2018-07-31 13:45:00

Celebrities, union activists, and politicians demand that the government raise the minimum wage for restaurant workers. They are upset that in 43 states, tipped workers can be paid a lower minimum wage than other workers. The logic behind the lower minimum is that the tips make up the difference.

That’s not good enough for people like Buffalo University law professor Nicole Hallett. She tells John Stossel that, “the problem with tips is that they’re very inconsistent.” She wants to “require restaurant owners to pay the same hourly wage that all other employers have to pay.”

But many restaurant workers like the current system. Waitress Alcieli Felipe tells John Stossel, “don’t change the rules on tips…. If you raise the minimum wage, it’ll be harder for restaurants to keep the same amount of employees.” She works at Lido, a restaurant in Harlem, and says, with tips, she makes $25 an hour, “by the end of the year I made around 48 to 50,000 dollars.”

Nevertheless, several cities and states have increased the tipped minimum wage. This had unintended consequences. Michael Saltsman, Research Director at Employment Policies Institute tells Stossel, “in the Bay Area you’ve got a 14 percent increase in restaurant closures for each dollar increase in the minimum wage.” The year after New York increased its tipped minimum wage, the city lost 270 restaurants.

Many higher-minimum activists also say that tipping encourages sexual harassment. Sarah Jessica Parker, Reese Witherspoon, Natalie Portman, Jane Fonda, and 12 other actresses wrote a letter to New York Gov. Andrew Cuomo urging him to increase the minimum, claiming, “relying on tips creates a more permissive work environment where customers feel entitled to abuse women in exchange for ‘service.'”

But Saltsman says federal data doesn’t support that. Data shows some of the states that have gone down this path that the activists want, changing their tipping system, actually have a higher rate of sexual harassment.”

When Stossel pointed that out to Professor Hallett, she replied, “sexual harassment is a very complicated problem, and no single policy is going to eliminate that problem.”

Waitress Felipe resents the activists monkeying around with her wages—she doesn’t want the law changed, “just keep as it is, we are fine. Who are those people, have they worked in the restaurant industry?”

Many haven’t. Many have no idea how popular tips are with restaurant workers. When Maine voters increased the minimum wage, restaurant workers protested and got the politicians to reverse the decision.

Stossel asks, “Why should there be any minimum? Why can’t the employer and the employee make whatever deal they want?”

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2018-08-01 04:01:00

Union protestors and celebrity advocates have decided that waiters’ tips aren’t big enough.

They are upset that in 43 states, tipped workers can be paid a lower minimum wage, as low as $2.13 an hour.

Not fair! say celebrities like Jane Fonda, who recorded commercials saying, “That’s barely enough to buy a large cup of coffee!”

As usual, those who want the government to decide that workers must be paid more insist that “women and minorities” are hurt by the market.

But waitress Alcieli Felipe is a minority and a woman. She says the celebrities and politicians should butt out.

Thanks to tips, Felipe says in my new internet video, she makes “$25 an hour. By the end of the year, $48,000 to $50,000.”

She understands that if government raises the minimum, “It’ll be harder for restaurants to keep the same amount of employees… (T)he busboy will be cut.”

She’s right.

Minimum wage laws don’t just raise salaries without cost. If they did, why not set the minimum at $100 an hour?

Every time a minimum is raised, somebody loses something. “In the (San Francisco) Bay Area, you’ve got a 14 percent increase in restaurant closures for each dollar increase in the minimum wage,” says Michael Saltsman of the Employment Policy Institute.

Activists are unmoved. “The problem with tips is that they’re very inconsistent,” University of Buffalo law professor Nicole Hallett told me. Hallett is one of those activist professors who gets students to join her in “social justice” protests.

“I simply don’t believe that increasing the minimum wage for tipped workers will lead to a reduction in the restaurant workforce,” she said. “Studies have shown that restaurants have been able to bear those costs.”

I pointed out that last time New York raised its minimum, the city lost 270 restaurants.

“Restaurants always close,” she replied.

“Restaurants don’t always close,” responds Saltsman. “Yeah, there’s turnover in the industry, but what we’re doing now to an industry where there’s low profit margins, jacking up restaurant closures… Something’s not right.”

The media rarely focus on those closings. We can’t interview people who are never hired; we don’t know who they are. Instead, activists lead reporters to workers who talk about struggling to pay rent.

“Forty-six percent of tipped workers nationwide rely on public benefits” like food stamps, Hallett told me.

I pointed out that many tipped workers are eligible for benefits because they don’t report tip income to the government.

She didn’t dispute that. “Many restaurants and restaurant workers don’t report 100 percent of their income,” she acknowledged.

Hallett and other higher-minimum activists also claim that tipping should be discouraged because it causes sexual harassment. Sarah Jessica Parker, Reese Witherspoon, Natalie Portman, Jane Fonda, and 12 other actresses wrote a letter urging New York’s governor to increase the minimum wage, claiming that “relying on tips creates a more permissive work environment where customers feel entitled to abuse women in exchange for ‘service.'”

Tipping causes customers to abuse women?

Saltsman says research using federal data doesn’t support that. “Data shows some of the states that have gone down this path that the activists want, changing their tipping system, actually have a higher rate of sexual harassment.”

When I pointed that out to Hallett, she replied, “Sexual harassment is complicated; no single policy is going to eliminate that problem.”

So raising the minimum won’t reduce sexual harassment but will raise prices, will force some restaurants to either fire workers or close, and will reduce tip income.

This is supposed to help restaurant workers?

Many object to being “helped.” When Maine voters increased the minimum, so many restaurant workers protested that the politicians reversed the decision.

Alcieli Felipe doesn’t want the government “helping” her either: “We are fine. Who are those people? Have they worked in the restaurant industry?”

Most haven’t.

I’m a free market guy. I wonder, “Why should there be any minimum? Why can’t the employer and employee make whatever deal they want?”

“That policy has been rejected,” Hallett told me, “rejected for the last hundred years. We’re not in that world.”

Unfortunately, we aren’t. We live in a world where activists and government “protect” workers right out of their jobs.

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2018-08-09 16:30:00

Sen. Bernie Sanders is all over the internet!

New York Magazine says he is “quietly building a digital media empire.”

Mic.com calls it “one of the most powerful progressive media outfits in America.”

This matters because bettors rank Sanders one of the top four Democratic presidential contenders.

I resent Sanders’ “empire” because it pushes bad ideas, yet his videos are viewed more often than mine. His videos have been seen almost a billion times.

Some are just recordings of him making noisy speeches, ranting about how Republican policies hurt Americans. For example, “Tens of thousands of them will die” if Obamacare is repealed. (He ignores the fact that more will live if the economy is allowed to grow.)

Other Sanders videos are edited, produced pieces, much like videos that I make.

One powerful one begins with a President Trump speech where the president recites the song “The Snake,” in which a woman nurses a snake back to health—only to have it bite her. “You knew damn well I was a snake before you took me in!” shouts the president. He was arguing against loose immigration controls.

But the video cuts to Trump calling criminals “animals,” and an “expert” says Trump is using “the same kind of language that the Nazis used.”

The video never mentions that when Trump said “animals,” he was talking about MS-13.

A recurring Sanders video theme is that Trump supporters are “faces of greed” who scheme to get even richer by doing things like abolishing the estate tax.

Sanders never mentions that the estate tax taxes money that had already been taxed; it’s double taxation.

He could still argue against repealing it, but he ought to be fair.

Many Sanders videos demand that government make college free.

His staff interview themselves.

May Ayad, a Sanders associate media producer, tells us, “It’s not just one or two people saying, ‘I can’t afford to go to college.’ This is like the majority of college students in the entire nation!”

Winn Decker, research intern for the Senate Budget Committee, whines, “Student loans kept me from doing things like purchase a home.”

Sanders staff assistant Terrel Champion tells viewers, “Somebody has to foot the bill. The government should assume that responsibility!”

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2018-08-14 15:45:00

Today is the 83rd anniversary of Social Security, and this year it went into the red. In the long run, it has a shortfall of $32 trillion.

John Stossel says that the program is unsustainable. Young people shouldn’t expect it to cover their retirement.

Romina Boccia explains the Heritage Foundation’s plan to allow young people to contribute to their Social Security payments via private investment accounts.

Those private accounts would likely grow faster than people’s contributions to Social Security, and young people could invest in “whatever floats your boat,” Boccia tells Stossel.

Private investment accounts have been tried in other parts of the world. When Chile started them in 1981, it was poorer than most Latin American countries. Now it’s the very richest.

Yet mass demonstrations denounce it for being run privately, and for companies taking some of the profit. They miss the fact that Chileans have more money for retirement than most Latin Americans only because of their private accounts.

Privatization is also unpopular in America, and so are Boccia’s other proposals. She and Heritage would raise the retirement age to 70 to account for rising lifespans.

“When Social Security was actually founded, life expectancy was below 65,” Boccia tells Stossel. Now it’s 78.

Stossel tells Boccia: “What you guys are pushing is the right thing to do, but it’s not popular.” She replies: “It is not popular, but I think people don’t fully understand how these programs work.”

The good news is that this was the first time that when Stossel went to talk with people on the street, most people understood the problem.

One man called it a “Ponzi scheme” and asked, “why not take it and invest it in the stock market and let it grow that way?”

A woman summed it up well: “The country’s in a deficit; there’s a point where you can’t pay out and go in the negative forever.”

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2018-08-15 04:01:00

Social Security is running out of money.

You may not believe that, but it’s a fact.

That FICA money taken from your paycheck was not saved for you in a “trust fund.” Politicians misled us. They spent every penny the moment it came in.

This started as soon as they created Social Security. They assumed that FICA payments from young workers would cover the cost of sending checks to older people. After all, at the time, most Americans died before they reached 65.

Now, however, people keep living longer. There just aren’t enough young people to cover my Social Security checks.

So Social Security is going broke. This year, the program went into the red for the first time.

Presidents routinely promise to fix this problem.

George W. Bush said he’d “strengthen and save” Social Security. Barack Obama said he’d “safeguard” it, and Donald Trump said that he’ll “save” it.

But none has done anything to save it.

“There is a plan out there to save it, but it requires some tough choices,” says Heritage Foundation budget analyst Romina Boccia.

Heritage proposes cutting payments to rich people and raising the retirement age to 70.

Good luck with that. Seniors vote. Most vote against politicians who suggest cutting benefits.

This summer, interviewing people for my new video about Social Security’s coming bankruptcy, was the first time I had heard the majority of such a group say they were aware there is a problem. One said, “We’re already at a trillion dollars (deficit)…. (I)t’s almost like a big Ponzi scheme.”

Actually, more like a pyramid scheme. Ponzi schemes secretly take your money. But the Social Security trick is written into the law—there for anyone who bothers to look.

Social Security isn’t the only hard choice ahead of us. Medicare will run out of money in just eight years. At that point, benefits will automatically be cut. Social Security hits its wall in 15 years.

Amazingly, as we approach this disaster, Democrats say—spend even more.

Sen. Elizabeth Warren (D-Mass.) proudly announced, “Nearly every Democrat in the United States Senate has voted in favor of expanding Social Security.”

How would they pay for it? “Raise taxes on the wealthy!” is the usual answer.

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2018-08-21 14:10:00

Bernie Sanders is all over the internet. His videos are everywhere and, unfortunately, millions watch.

How have his socialist ideas reached so many people? John Stossel explores.

Many of Sanders’ videos are just him ranting about how Republican ideas hurt people. He claims that the repeal of Obamacare will mean “tens of thousands of [people] will die.” He ignores the possibility that thousands will live if the economy is allowed to grow.

Many videos focus on President Trump. One claims Trump “uses the same kind of language the Nazis used” because he called people animals. The video didn’t mention that, in that case, Trump was talking about the MS-13 gang.

A common theme in Sanders’ videos is income inequality. Sanders says that’s “immoral” and “causes suffering for the working classes.” Stossel explains that the wealth gap doesn’t cause suffering. Yes, rich people got richer, but the poor and the middle class got richer too. Sanders never says that.

Stossel says Sanders’ videos are a mix of socialist propaganda and economic ignorance.

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2018-08-28 14:30:00

“Gouging” becomes an issue every hurricane season. After big storms, some people raise prices. Then politicians and the media freak out. Both demand tougher laws against “gouging.”

But Nobel Prize winning economist Milton Friedman says, “the gougers deserve a medal” because they take risks to bring in goods that people desperately need.

Annelise Kofod, Erika Lewis, and Maggie Hroncich are students who get that.

They are winners of the contest held by John Stossel’s Charity Stossel in the Classroom (SITC). They collected $1500, plus a free trip for them and their teacher to visit Stossel in New York City.

This year’s contest invited students to write about “price gouging.”

“When people hear ‘price gouging’ they think, oh, ‘gouging’—this awful thing. But it really is kind of just another name for ‘supply and demand,'” explains 17-year-old Annelise Kofod of Raleigh, North Carolina, who won the High School video award.

“Supply and demand,” she says in her video, can help people get things they desperately need.

Stossel’s classroom video reports on a so-called gouger, John Shepperson. Watching news reports after Hurricane Katrina, he learned that people desperately needed electric generators. So Shepperson bought 19 generators and drove them 600 miles to the hurricane disaster zone. He offered to sell them for twice what he paid. Lots of people wanted to buy them.

But Mississippi police called that price gouging. They confiscated his generators, and locked him up. Did that benefit the public? Stossel doesn’t think so.

Erika Lewis of Towson University, who won the college-level video category, says, “as I did more and more research I was like, ‘ok, maybe price gouging isn’t such a bad thing.'”

Maggie Hroncich of Grove City, Pennsylvania, won the high school essay contest. She points out that, “actually, the price gougers are the moral ones.”

Stossel agrees. He’s glad that SITC students understand the benefits of market forces, even when politicians and the media don’t.

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2018-09-04 13:33:00

Hearings begin today for President Trump’s Supreme Court pick, Brett Kavanaugh.

John Stossel wonders whether Kavanaugh will be good for liberty.

Libertarians are right to worry. Kavanaugh has shown deference to government when it spies on people.

In one case, Kavanaugh allowed the government’s “metadata collection program,” in which the government stored phone data collected from millions of Americans.

Kavanaugh even went out of his way give comments on that case, saying the metadata program “serves a critically important special need—preventing terrorist attacks on the United States.”

But a government report later found “no instance in which the program directly contributed to…disruption of a terrorist attack.”

Yes, says Ilya Shaprio, the Cato Institute’s senior fellow in constitutional studies, Kavanaugh disagrees with libertarians on national security. But on just about every other issue, Kavanaugh would likely advance liberty.

Shapiro notes that Kavanaugh is one of the best judges in the country at opposing government regulation on individuals and companies. As a judge on the U.S. Court of Appeals for the D.C. Circuit, Kavanaugh tried to strike down lots of regulations: net neutrality, EPA admissions rules, and the Consumer Financial Protection Bureau. He didn’t always succeed, but he argued that they were all bureaucratic overreaches.

Shapiro tells Stossel that Kavanaugh would also likely overturn Kelo v. City of New London, the eminent domain decision that upheld the right of governments to take private property for nearly any reason.

Kavanaugh is also good on gun rights. Citing the Second Amendment, he tried to overturn a D.C. ban on all semi-automatic rifles.

The left fears Kavanaugh mostly for other reasons. Sen. Kristen Gillibrand warns, “What’s at stake is freedom for LGBTQ Americans, for equal rights, for civil rights.”

Sen. Bernie Sanders, meanwhile, warns he would “tell women they don’t have the constitutional right to control their own bodies.”

But their biggest fears are misplaced, Shapiro tells Stossel. Kavanaugh is unlikely to change rulings on Roe v. Wade and gay marriage, because he and Chief Justice John Roberts respect precedent, especially if changing it would disrupt people’s lives.

The left can breathe easier on those things, says Shapiro, but he notes that Kavanaugh will likely overturn one thing that is dear to the left: affirmative action.

“Kavanaugh could provide the fifth vote to overturn that 40-year-old experiment with using racial preferences to promote some kind of nebulous diversity.”

Should libertarians be happy with Kavanaugh overall, Stossel asks? “Definitely,” Shapiro says. “He’s not going to agree with us all the time, certainly. But no judges or justices do.”

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2018-09-05 04:01:00

Some people are very angry about President Trump’s new Supreme Court pick.

“Hell no, Kavanaugh! He is a dangerous man!” protesters shouted on the steps of the Supreme Court. Sen. Kirsten Gillibrand yelled, “What is at stake is freedom for LGBTQ Americans, for equal rights, civil rights…”

“They are freaking out because they don’t understand,” Ilya Shapiro, editor of the Cato Institute’s Supreme Court Review, tells me. “Those top areas, abortion or gay rights or Citizens United, there’s really not going to be a change.”

Every time one party appoints a judge, the other party acts as if the appointment will fundamentally change America. But the Supreme Court is the most cautious of the three branches of government. Today’s Court, headed by Chief Justice John Roberts, is especially respectful of precedent.

They almost always base their decisions on decisions made by prior justices, and they often defer to lower courts. That doesn’t lead to many surprising changes.

Maybe that’s why, despite activists protesting most every recent appointment, a study finds most Americans can’t name a single Supreme Court justice.

We notice the president, and most of us can name at least some members of Congress. Those people might do something surprising.

Supreme Court justices, whether Republican or Democratic appointees, are not very likely to undo existing laws, especially laws that millions of Americans have already acted on.

After 45 years of legal abortions, Roe v. Wade isn’t likely to be repealed. Gay marriage is pretty safe too after a quarter-million gay marriages. The Court’s unlikely to reverse itself on either issue.

Partisans would be smarter to keep their eyes on issues where the Court is closely divided.

Private property cases like the Kelo decision might go differently with Brett Kavanaugh on the Supreme Court instead of swing-voter Anthony Kennedy. In that case, Kennedy joined the Court’s four liberals in affirming the government’s right to seize privately owned land and give it to other private landowners who might pay more in taxes.

Kennedy voted “for the bad guys,” says Shapiro, adding optimistically, “Kavanaugh could very well be the fifth vote to overturn Kelo.”

Also, affirmative action faces challenges. A lawsuit accusing Harvard of discriminating against Asian-Americans may reach the court soon.

Shapiro says, “Kavanaugh could provide the fifth vote to overturn that 40-year-old experiment with using racial preferences to promote some kind of nebulous diversity.”

Kavanaugh also has a history of reining in government regulators—”all these alphabet agencies that increasingly intrude in people’s lives,” as Shapiro puts it. “He has written at length that the government keeps doing things that it doesn’t have the power to do.”

At the White House, the day he was nominated, Kavanaugh made a point of saying, “The Constitution’s separation of powers protects individual liberty.”

That was good to hear.

As a judge in D.C., Kavanaugh voted to strike down some environmental rules. “I like the idea of clean air and clean water,” says Shapiro, “but the EPA has taken a lot of liberties.”

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2018-09-11 13:38:00

If you live in one of 65 U.S. cities, you’ve probably seen electric scooters.

To unlock one, you just use an app on your phone. It costs one dollar to unlock and 15-cents a minute after that. You go where you need to go, and then just leave the scooter anywhere. The scooter stays there until someone else rents it. It has a GPS which allows riders to locate them and prevents theft.

John Stossel tested one in Washington, D.C. He wonders if this is the next revolution in urban travel.

Jennifer Skees, who studies technology policy at the Mercatus Center, calls the scooters “a new twist on old technology…something that works even better, to solve needs in dense urban areas.”

Yet some cities have banned electric scooters. San Francisco City Attorney Dennis Herrera said they endanger “public health and safety.” Skees calls that ironic “because San Francisco always seems to be clamoring for more transportation options…complaining about the traffic and asking for green transportation.”

What about safety? A man reportedly died after falling off a scooter and reckless scooter riders have injured pedestrians. Skees answers, “we actually haven’t seen a large number of accidents or injuries…we don’t ban bicycles because somebody might get hurt on a bicycle.”

The scooters anger lots of people. Some complain about safety risks—others despise them as a symbol of techie gentrification. Videos show people throwing scooters into the ocean and setting scooters on fire.

But Maggie Gendron, director of strategic development at the scooter-sharing company Lime, tells Stossel, “it’s a low percentage of vandalism…[in one city] 10,000 rides and 18 vandalism complaints.”

Some cities are starting to welcome the scooters. San Francisco recently lifted its ban, granting permits to two small companies but rejecting permits to 10 companies including Lime and Bird. Washington, D.C., Austin, Seattle, and about 62 other cities have active scooter-sharing now.

Stossel says, as often happens, entrepreneurs invented something great. He wonders how many cities will impose destructive regulation.

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