The Brawler is impressed that Wisconsin's right-wing political establishment -- despite soaring unemployment and mounting bankruptcies -- is dead-set against a bill that would ensure employees would get paid for the work they've done if their employer closes or goes bankrupt.
You have to admire the conviction.
From the Milwaukee Business Journal:
The 2009 state legislative session has begun with the introduction of the Employee Wage Protection Act.
The act would ensure that employees are paid the wages they’ve earned if their employer goes out of business or declares bankruptcy, said state Sen. John Lehman (D-Racine), who authored the bill.
The bill, which needs to go to committee before it can be considered on the floor, would give “super priority” to liens for unpaid, earned wages.
Shockingly, the right believes the bill would kill capitalism in Wisconsin. They're just having trouble agreeing on why.
Take this impressive piece of idiocy from Owen Robinson:
The real effect of this will be to kill businesses faster. If you are a business that is struggling, what do you do? You borrow money to either invest in something to spur the company or even just to pay the bills until things turn around. Who is going to loan money to a company on the verge of bankruptcy when they know that they will be last in line if that company goes bankrupt? Only fools.
Let me help a brother out:
The real effect of this will be to kill businesses faster. If you are a business that is struggling, what do you do? You borrow money to either invest in something to spur the company or even just to pay the bills until things turn around. Who is going to loan money to a company on the verge of bankruptcy
when they know that they will be last in line if that company goes bankrupt? Only fools.
If you are a business that is "on the verge of bankruptcy" "what do you do?" Deal with a procession of creditors coming for their money before you go under. They are unlikely to believe that investing in "something" will turn the business or extend more credit if you're already unable to handle your operating costs. Businesses that are "on the verge of bankruptcy" are generally avoided like the plague. Better to lend to a company after it's in Chapter 11 than before.
Meanwhile, Christian Schneider is positive that it won't be businesses near the end that will be hurt -- it's start-ups.
The wage claim lien bill will make it more difficult for banks to loan money to business startups, if there’s less certainty they’re going to be paid back if the business hits a rough patch.
God, that's a terrible sentence. The thinking behind isn't much better. First, it's not as if banks are wildly generous in lending to startups anyway. Second, almost by definition, the size of a wage lien for a young company is going to be small and an acceptable risk. And, as liberal squish dad29 notes:
If the borrower is in that much trouble, seems to me that the banker has a due-diligence thing to worry about long before it got to 30 days’ past-due on wages.
The Brawler concedes that it is possible that a wage claim lien law would make bankers more conservative in their lending standards (though of course if they're too conservative, others will move in) or charge higher rates. That said, he has a hard time imagining bankers walking away from the commercial lending business. Or are they just going to put their money in T-Bills?
In any event, the Brawler is astonished that conservatives who consider taxation to be theft have no problem with workers being denied money that they have earned. He looks forward to seeing what Republicans are going to stake their future on killing this bill (the Brawler suspects there'll be a compromise with the current $3,000 cap raised, for whatever that's worth).
* There are exceptions if there's upside potential is high, but these cases would unlikely be derailed if the downside risk was taking a haircut equal to unpaid employee salaries.