June unemployment figure drops, but manufacturing jobs lag

Editor’s note: These were originally prepared for my American Certified Sausage Grinder blog as two different pieces but not used there. It’s a good opportunity to introduce readers who haven’t gone there to check it out (although I have to ask – why haven’t you already?) to the somewhat different style I employ there. Think of it as a sampler plate.

Last Thursday – a day early due to the Independence Day holiday – the Bureau of Labor Statistics announced the June unemployment rate had decreased to 6.1%, which is the lowest rate in nearly six years. A total of 288,000 jobs were added in June; in addition, an extra 29,000 jobs were added in adjustments to April and May’s figures.

All this should be good news, but manufacturing jobs only increased by 16,000 over the period. This brought the ire of Alliance for American Manufacturing president Scott Paul, who complained that:

While the low-wage recovery progresses full bore, the June jobs report shows that high-wage job growth is at a standstill. Manufacturing accounted for only 5.6 percent of job growth in June, far below its weight in the wider economy. Construction job growth was even slower.

Looking for a reason why? It’s all about public policy. Our growing trade deficit with China, currency manipulation by overseas competitors, and a paucity of investment in infrastructure are leaving factory jobs at a virtual standstill. President Obama’s vision of creating 1 million new manufacturing job during his second term is way off track.

According to AAM, the total manufacturing job growth over Obama’s second term stands at 156,000 – far short of the pace necessary to achieve a million new jobs before 2017. That pessimism extends to the public at large, as a Rasmussen Poll indicated just 23% of Americans believed the unemployment rate will be lower next year.

On the other hand, writing at the Shopfloor blog, economist Chad Mowtray of the National Association of Manufacturers took a more optimistic view, calling the report “mostly positive news.” And while he stressed that wages were increasing at a solid clip, he also pointed out that labor force participation rates were still a source of worry.

Strangely enough, a report on exports for May also came out Thursday, as the Commerce Department announced U.S. exports of goods and services hit a record $195.5 billion high. Many in the steel industry – as well as dozens in Congress – are awaiting next week’s determination on possible dumping penalties against South Korea, while other exporters are lobbying for Congress to act on re-authorization of the Export-Import Bank before the September 30 deadline. Going forward, these determinations could affect future unemployment numbers as well as prospects for those who want to make things in America.

On a state level, though, the news was better.

In order to make things in America, workers are needed. And recently released employment data from the Bureau of Labor Statistics shows manufacturing employment was up year-over-year in May in 44 of the 50 states. (Page 17 here.)

With all the winners, though, it may be time to ask about the losers. The six laggards in the field were Alaska (down 1,800 jobs), California (down 1,400 jobs), Georgia (down 900 jobs), Kansas (down 1,700 jobs), Maryland (down 600 jobs), and North Carolina (down 300 jobs).

Alaska is an interesting case as it reflects in part the fortunes of its oil industry – just a few short years ago it was the only state gaining manufacturing jobs long-term over the decade from 2001-11. But a steady decline in oil production has hampered its local economy, and the state lost nearly 13% of its manufacturing jobs over the last year.

The other significant loser is Kansas, but a regional university’s study predicts an upswing in manufacturing employment over the next three months.

Out of the six where manufacturing employment declined, there is no clear political or labor pattern which can be discerned. Four of the six states have legislatures controlled by Republicans, but that’s fairly proportionate to the 28-17 advantage Republicans have overall. Three of the six are right-to-work states, which also reflects the close 24-26 split between our national composition of right-to-work vs. forced unionism states.

Conversely, the states which did quite well over the last year tended to be the ones bordering the Great Lakes. Minnesota (up 4,400 jobs), Wisconsin (up 1,400 jobs), Illinois (up 900 jobs), Indiana (up 2,900 jobs), Michigan (up 8,500 jobs), Ohio (up 5,800 jobs), Pennsylvania (up 3,100 jobs), and New York (up 600 jobs) all benefited, with Michigan’s first-in-the-nation increase by itself making up for the six states which lost workers. It appears a healthier auto industry is leading the charge.

Rasmussen: Hogan trails by 13

I’m breaking into my normal Sunday to bring you the latest polling on this race.

While it’s not precisely what Maryland Republicans are hoping for, there is a little crack as the Hogan electoral door is slightly ajar. Bear in mind that a projected matchup polled by the Washington Post last month had Brown leading 51-33, so his support is retreating while Hogan’s has grown. Perhaps people are realizing what I wrote last month on Brown’s lead:

It’s a counter-intuitive result when you look deeper into the poll’s questions to find that Democrats want the next governor to lead the state in a different direction from Martin O’Malley by a 58-34 margin. Yet they have given Anthony Brown a significant primary lead and would presumably back him in the general election.

Then again, it’s very rare that Maryland votes in its own best interests anyway – they would rather genuflect to an all-encompassing government which distributes crumbs in an arbitrary and capricious manner, depending on the favored status of prospective recipients, than breathe the air of freedom and opportunity for all. But there’s always a first time, and as for the rest some areas of the state still have common sense.

So Hogan has picked up a little bit, but more importantly Brown has been driven under the 50% mark. Conventional wisdom holds that an incumbent under 50 percent is in trouble, so this should be added motivation for conservatives to work for an upset.

AC Week in review – July 13, 2014

I had a varied palette of posts last week at my Sausage Grinder blog, touching on such diverse subjects as immigration, business climate, and entitlements. Segregated from each other, they may not make as much sense to the whole but the idea behind the site is to look at regulatory aspects and how they affect the practice of “made in America.”

Let me begin by noting that my AC cohort Ed Braxton may have stepped on my toes a little bit, but his contribution was a nice look at the sheer volume of regulations businesses in our nation have to deal with on a federal level. One Congressman is trying to SCRUB all that away. (The bill text is here.)

Those regulations, at all levels of government whether federal, state, or local, are chipping away at the perception business owners have about the local business atmosphere. For the third consecutive year, the website thumbtack.com partnered with the Kaufmann Foundation to gauge business friendliness – and the results were an overall disappointment. With states like Maryland and Delaware already shut down legislatively for the year, relief is nowhere in sight.

Meanwhile, with the number of Congressional calendar days for the 113th Congress dwindling to a precious few, there’s really not much action we could expect on the federal level; moreover, that time limit will also stop us from addressing entitlements like Social Security. I thought the “big, smelly elephant in the room” characterization was apt, particularly as we’ve let it linger for nearly a decade without a serious crack at reform.

There is an added bonus this week. I noticed two pieces I sent in over the Independence Day holiday weren’t picked up – not sure if my editor missed them because he was out or just what happened. (I do a lot of AC work on the weekends, so it should have been nothing unusual.) Since they actually relate with each other, and I don’t believe in letting good writing go to waste, I will post them – slightly modified for flow, of course – here this evening.

And don’t worry – my editor has three new pieces I wrote yesterday, on hot-button issues, to help fill the AC site. They should be up this coming week.