A job may be lost for every $80,000[iii] spent on higher electric bills, so up to 25,600 jobs may be lost.

Wood Mackenzie is generally reliable, but this study misses by a country mile and is misleading elected officials and the public.