In Alabama and the nation, the economy is slowly moving again – but everyone across the political spectrum agrees we need the economy to grow faster. Yet there is sharp disagreement on how to jumpstart economic growth. Nationally, politicians like Bernie Sanders offer a vision of a government-centered society where businesses and individuals are heavily taxed to pay for social welfare programs.
I believe unleashing the ingenuity of the American worker is key to achieving economic growth. The drive of the immigrant janitor to provide a better life for his son, the sweat of the farmer’s brow, and risks taken by small business owners are what make our economy thrive. Sadly, too many politicians think that government mandates and regulations are the answer.
During the legislative session that concluded in May, Alabama Senate Republicans passed several measures that will encourage economic growth.
In response to the Birmingham City Council’s misguided decision in February to raise the minimum wage level to $10.10, Senator Jabo Waggoner and I helped pass the Uniform Minimum Wage & Right to Work Act. This bill prohibits local governments from establishing their own minimum wage standards. It also sets the federal minimum wage level ($7.25 per hour) as Alabama’s standard.
Requiring businesses to pay an artificially inflated minimum wage of $10.10 would lead to fewer job opportunities, especially for young people starting their careers. Further, a patchwork of minimum wage levels would create administrative headaches for businesses forced to deal with dozens of minimum wage laws across Alabama.
The Legislature also passed a constitutional amendment affirming Alabama as a right-to-work state. In certain situations, unions may still have a beneficial role to play in our economy, but employees should never be forced to join a union as a condition of employment. I hope you will join me in voting for this constitutional amendment in November.
Health care costs continue to rise as the grandiose promises of Obamacare have failed to materialize. One innovative way to cut health care costs is to encourage contributions to Health Savings Accounts (HSAs), which are tax-advantaged (the federal government doesn’t tax HSA contributions), portable (may be spent at any health care provider) and roll over from year to year. Alabama, California, and New Jersey are the only three states left that still tax HSA contributions.
I helped sponsor and pass legislation to remove the state tax on HSA contributions. We should encourage people to save money and take control of their health care decisions, not penalize folks for saving for health care emergencies, which are too often shouldered by hospitals and other consumers.
Most regulations on business, like Obamacare, stifle economic growth, but some regulations are needed to protect consumers, especially in fields that are highly complex. For example, I don’t think anyone is favor of doing away with medical boards or food safety inspectors. We want to know our physicians are properly trained and our food is safe to eat.
That is why I have pushed for common-sense regulation of payday lenders. People in desperate financial straits need access to loans, but too often lenders charge annual percentage interest rates (APR) of over 400% for 14-day payday loans and up to 300% APR for title loans.
Payday lending reform stalled in the Legislature as the session ended. But I will continue to support lowering the interest rate payday lenders can charge. We have to strike a balance between protecting consumers from exorbitant interest rates and yet recognizing that payday lenders are taking a huge financial risk in lending money to people with low incomes and bad credit histories.
Slade Blackwell represents Jefferson, Shelby, and Talladega Counties in the Alabama Senate. He is Chairman of the Banking and Insurance Committee. Follow him on Twitter: @SladeBlackwell