A Bad Policy

Grind for January 27th, 2019
“Well done is better than well said.”

– Benjamin Franklin

Getting Close

The Headline

FTC expected to fine Facebook over privacy violations

The Grind

Facebook has suffered widespread criticism over the past few years – most notably related to its role in the the Cambridge Analytica scandal.

Cambridge Analytica is a data firm that in 2016 used a quiz to improperly obtain data on millions of Facebook users without their content.

The data was used to build voter profiles in the interest of Donald Trump’s presidential campaign.

The scandal led to Congressional concern, a multi-day testimony from CEO Mark Zuckerberg, and a privacy investigation by the Federal Trade Commission (FTC).

The Details

The FTC’s investigation, which is set to conclude by the end of the month, seeks to determine whether Facebook’s decision to share information with Cambridge Analytica broke a 2011 consent decree.

The decree requires Facebook to obtain users’ consent before sharing their information and to maintain a privacy program. If the FTC finds Facebook in violation of the decree, the social media giant could be hit with a fine exceeding $22 million.

In the meantime, Facebook is still working on launching a new privacy feature Zuckerberg promised us last May.

Bad Idea

The Headline

Restaurants in New York respond to minimum wage hike by cutting staff

The Grind

New York City was among several jurisdictions to start the New Year with a minimum wage hike.

Now, some of the workers who campaigned for the increase are out of a job.

Starting December 31st, the minimum wage in some areas of New York City increased from $13 to the coveted $15. It was the third hike since 2016, when the minimum wage jumped to $11 an hour.

The new policy, which applies to restaurants with at least 11 employees, has been particularly difficult for businesses who depend on tips to supplement lower wages.

According to reports, 75% of restaurants in the area are planning to reduce employee hours. Nearly 80% will increase menu prices and 47% will cut jobs.

The Details

“We lost control of our largest controllable expense,” explains restaurant owner Jon Bloostein. “So in order to live with that and stay in business, we’re cutting hours.”

To maintain profits, Bloostein also had to alter employee start times, increase menu prices, and stop using hostesses.

“As a result…it will cost more to dine out,” says Bloostein. “It’s not great for labor, it’s not great for the people who invest in or own restaurants, and it’s not great for the public.”

The same negative effects have been observed in Seattle, which in 2014 became the first city in the US to adopt the $15 minimum wage.

For New York, the problems will only get worse as the policy expands to cover the entire city (and potentially the entire state).

The minimum wage for small employers in NYC jumped from $12 to $13.50 last month and will hit $15 by the end of the year. The minimum wage in Long Island increased from $12 to $13 and will reach $15 by 2021.

Did you know… Honeypot ants are a unique insect that use their own bodies as living storage pots of honey.