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$15 Hour Minimum Wage would Cost Nine Million Jobs Nationally

August 18th, 2016 Comments off

lunch box thermos ebay postedDailyBusinesNewsMHProNewsAs labor activists promote the Fight for Fifteen, the push for a $15 an hour minimum wage would lead to the loss of nine million jobs as businesses scurry to find where to implement labor-saving technology, says , James Sherk in a Heritage Foundation brief as reported to hotair.

Including wages, payroll taxes and other withholdings, a $15 per hour employee must generate $38,700 annually in value to their employers “Such a high hurdle would make it much harder for less-experienced and less-skilled workers to find full-time jobs. Many of these workers are not yet productive enough to create that much value for their employers and businesses will not hire them at a loss,” according to Sherk.

Some companies may face closing or move outside the country. In Los Angeles, American Apparel slashed 500 jobs after the city’s $15/hr law took effect. The latimes says the Bureau of Labor Statistics data indicate local apparel manufacturing in Los Angeles County had fallen 33 percent since 2005 to 2,182, and employment in the industry had also declined the same percent, to 40,500 workers. Expensive real estate, the rising cost of materials and finding employees skilled enough who can afford to live in the city are definite challenges.

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Charts credit,Heritage.org.

Studies by economists reveal an increase of ten percent in labor costs results in the loss of 6.8 percent less skilled workers in the long run. Although not an exact number, it does indicate the approximate level of job losses when wages increase.

The Washington Post reported in a study from Seattle where the minimum wage was mandated, researchers checking the numbers one way said the result was an increase in wages of $5.54/wk because of the increase, yet studying the numbers from a different angle results in a loss of $5.52/wk. Fewer workers had a job as the result of the minimum wage increase, and those that did, did not work as many hours as they had previously. The bottom line in Seattle: Earnings increased in one week sufficient to buy a Starbucks latte—until they raise the price or cut staff, which would increase wait time.

In a 40-hour week, $5.54 comes out to $0.14 per hour, which MHProNews understands means only nine percent of the increase in the minimum wage has effectively reached workers. “Ninety-one percent has dissipated in the need for businesses to counter the increased costs, either through reductions in hours or lost jobs. And that’s the best-case scenario,” said the study.

Effectof$15MinWagecreditHeritagePostedDailyBusinessNews-MHProNewsTable2

It’s not rocket science: If costs go up at one end, they have to be cut somewhere else, and this may be achieved by laying off other workers. In the industries most affected by a forced wage increase, cost competition is too significant to allow for price increases, so costs are cut elsewhere, often in labor.

In Sherk’s analysis, if the minimum wage was raised to $15/hr across the country, more than a tenth of all job losses would be in Texas, followed by 981,000 lost in California, 727,000 would disappear in Florida and 434,000 in New York.

When manufactured housing businesses consider the impact of polcies that didn’t work for Republican Richard Nixon, when he tried wage and price controls which failed, or for Democrats who propose it today, the study suggests the impact won’t be what supporters of $15 minimum wage seek.  Rather, the law of supply and demand indicates that by increasing the demand for labor through private sector job creation is a better strategy. ##

(Photo credit: ebay–Lunch box and thermos)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J Silver to Daily Business News-MHProNews.

Despite the Bashing, Hispanic Politicos Endorse Trump as Stronger than Clinton

July 19th, 2016 Comments off

Donald_Trump_cbsnews__credit postedDailyBusinessNewsMHProNewsMHProNews has learned from washingtonpost a group of conservative Latino leaders who asserted they could never support Donald Trump because of his criticism of specific Hispanics, and his policy and rhetoric about minorities, have decided that he would be a stronger unifying force than Hillary Clinton.

We are not enamored with Donald Trump’s bombastic rhetoric and personality. But at least we know that Donald Trump won’t divide the country and fuel the flames of racial confrontation by accusing the police and the entire criminal justice system of being racist,” the group wrote. “We also know that Trump can better address the terrorist threat we face because, contrary to Clinton, he is willing to acknowledge and address its root cause: radical Islamic fundamentalism. And we also know that Trump will reverse the current over-regulation and excessive taxation of business which stifles economic growth and prevents the creation of well paid jobs.”

Trump says he will repeal Dodd-Frank, which should benefit manufactured home owners and professionals. He also has an interest in a modular home building operation.

This signals that the group, mostly current or former state party leaders and activists, recognizing the importance of sound business practices to their communities, is willing to forgo ethnicity and make party and ideology the primary considerations. However, it follows months of Trump bashing Mexicans as rapists, taking a swipe at Susanna Martinez, the nation’s only female Hispanic Governor, and calling U. S. District Judge Gonzalo Curiel, who is hearing a fraud case against Trump, biased because of his immigration policies. Curiel was born in Indiana.

Recent polls by Telemundo, NBC News and The Wall Street Journal reveal Trump has a 11 percent approval rating among Hispanics. Univisions poll indicates 77 percent have an unfavorable view of him, and 79 percent oppose the building of a wall between Mexico and the U. S..

Trump campaign chairman Paul Manafort said that Trump intends to make overtures to minority voters following the GOP convention. ##

(Photo credit: cbsnews-Donald Trump)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J Silver to Daily Business News-MHProNews.

Calls for Housing Finance Reform Continue to Resound

July 13th, 2016 Comments off

mel watt  jacquelyn martin  associated press postedDailyBusinessNewsMHProNewsWhile many on both sides of the aisle recognize the importance of reforming the secondary housing finance system, 32 Congressional Democrats sent a letter to Federal Housing Finance Agency (FHFA) Director Mel Watt saying the government-sponsored enterprises’ (GSEs) capital base, which is set to expire in 2018, sends out a dark cloud for “underserved markets.”

Meanwhile, the Mortgage Bankers Association, National Association of Realtors, National Association of Home Builders, American Bankers Association and National Housing Conference also sent a letter to the FHFA saying Congress needs to take up the issue of housing finance reform, according to housingwire.

While Watt did not respond directly to the letters, in a letter not made public, but which The Wall Street Journal‘s Nick Timiraos revealed to MHProNews, Watt wrote, “I continue to believe that conservatorship is not a desirable end state and that Congress needs to tackle the important work of housing finance reform. In the meantime, however, you can be assured that FHFA will continue to fulfill its responsibilities to manage the conservatorships of the Enterprises in a safe and sound manner and in accordance with our statutory responsibilities.” ##

(Photo credit: Associated Press/Jacquelyn Martin–Mel Watt, FHFA Director, at his swearing in)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J Silver to Daily Business News-MHProNews.

Singapore Investors Turn Sights on Yes! Communities for $2B+

June 28th, 2016 Comments off

yes_communities_logoMHProNews has learned from The Wall Street Journal that Singapore’s sovereign wealth fund, GIC, is in talks to acquire Denver-based YES! Communities from private-equity firm Stockbridge Capital Group for over $2 billion. Spurred by investors who are seeking to find sources of higher yield in a world of low interest rates, GIC would obtain an initial yield of just over six percent, while many top market trophy properties currently return less than five percent. YES! owns or operates 178 manufactured home communities (MHCs) in 17 states.

In recent similar transactions, as MHProNews reported here March 16, 2016, Sun Communities, Inc. acquired the 103 manufactured home and recreational vehicle sites of Carefree Communities, Inc. from Centerbridge Capital Partners for $1.68 billion, while NorthStar Realty Finance Corp. agreed to sell its 135 MHCs to a property fund managed by Brookfield Asset Management Inc. for $2.04 billion, as MHProNews reported here.

The demand for acquiring MHCs has increased as investors realize there is a limited supply—local governments are reluctant to license more MHCs because of the stigma that is still attached to MH communities, and also because they do not produce nearly as much in property tax as other types of real estate development. Additionally, costs are minimal in operating an MHC, and residents tend to stay much longer than, say, tenants in an apartment building.

Well-capitalized private-equity and publicly traded REITs are eager to acquire these properties, invest capital on cosmetic or deferred maintenance items, and realize improved performance [of] the properties typically within the first two years of ownership,” Paul Adornato, an analyst with BMO Capital Markets, said in an email.

In late 2014 GIC acquired IndCor Properties from Blackstone Group LP for $8.1 billion. IndCor is one of the largest owners of industrial space in the nation.

Similarly, the Kwee family of Singapore is helping finance luxury condominiums next to New York’s Museum of Modern Art. ##

(Image credit: YES! Communities)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J Silver to Daily Business News-MHProNews.

Existing Home Sales in U. S. Rise to Highest Pace in Nine Years

June 22nd, 2016 Comments off

sold home  mattheafeyWith interest rates remaining low and unemployment slowly falling, U. S. existing home sales hit their highest pace in nine years last month, as sales rose nearly two percent from April to May to a seasonally-adjusted annual rate (SAAR) of 5.53 million, according to data from the National Association of Realtors (NAR).

MHProNews has learned from therealdeal May’s sales volume rose 4.5 percent over the same period last year, the fastest pace in nine years.

Reaching the highest median ever recorded, The Wall Street Journal reports the median sale price for an existing home jumped 4.7 percent from a year earlier to $239,700. The NAR forecasts the pace of existing home sales may rise three percent this year.

Meanwhile, the inventory of homes for sale continues to trail demand—there were 2.2 million existing homes on the market at the end of May, a drop of 5.7 percent from a year ago. Says the NAR’s Lawrence Yun, We have a tight inventory situation—whatever is coming on the market is moving very fast.”

Meanwhile, in April the sale of new, single-family homes rose by nearly 17 percent over March, the fastest pace since Jan. 2008. ##

(Photo credit: mattheafey)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J Silver to Daily Business News-MHProNews.

Just as CFPB’s Authority is Challenged, it Binges on Big Ad Dollars,

June 14th, 2016 Comments off

consumer_financial_protection_hq_in_D._C.__their_creditCoinciding with Republicans and business groups hollering for the head of the Consumer Financial Protection Bureau (CFPB) to be a five-person commission instead of a single director, make the agency’s funding in some way subject to congressional oversight, with lawsuits challenging its very authority, the CFPB is pitching a substantial advertising campaign to promote its mission to the public.

So far in fiscal 2016 it has spent spent $15.3 million on internet advertising, nearly twice as much as it did in advertising for all of 2015. The ads are designed to help consumers do comparative shopping for financial products like mortgages, student loans and retirement plans.

The five-year-old agency spends a greater percentage of its budget on advertising than almost any other government agency. It has devoted 2.5% of its budget this year to ads, the second-highest level among all federal departments and comparable regulatory agencies for 2016 to date, according to what The Wall Street Journal tells MHProNews based on its review.

During the past three years, only the National Highway Traffic Safety Administration, the Food and Drug Administration and the Peace Corps have spent more than two percent of their budget on advertising. Most departments and agencies spend well-below one percent.

Although the advertising firm that got the contract, GMMB, Inc., had to win it through competitive bidding, it is the same firm used by the presidential campaigns of Barack Obama and Hillary Clinton.

The CFPB is a new agency with a mission and mandate that requires direct engagement with American consumers,” spokeswoman Moira Vahey said in an email. “We are using all available channels to engage the people we serve.”

Currently, the CFPB director can only be removed by the president for cause. ##

(Photo credit: Consumer Financial Protection Bureau’s headquarters)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J Silver to Daily Business News-MHProNews.

CFPB Hammered over Abuse of Power

April 14th, 2016 Comments off

consumer_financial_protection_bureausteve rhode slas get oug of debt org__kicks_aAs housingwire tells MHProNews, in the opening rounds of the legal battle between PHH and the Consumer Financial Protection Bureau (CFPB) being heard in the U. S. Court of Appeals for the District of Columbia Circuit, one judge questioned the authority of the CFPB in general, and that of Director Richard Cordray in particular, noting the concentration of power in the director’s position.

In August, a D. C. Circuit Court issued a stay on a ruling by the CFPB’s director to fine mortgage services company PHH $109.2 million for violating the Real Estate Settlement Procedures Act by accepting kickbacks attached to loans made before July 21, 2008. However, Administrative Law Judge Cameron Elliott ruled attached kickbacks should be applied to loans made after July 21, 2008, amounting to $6.5 million. PHH petitioned a three-judge appeals panel which then issued a stay of the fine.

According to The Wall Street Journal, Judge Brett Kavanaugh called the structure of the CFPB “very problematic” that a government official could unilaterally overturn a financial practice that had been acceptable for years. “You are concentrating huge power in a single person and the president has no power over it,” he said. The court has an underlying assumption that if a practice is widespread, those participating must think it is acceptable under RESPA.

While the ruling from the panel is expected to be issued in several weeks, this is the first in a salvo of charges against the CFPB that is so far successful in challenging its all encompassing power.

Jennifer Lee, a former CFPB enforcement attorney and now a partner at the international law firm Dorsey & Whitney, stated,The D.C. Circuit was hostile towards the CFPB’s arguments on statute of limitations, separation of powers, constitutionality of the agency, penalty calculation, and the CFPB’s interpretation of the Real Estate Settlement Procedures Act when it comes to defining a kickback.”

The judges questioned how a government entity with such sweeping, unchecked powers can be held accountable to the people it is supposed to serve. In this instance with PHH, the kickbacks for the referrals did not alter the ultimate cost to the consumer.

Said Lee, “At a minimum, the agency may need to revisit its RESPA enforcement program and scrub its investigations docket to parse out actual harm versus theoretical harm cases.” ##

(Image credit: letsgetoutofdebt/Steve Rhodes)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

Longer Permit Processing Times Adding to Costs

March 9th, 2016 Comments off

home planning     theatlanticcities  creditAccording to constructiondive, developers are saying that building permit processing time has increased from four months in 2011 to seven months in 2015, reports the National Association of Home Builders and The Wall Street Journal (wsj).

In more active markets, like California and Florida, the American Institute of Architects (AIA) says the wait can be as long as six to eight months, up from two to three months. Permitting offices laid off many staff personnel during the recession and have been overwhelmed by the number of new permit applications, reports wsj.

Last summer the Denver building department was so overwhelmed projects took three times longer than usual to review. One problem resulting from the permit logjam is builders are having to incur more staff and other expenses during the wait time, which drives up the final price of each project. Denver builder Jared Phifer told wsj the problem is so severe it is almost leading to bankruptcy.

Since last summer Denver has beefed up its permitting program with new software and the addition of staff to handle the uptick in permit applications. ##

(Image credit: theatlanticcities)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

Home Builder Sentiment Remains Steady at 60

January 21st, 2016 Comments off

house building  comstock premiumAccording to The Wall Street Journal, the National Association of Home Builders (NAHB) reports the gauge of home builder sentiment in the U. S. remained at 60 from December, where any number above 50 indicates builders are positive about the single-family home market.

Economists who were surveyed by wsj anticipated the gauge to hit 62 for Jan. Dec.’s index was revised downward one point to 60, a drop from 62 in Nov. and from record-high 65 in Oct.

NAHB Chief Economist David Crowe said the reading shows the “economic outlook remains promising, as consumers regain confidence and home values increase, which will help the housing market move forward.”

Low interest rates and rising rents historically have led to more new home sales, but even though employment is rising, wages have remained relatively static, which translates into would-be homebuyers cannot afford to save enough for a down payment, especially with home values rising.”

As MHProNews understands, in Oct. 2005 the index measured 68 but had fallen to 31 within a year. ##

(Photo credit:comstockpremium)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

CFPB based Car Loan Lawsuits on Information it Knew was Bogus

December 15th, 2015 Comments off

consumer_financial_protection_bureausteve rhode slas get oug of debt org__kicks_aA bipartisan House supermajority has turned back the Consumer Financial Protection Bureau’s (CFPB) auto loan rules after discovering the agency was guessing the racial identity of auto borrowers and filing suit against the auto dealers for discrimination in lending, based on who they thought was a minority and who they thought was not.

The Wall Street Journal says after realizing their methodology was inaccurate, they then tried to cover it up. A memo from May 2013, prepared for Director Richard Cordray, said as long as information never got out about how they were guessing ethnicities of borrowers, “our internal methodological deliberations will not be discoverable,” as in, the law-abiding taxpayers being sued will not learn the false basis for the legal action. Seeking several hundreds of millions of dollars in settlements, and smearing reputations is no small matter either.

The Nov. 2014 case against Honda Finance and others was authorized by Cordray even after a lender informed the agency that using the CFPB’s proxy methodology on borrowers whose racial identity was known, only 54 percent of those identified as African-American borrowers were, in fact, African-American.

Having been stalling on House requests for information, the bureau initially said they could not verify the authenticity of the document, and, as wsj tells MHProNews, says, “A week later the bureau was still giving us the same story, without producing any evidence to suggest the documents aren’t legitimate. The bureau is doing further damage to its credibility—if it had any left.” However, banking committees are seemingly in no hurry to act.

The wsj article closes: “This illegal guessing game of name-that-race underscores how much antidiscrimination law has become a political shakedown, and how the consumer bureau is a lawless body that needs to be reined in if it can’t be eliminated.” ##

(Image credit: getoutofdebt.org/Steve Rhodes)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.