The magic potion?

One little piece of Larry Hogan’s FY2017 budget proposal caught my eye, but I want to begin with a little reaction to the State of the Union show from my favorite manufacturing advocacy group, the Alliance for American Manufacturing and its president Scott Paul:

President Obama cited economic progress in his State of the Union address, and he also noted the need to address income inequality. If he wants to address this, he need look no further than manufacturing, which had its worst year in 2015 since the Great Recession.

While the president was right to highlight economic progress, he missed an opportunity to address some of the core concerns that are holding back manufacturing. Yes, manufacturing has added nearly 900,000 jobs over the past six years, but that represents less than 40 percent of the factory jobs lost over the recession. Only 30,000 jobs were created in 2015.

Keep that in mind as you read on, particularly the income inequality part. So I noticed a particular piece of news today, and after a bit of searching I found that Baltimore Sun writer Erin Cox included this in a story on Hogan’s tax plan:

Hogan also proposed granting a 10-year corporate tax income break for manufacturing companies new to the state who open in Western Maryland, Baltimore and the lower Eastern Shore, areas where unemployment is dramatically higher than the rest of the state.

“We’ve lost 28 percent our manufacturing base because other states were stealing our manufacturers,” Hogan said. “It was like spearing a fish in a barrel. It was too easy. We’re trying to bring back the manufacturing base because there are a lot of hard-working people in the heartland of Maryland who want to work.”

Hogan’s manufacturing tax amnesty would extend to employees of those businesses. Workers earning less than $65,000 a year would be exempt from state income taxes for a decade.

So let’s say XYZ Widgets opens a manufacturing plant in Salisbury. Not only would they get a tax break from the state of Maryland for a decade, so would the workers who make less than about $30 an hour be exempt from paying Maryland state income tax. (This would probably come as a refund once the taxpayer files his or her return.) I will cheerfully admit this goes against my grain of not supporting targeted tax cuts – particularly since it’s micro-targeted to maybe a few thousand taxpayers at most over the ten-year period – but it is an idea for the hopper that could be successful.

In fact, it extends a practice of states and municipalities granting a tax abatement to chosen entities to convince them to set up shop there. We have enough of a knowledge base now to see how these programs work for large-scale employers such as automotive assembly plants – here is one example from South Carolina, where BMW set up shop over two decades ago.

The other fly in the ointment, though, is determining what happens when the decade is up. Surely it’s the hope of Hogan and his economic development team that these companies would stay, but if not it’s the problem of his successor. My suspicion is that this program will maintain the exemption for the workers, because let’s say you’ve put your ten years in at XYZ Widgets and have become accustomed to that big state refund check. When those sands run out there will be a lot of upset taxpayers who just saw their state tax bite increase by up to $3,000 depending on income and deductions.

There’s also the question of timing. If we are to assume that the 10-year clock begins to tick for a company when they set up shop, we may see a cottage industry of new employers taking advantage of workers who are on the eighth or ninth year of their term of employment and hiring them on. Not only does the new employer poach skilled labor from the older competitors, the older companies won’t have the incentive of being able to work tax-free anymore. Conversely, a blanket starting date means that the program will work well for years 1 through 5, then begin to peter out unless extended.

And then there’s the job creation aspect that Scott Paul and AAM touch on above. Oftentimes with the use of tax incentives a manufacturing job isn’t so much created as it is transferred from somewhere else, and this particular proposal is specific to companies new to the state. So we may see a zero-sum game being played, particularly in Western Maryland and the Eastern Shore as companies simply move a few miles from Delaware, Pennsylvania, or West Virginia to take advantage with many of the same workers staying on. Locally, we will see this in reverse as Perdue moves some of its operations in the next few years just across the state line to Delaware – it makes Delaware’s bottom line look a little better and takes a little bit from Maryland, but the workers are just driving a different distance and will stay in this area. (Those who live in Maryland and work in Delaware, though, will have the joy of filling out two state tax returns.)

Overall, this is an interesting idea but there are a number of ways I’ve already found to play devil’s advocate with it. Lord knows ours is a region of the state which could use an economic shot in the arm, though. I still think the complete elimination of the corporate tax (which is also discussed briefly in the South Carolina study I referred to earlier) is the better play as a job creator overall.

And lastly, I’m sure Democrats will be whipping up their base in the Capital region by pointing out they’re not included in this deal. I guarantee that if this program works for the areas with high unemployment there will be a bill within the first year or two adding the rest of the state to the mix (in the interest of fairness, of course.)

Since it’s not clear what the vehicle for attempting to bring about this change will be, I can’t track this proposal to see just what progress it makes. Perhaps it will create a split in the majority party since Baltimore City will be a beneficiary and they’ll back the Republicans who follow the governor to see this through with a narrow victory.

The quality of Salisbury’s life

January 8, 2016 · Posted in All politics is local, Business and industry, Delmarva items, Politics · Comments Off 

One of the talking points that Salisbury mayor Jake Day has continually made about bringing jobs to Salisbury is that we need to improve our quality of life. Perhaps I’m oversimplifying the argument, but if we have a quality of life attractive to younger workers they will come here and create the jobs – or so the thinking goes.

So it was interesting that a few weeks back I received an e-mail from a company called LawnStarter. The reason I received it was that I have used business-related survey data from Thumbtack.com in the past and this entrepreneurial outfit had created something they called their Quality of Life Index. (Naturally, the company specializes in assisting lawn care startups by bringing customers and businesses together.) As a state Maryland ranks 13th out of 50, but the lone metropolitan area considered (Baltimore) ranked 73rd out of 101. (We in Maryland surely had assistance from 9th-ranked Washington, D.C. though.)

You may ask how they come up with this index – well, let them explain it:

The index is based on six quality-of-life factors analyzed by LawnStarter and borrowed from The Economist — GDP (economic output) per capita, average life expectancy, divorce rate, unemployment rate, geographic location (latitude) and male-female income equality. The Economist considers these factors to be good barometers for quality of life.

Based on some of the factors cited I suspect Salisbury would be near the bottom of the city list. However, they may not be at the very bottom because the lowest seven cities (and nine of the bottom ten) share one of two things in common:

  • They are in California (Sacramento, Riverside, Fresno, San Bernardino, and Stockton) or
  • are in close proximity to Lake Erie (Buffalo, Toledo, Cleveland, and Detroit)

Memphis is the outlier to that group, with Detroit occupying the 101st and bottom position.

However, Salisbury doesn’t have a particularly high GDP per capita or low unemployment rate, nor is life expectancy that great compared to other places. As a state Maryland is certainly aided by its close proximity to Washington, D.C. but Baltimore’s far lower rating may be closer to the conditions we have to endure here. It could be argued that our area has several of the same pitfalls that plague inland California (Sacramento, Stockton, et. al.) – chronic high unemployment in an area best known for agriculture due to a temperate climate. The agricultural base contributes to the low per capita GDP while the high unemployment eventually manifests itself in a shorter life expectancy thanks to crime and lack of preventative health care.

Short of a Bill Gates suddenly showing up and showering the area with wealth, these factors will remain common to our area. Unfortunately, the few assets we seem to have are difficult to leverage into productive careers. Most of our more lucrative jobs have to do with health care and government as opposed to STEM-based or manufacturing positions, which add more value and GDP. The exceptions to this are having the headquarters of Perdue in Salisbury and the Wallops Island NASA complex; while the latter is a government installation there are a number of private companies which use their facilities. While it’s almost 50 miles away, Salisbury is the closest city of reasonable size to the remote installation on Virginia’s Eastern Shore.

But those two entities need to be joined by many others to truly bring a better quality of life to Salisbury. To use a good local analogy, it’s like a chicken-and-egg question: does the quality of life come from good jobs or do jobs spring from a good quality of life? I believe the former is true, while our mayor seems to side with the latter. Over the next few years, we will see who is correct in our local case.

When Salisbury arrives

January 6, 2016 · Posted in Business and industry, Delmarva items · Comments Off 

There are news stories that turn out to be much ado over nothing, and recently the Salisbury community has been roiled by such a story. To some, it’s a scandal and an outrage that our little community will once again be denied…a Cracker Barrel.

For some unknown reason, ever since I have moved here it’s been the dream of some for that restaurant chain - which has over 600 locations around the country including those on Kent Island and Rehoboth Beach - to open one in Salisbury. In general, the company opens their locations within sight of a major highway, so the first rumor was that there would be one built where the old Zia’s was torn down just north of the junction between U.S. 13 North and U.S. 50, which is perhaps the true crossroads of Delmarva. That interchange is close by the Centre of Salisbury, a regional enclosed mall.

After the former Zia’s parcel went by the boards (to become the location for a second Chipotle restaurant in Salisbury) the attention and gossip turned to a vacant parking lot outside the Centre of Salisbury in front of a shuttered J.C. Penney store. But that option has also been rejected thanks to one of the anchor tenants at the mall, according to this published report. Thus, local residents are up in arms.

I don’t make a living as a restaurant critic, but in my Ohio days I had eaten at Cracker Barrel perhaps a half-dozen times because I lived relatively close to the junction between I-75 and the Ohio Turnpike (definitely major highways) and there’s a Cracker Barrel close by that exit. While my ex liked it, to me Cracker Barrel was nothing special – unlike Buffalo Wild Wings, for which I was thrilled when they finally made it here from Ohio. (Admittedly, BWW has lost some of its charm since it went national - I go back to when it was called BW-3.)

It also amuses me that there are people who are pining for Cracker Barrel to come in on the one hand, but lament that there are no good local restaurants to eat at. Obviously Salisbury has a large enough market base that dozens of national and regional chains are located here, but they mainly tend to congregate around the Centre of Salisbury or Salisbury University. Located in other parts of town, particularly downtown, are a number of local business we’re continually being told we need to patronize. “Shop local,” everyone says. So why do we need a Cracker Barrel?

Of course, the answer is obvious since there’s apparently a pent-up local demand for average food and overpriced knick-knacks. But to go on for the better part of ten years? People were excited to get a Famous Dave’s here, but that folded up in short order.

If you ask me, the best spot for Cracker Barrel (or similar tourist-driven enterprises) is the parcel of land close by Perdue Stadium that was once slated for mixed-use development before the Great Recession tried to wipe the local economy out. It’s already annexed into the city, infrastructure can be added easily, and the site has major highway access and visibility. Another possibility is a parcel farther west on U.S. 50 recently purchased for development, according to the Daily Times.

Whatever the case may be, in the interim those who really like Cracker Barrel will have to drive an hour or more to get their fix.

A look ahead: 2016 in Wicomico County

After doing this the last two years one would think I would be an expert at dissecting what will go on over the course of a year, but in this case my crystal ball is a little bit cloudy. Perhaps that’s because things are looking up for a change.

I went to the state Department of Labor, Licensing, and Regulation website and downloaded some figures which reflect great job creation news - particularly in the latter half of this year. Since June, Wicomico County employment figures are running between 1,300 and 1,800 jobs higher than the corresponding month of 2014. Conversely, in 2014 we never ran more than 753 jobs ahead of 2013 and by the end of last year we actually had fewer employed than the year prior. That downturn carried into this calendar year but by March we had turned the corner.

The growth in the latter half of the year was reminiscent of the boom period of 2004-06, when Wicomico County routinely gained 1,000 or more jobs in every month year-over-year.

So the question will be whether county revenues begin to increase. Unlike the boom of a decade ago, which was fueled by a rapid increase in property values that later translated into increased tax collections, this upturn doesn’t come with rapidly appreciating property values. And there are plenty of bills for the county to pay – two new schools with a third one now placed into the pipeline as well as new facilities for the Board of Elections, increased mandates for education spending and environmental cleanup from the state and federal governments, respectively, and a call from the city of Salisbury to assist them more with fire protection expenses through a more equitable revenue sharing. Certainly it appears that any new money has a number of hands reaching out for it.

Another question regards how well two relatively new leaders will work with each other. It’s fortunate that both County Executive Bob Culver and Salisbury Mayor Jake Day spent a little bit of time on the legislative side of things because it will help them understand the process the other has to go through to get things done. If there’s one thing we have learned from Culver, though, it’s that he’s a man of action who always seems to have a to-do list of improvements he’d like to see. It’s more autocratic than bureaucratic on the county side of the Government Office Building these days. Initial impressions of Day seem to be similar, although he’s made much less of an impact on taking office than Culver did insofar as personnel decisions are concerned.

But there are two key issues regarding education that will be out of Culver’s hands. One is the fate of the elected school board, which is now up to the Maryland General Assembly. The other is the new superintendent that will take over the county schools sometime in 2016. The Board of Education begins the selection process after the holidays – by the way, the county Republican Central Committee will be called upon to retain or replace two GOP members of that body this summer.

Getting around may become a little more difficult next fall as well, as the state will begin replacing 11 bridge decks on the U.S. 13 bypass. It’s a project that’s not supposed to impact summer traffic in 2017 but won’t be complete until 2018.

In comparison to previous years there doesn’t seem to be anything particularly contentious on the horizon - with the possible exception of the proposed large-scale chicken farms Radical Green is already up in arms against - which probably means we’re going to have an interesting year. If we can keep up the pace of job creation, though, eventually the local economy will get back to where it was a decade ago and prosperity takes care of a lot of problems.

Tomorrow I shift my focus to the state as a whole.

Immigration: The SEASON Act and its effects

By Cathy Keim

Second in an ongoing series.

I am using my prerogative to switch to a different immigration topic because a friend sent this Breitbart article and pointed out that Rep. Andy Harris is on the list, as is Senator Barbara Mikulski. As I mentioned before, immigration is such a broad subject that one cannot cover all the angles in just an article or two.

I actually wrote to Andy Harris about the Strengthen Employment and Seasonal Opportunities Now (SEASON) Act (H.R. 3918) back on November 12. I saw him later that day at the Kathy Szeliga event and I asked him about his support for this bill.

He stated that the Obama administration had changed the regulations about the H2B visa program and HR 3918 was merely to return things to the way they were done previously, adding that employers needed the foreign workers to do these jobs that Americans will not do. I asked about the families of H2B workers and he said that they were not allowed to bring their families with them.

But I checked on the United States Citizenship and Immigration Service (USCIS) website and it clearly states that:

Any H-2B worker’s spouse and unmarried children under 21 years of age may seek admission in H-4 nonimmigrant classification. Family members are not eligible for employment in the United States while in H-4 status.

So I must disagree with the Congressman’s assertion. My concern was that if the families enter with the worker, then they will most certainly have an impact on the local economy as the children enroll in school and utilize other social services.

The H2B visa worker may be a boon for the employer, but the rest of the community is underwriting the social service costs for the cheap labor. In addition, we are paying the welfare costs of our unemployed citizens who could be working instead of a foreign worker. The taxpayer is picking up the tab in every direction while the employer is improving his profits.

The employers complain that Americans won’t do these jobs, but it is likely that they would do them if they were paid a fair wage. The employers utilize the H2B visa program to bring in foreign workers to keep the wages depressed.

According to the Society for Human Resource Management:

In a separate final rule, the departments unveiled the methodology for determining the prevailing wage that must be paid to H-2B workers.

(snip)

The Economic Policy Institute’s (vice-president Ross) Eisenbrey expressed disappointment that the rule allows alternative wage surveys to set the prevailing wage. “Employers only use these alternative surveys to ensure that they can pay their workers the least possible amount, rather than using credible and reliable survey data compiled by DOL,” he said, pointing to the seafood industry as an example as having used private wage surveys to justify “paying their H-2B workers wages near the federal minimum wage for grueling work like crab-picking, rather than the higher average wages paid across Virginia and Maryland for similar work.”

Here is a link to information about the changes to the H2B visa program that were put into effect in April of this year.

I also asked Mike Smigiel, who is running against Andy Harris for the First Congressional District seat, for a statement about HR 3918. Smigiel said:

With our real unemployment numbers over 11% and the workforce participation at one of its lowest levels in years we clearly have a workforce that is hard pressed to find employment. The most vulnerable sector of the workforce are youth, legal immigrants, and those with a high school education or less. Record numbers of Americans are living in poverty and surviving on food stamps, it is hard to fathom that Congress would expand the H2-B program to an all time high.

What Congressman Harris failed to address is the fact that those here on the H2-B program can bring their spouses and families in under the H-4 visas. Do you think that the spouses and children of those coming in under the H-4 visa program are not going to be working, going to school, getting sick? These associated costs will be additional burdens upon our already strained economy.

Our first obligation should be to helping our unemployed and underemployed citizens by providing this most vulnerable sector of the workforce work training and providing incentives to employers to hire citizens for the jobs.

It is disingenuous of Congressman Harris to sponsor this legislation since just a few months ago he voted to prohibit American poultry, beef or pork producers from listing the country of origin on their products. This does not benefit the consumer or farm workers but makes it easier for large farming corporations to take their operations overseas where labor is cheaper and there are fewer regulations placed upon their farming operations. Their products can then be sold in the US without any notice that they were not raised here. So thanks to Congressman Harris we may be eating Chinese chickens with American companies’ names on the product.

Once again, I would encourage you to pick up your phone and call Congressman Andy Harris and Senator Barbara Mikulski and ask them to not support HR 3918. Let’s put our own citizens back to work.

Scraping the bottom

Earlier this week the Tax Foundation released its annual State Business Tax Climate Index. Despite Governor Hogan’s insistence on improving business climate and efforts to adopt some of the Augustine Commission’s reforms, Maryland once again has the dubious distinction of being a bottom-10 state.

Yes, that sickening orange color tags us as a state to avoid insofar as business taxes are concerned. In truth, we’ve only dropped one spot from the 2015 index so while we could have made a few minor improvements other states are improving at a faster pace. (Maryland seems to tread water – over the last four years we have oscillated between #40 and #41.) Moreover, we still lag behind all of our neighbors with Delaware again leading the region. The First State maintained its #14 ranking.

There is one important caveat to Maryland’s decline which could push them out of the bottom 10 next year. Late last month Governor Hogan announced a significant cut in the unemployment insurance tax, which is one of the factors (albeit the least-weighted) the Tax Foundation uses to determine its rank order. But other states are trying to push the envelope more quickly by reducing corporate and individual tax rates, something Maryland has talked about but not acted upon. (The Tax Foundation’s weighting process is explained on page 16 of their full report.)

While reducing regulations doesn’t always require legislative approval, the tax nut is a harder one to crack. The requirement to balance the budget means that revenue no longer extracted from corporations and small businesses alike can’t be used for profligate spending. At a time when government getting an increase that’s less than expected brings screams about draconian cuts from the left side of the aisle, heads truly explode when less real money is allocated. Even if you get 97 cents when you used to get a dollar, liberals act as if you just shot their unicorn with a scary-looking AR-15.

There’s a reason I bring up 97 cents as a particular figure. According to the state’s FY2016 budget, the corporate income tax accounts for 3% of the revenue; thus, eliminating it entirely would mean a corresponding budget cut. (We’ll leave aside the obvious competitive benefit to the state, which would eventually attract more business and increase revenue via other means such as income and sales taxes.) While it’s true that having a poor corporate tax ranking doesn’t completely eliminate the good – Delaware’s #50 ranking in corporate taxes only drags its overall rank to #14 – eliminating the tax would make it plain that Maryland is indeed “open for business.”

Eliminating the tax would also eliminate what’s become an annual debate about combined reporting. Proponents of its adoption, mainly Democrats, claim large businesses are not paying their fair share because they use the accounting trick of claiming their income arises from low-tax states. They may make actual profit in Maryland but don’t report it because they have operations in other. more tax-friendly states. The most recent iteration of the idea came last year, with the tradeoff that would have eliminated filing fees for small (less than 10 employee) businesses. In that respect it was a money-loser for the state; however, the research showed in better economic times the effect would be beneficial to state coffers.

Interestingly, Salisbury has a new mayor that epitomizes the opposite end of the chicken-and-egg approach: last week in the Salisbury Independent, Jake Day was quoted as noting:

“Economic development isn’t what it used to be,” he said. “It includes more activities. It’s now about culture. About quality of life issues. The arts and people. Parks, bike trails, bike lanes. And if you don’t get those right, don’t even talk about workforce development and industry and business development efforts, because you have to have those things to attract anyone.”

This portion of Delmarva boasts a lot of natural beauty along its rivers and coastlines, a well-regarded university, and a proportionate share of arts and culture. Perhaps the traditional bricks-and-mortar manufacturing or legacy service industries won’t come to Salisbury, but it’s been obvious over the last ten years that the beauty, academics, and culture isn’t exactly making this a hotbed of economic activity either. There needs to be a more balanced approach to development because it takes a fair amount of money to create and maintain parks, bike trails, and bike lanes – particularly if the money is granted from the state as it often is. We may be competitors to certain other urban areas around the state, but development somewhere else in the state or even another state, depending on the grant source, is paying the lion’s share for the bike lanes to be installed here. (In some cases, local gifts have helped.) Funding will also be required to maintain parks and develop new ones like Pirate’s Wharf along the Wicomico River.

There are thousands who have moved here over the decades as adults, and for the most part they came here for one of two reasons: they came to school or they came for a job. And if they came for school, there’s no guarantee they will stay if jobs or entrepreneurial opportunities aren’t available.

Simply put, Maryland has a long way to go in overcoming the poor reputation they have for growing and attracting businesses. It’s a lot easier for those on the Western Shore to prosper when there’s a ready-made source of confiscated wealth in close proximity. (If all those people had to find honest work Maryland would be just like West Virginia, with high unemployment. Because it’s well away from that honey pot of confiscated largess, the lower Eastern Shore already is in that same high-joblessness boat.)

I learned the other day that the Augustine Commission determined 1/4 of Maryland’s GDP comes from the federal government. If we can rightsize the federal government over the coming decades, Maryland will be negatively affected in what would be of overall benefit to the nation. It’s time to wean our state off the opioid of living off the federal employees and make strides in diversifying our economy. For that reason, making our state more business-friendly simply has to occur.

The manufacturing perspective on TPP

Political junkies know the first Friday of the month will generally bring the unemployment rate and job creation numbers from the previous month. As of Friday, the government told us we were at 5% unemployment for the first time since the Bush years, when economists talked us into a recession. (This was back when tepid job growth actually increased the unemployment rate. Of course, people blamed the president at the time.)

Be that as it may, though, there were no net manufacturing jobs created during the month, a fact which concerned pro-manufacturing organizations like my old friends at the Alliance for American Manufacturing. To quote their president, Scott Paul:

Underneath the euphoria over a good topline employment number is this fact: Manufacturing hasn’t gained a single net job since January. 

That’s terrible news for our economy. The effects of China’s industrial overcapacity can be seen in waves of layoffs in American steel, aluminum, and other manufacturing sectors. This weakness in factory hiring comes at a very inconvenient time for the proponents of the TPP, which analysts predicted will widen our record manufacturing trade deficit. (Emphasis in original.)

Regarding the TPP, the U.S Business & Industry Council (USBIC), an advocacy organization for small businesses, said in a statement that the TPP is full of “special deals” for multinational businesses. USBIC president Kevin Kearns:

The TPP is anything but the free trade agreement it purports to be.  The use of the term ‘free trade’ is simply a codeword designed to attract the support of Congressional Republicans who lurch zombie-like to support anything so labeled, without examining the fine print.

A real free-trade deal could be written on a single sheet of paper, with commitments to remove all tariffs and non-tariff barriers of any kind.

Over at the National Association of Manufacturers (NAM), writer Linda Dempsey demanded a thorough review of TPP’s provisions. All this makes it clear that manufacturers are wary about the effects of this trade deal. I also covered some of the other potential pitfalls on Friday for my weekly Patriot Post piece, which leads me to wonder: just who the heck is for the deal?

Well, actually, NAM is part of a broad coalition of business interests seeking the deal, which makes it less of a Main Street vs. Wall Street issue and mote of a tug-of-war between union interest in protectionism and businesses after free trade. But one question worth asking (as Kearns does) is why we need over 5,000 pages of agreement to clear the trade docket? One can also ponder what benefits we really get as the largest partner by far – it’s not a coalition of equals by any stretch of the imagination, although depending on the source the per capita GDP has been measured slightly higher than ours for partners Australia and Singapore.

If there was ever a case where the devil is in the details, this may be the one. I noted in Friday’s article that time is not of the essence – the 12 nations have up to two years to ratify the agreement, with only 6 (one being the United States) being enough to enable it under certain conditions. (It boils down to we have veto power, and Japan also might depending on the direction of its GDP compared to the dozen as a whole. The Japanese are close to the 15% of total TPP GDP needed to sink the deal if they don’t pass it. By the way, we have a roughly 65% share so we are by far the biggest frog in this little pond.)

The concept of free trade works best among equals. Unfortunately, there aren’t many peers at the level of the United States so you get the complexity of the TPP, which I won’t dare profess to understand. Just on gut instinct I think the acronym KISS is in order here but when it comes to modern government it seems we can only weave tangled webs.

More urban renewal needed

October 29, 2015 · Posted in Business and industry, Delmarva items · Comments Off 

This story came on my radar yesterday, but while I was sitting at home tonight it came to my thinking how our landscape will be affected. Apparently Walgreens and Rite Aid are merging, which means the local landscape that changed when Rite Aid bought Eckerd a few years back will change again.

In my old job I had to visit all of the Rite Aids from Salisbury and U.S. 13 east to Ocean City and from Lewes, Delaware to Exmore, Virginia – 21 in all, including a couple that were built or significantly remodeled during the couple years I stopped by on a monthly basis. In some of these towns and locations the Rite Aid stores moved into former Eckerd locations, leaving the old building just down the road as a vacant reminder. Two in particular, the former Rite Aids on Civic Avenue in Salisbury and in Seaford, have sat empty for about eight years since the two chains merged in 2007.

Now we have the same potential with Walgreens. In the local area they have five stores: two in Salisbury and one apiece in Ocean Pines, Delmar, Delaware, and Laurel, Delaware. Of the two Salisbury Walgreens stores, one sits a block away from a competing Rite Aid while the other is about a mile down Mt. Hermon Road from its respective Rite Aid (which was an Eckerd) – the long-shuttered former Rite Aid I noted earlier sits about halfway between them.

The Walgreens in Ocean Pines is a stone’s throw away from the Rite Aid that was just renovated earlier this year, while the competing Delmar locations sit catty-corner at the intersection of U.S. 13 and Line Road – Walgreens in Delaware and Rite Aid in Maryland. It’s hard to imagine two locations in the small town of Laurel co-existing, either.

Simply put, these communities will soon have a vacant building on their hands. Whether it’s brand new like Ocean Pines would invariably be or an older facility, in many of these cases these are freestanding buildings which few seem to have a use for – hence, the long-term vacancies.

The modern pharmacy isn’t just the place where you get prescriptions filled anymore. Most of the Rite Aids I serviced had a modest grocery section included as well as cleaning supplies, toys, and a plethora of HBA products to complement the pills of all sorts. For these box stores, then, we need out of the box thinking. It wouldn’t surprise me if we got a deal on one for a 2016 Republican headquarters, since we seem to inhabit empty storefronts every two years. The South Salisbury location would be good for traffic, as we’ve been in that area a couple times before.

Yet it’s another sign of the times, and while I can’t say I’m surprised it’s sad to think of all those adversely affected by the store closings soon to come. I know some good Rite Aid folks who may be a little nervous now.

Autumn Wine Festival 2015 in pictures and text

October 18, 2015 · Posted in Business and industry, Delmarva items · Comments Off 

For the thirteenth year, Wicomico County hosted the Autumn Wine Festival on the grounds of Pemberton Manor.

There was one notable difference in this year’s event as opposed to previous ones, even at the ribbon cutting.

It was the usual assortment of politicians, but in addition to Senator Jim Mathias in the pink shirt, there were members of the Women Supporting Women group making sure we remembered October is Breast Cancer Awareness Month. This as if the entrance sign wasn’t enough.

Then you had this raffle table up front.

If you wanted to buy a bottle of wine, they were there.

They were selling merchandise, too.

You could even make a game of it.

Listen, I get it. When the attendance at the event appears to be 60-70% female it’s a good marketing play. But it may be a little hypocritical to use the AWF based on one recent study. Nor is there nearly the push for lung cancer or prostate cancer awareness despite their similar incidence. Just adding perspective, folks.

It seemed to me as well the crowd was a little thinner. I like taking crowd shots to watch the evolution, as the four shots from Saturday taken from about 12:30 to 3:30 show.

Today with the brisk weather and a couple spotty showers, it was fairly slow. The shot below was taken at 1:30.

By 2:45 the end tent farthest from the stage and food area was all but deserted.

At least one vendor pulled up stakes early based on this sparse gathering. There was still over an hour left at the time.

Just the couple businesses I spoke to would have liked better sales.

There were some other nice touches, though, The VIP section for the Wine Festival is much larger than the one for its beer-based counterpart.

On Sunday it becomes an artisan section where they can sell their wares.

As always, we Republicans were there too.

Like last week, we did a “corn poll,” but this time we had a different winner as Donald Trump prevailed. Participation was significantly less this week, though.

I generally have a few favorites in the marketing department and a bottle photo to conclude with. Based on the number of stickers I saw with this logo they were a hit.

St. Michael’s Winery does the Gollywobbler, the subject of the shirt below. What I didn’t know is that they’re next door to the St. Michael’s brewery. Can you say road trip?

Finally, the bottle shot brought to you by sunshine and Linganore.

Hopefully the weather will be warmer next year!

The profitable enterprise

October 14, 2015 · Posted in Bloggers and blogging, Business and industry · Comments Off 

I received an amusing e-mail missive this evening from the Washington Times, and it suited me well because I didn’t really want to discuss politics after last night’s debate I didn’t watch. Seems it only took them 33 years and over a billion dollars to finally have a profitable month. And if you go to their website – which is the reason they are even close to being in the black, since the print edition is a money pit – you’ll find the reason: it’s almost as bad as the Examiner site for annoying ads. (Having once written for examiner.com I can vouch that money doesn’t spread much among those who provide content.)

Reading that and realizing I’m only weeks away from the decade mark of doing this site made me ponder my profitability. While it’s not making me rich, my site does make me a modest profit mainly thanks to compensated posts and the handful of political ads I accept. (I don’t want to guess my hourly rate on doing this, though, because I’m sure it’s expressed in millage, not even pennies.)

Yet it took from about the time I graduated high school to now for the Washington Times to make money. This despite the fact they had a niche in the market that was otherwise mostly unfilled as a right-leaning print outfit. It sort of makes me wonder about whether I have the patience of Job in developing this site further given the fact I work full-time outside the home.

While that was the case for the first three years I did this site, too, the big difference is now being in a family rather than single. It takes time to be the soon-to-be husband and stepdad, and that lack of available time was one reason I brought Cathy on board.

But let’s talk profit. I still think this site is the right venue for certain non-political advertisers who want to reach a regional audience. It’s been some time since I checked my Google Analytics, but historically I have had an audience all across Maryland, with some play in D.C. as well. Maybe you have a niche of your own that seeks customers who are more intelligent and discerning. I think this could be the ticket.

In strict terms of how much I pay for the server vs. revenue, this has been a net winner for most of the last ten years. But I want to help you succeed, too.

The ticket for job creation

October 4, 2015 · Posted in Business and industry, Delmarva items, Maryland Politics, Ohio politics, Politics · Comments Off 

When I wrote my brief little synopsis on Friday regarding manufacturing, I noted in my promotion that it made me think of former gubernatorial (and future State Senate) candidate Ron George, for whom the most appealing part of his campaign was the emphasis on bringing industry back to Maryland.  In response Ron wrote:

Your article is spot on. Note also the companies that are taking their manufacturing jobs out of China and bringing them home to many southern and midwest pro business states. Our Maryland midsize cities need it back.

Governor Larry Hogan needs help by voters in these areas pushing representatives and candidates for low taxes for manufacturing at the state and local level. The increase of the number of new workers paying the payroll tax will itself greatly increase state and local revenues. Keep it up Michael Swartz.

So I decided to revise and extend my remarks. Those of you who have read here awhile probably have a good idea about what I’m going to say, but I do have new readers all the time so a refresher is in order.

I have no doubt that Maryland can compete for businesses large and small once they eliminate the mindset that employers are cash cows to be milked dry for revenue and embrace the thought that their main goal is to be profitable. I definitely show my age and home state bias, but the mantra I grew up with under Ohio Gov. James Rhodes was that “profit is not a dirty word in Ohio” and to get there we wanted people to make things, just as this 1966 advertisement in my hometown newspaper states. Those things Rhodes touted a half-century ago are still valid today for attracting industry – low taxes, financial incentives, a well-trained workforce, and easy transportation. Plus aren’t we the land of pleasant living?

In the first case, Maryland can make a splash at the cost of three cents per dollar of state spending by completely eliminating the corporate tax. Even if it were phased out over a two- or three-year period, the fact that progress is being made should vault Maryland higher on those business-friendliness lists those whose business is to attract business refer to.

As for financial incentives, I’m leery about having the state in the investment business because I don’t believe they should pick winners or losers. At this time, though, they already have the Maryland Venture Fund although it’s geared more toward startups.

Supposedly Maryland has the best educational system in the country, although I’m a little skeptical of that claim based on some of the recent graduates I’ve seen. One thing we need to focus more on, though, is the idea that vocational education can be valued as much as college prep. Maybe Johnny and Susie’s parents think otherwise, but even “A” students sometimes show not all high school students are college material.

But people with the aptitude to run machinery, know how to tinker and fix things, and are good with their hands don’t need a degree from State U to succeed – and oftentimes have the advantage of not being thousands in debt. To be perfectly frank, to succeed in my chosen profession of architecture one should not need a college degree if they are willing to spend several years learning the craft from the bottom up as one of my former employers did. Somehow they have picked up the idea that five to six years of college schooling plus a couple years in an intern development program is the only way to create good architects, and that’s simply not so. This is why money should follow the child, so they can explore the maximum number of educational options out there.

Finally, there’s the aspect of transportation. Maryland is a state in a great location, but in our case on the Eastern Shore we have the lousy luck of a large body of water limiting our ground-based options. We can either go north through a tangle of traffic lights and small towns along U.S. 13 north or go south through a different gauntlet of traffic lights and small towns. Of course, any improvement to that situation requires the assistance of Delaware or Virginia.

Yet the alternative of going west remains with a third Bay Bridge span. Environmentalists can stop reading after this sentence because I will give them a stroke over the next paragraph – just pick it back up two grafs down.

To me, the best place for a third span runs between Dorchester and Calvert counties, southwest of Cambridge along Maryland Route 16. Obviously roadway improvements would need to be made, but imagine the ease it would bring for traveling between Southern Maryland and the Eastern Shore. No longer would it be an arduous three-hour journey to travel perhaps 50 to 60 miles west as the crow flies. Would it go through some environmentally fragile areas? Yes. But I believe the benefits would outweigh the costs.

I know people will complain that bringing industrial development to Maryland in general and the Eastern Shore in particular would ruin the rural lifestyle, but lifestyle is what you make of it. The carrying capacity of the Delmarva Penninsula is probably at least double its population; a number that will increase with advancements in technology. Regardless, we are nowhere near the density of the I-95 corridor and that should remain the case for the foreseeable future.

I’ve often said that if an area doesn’t grow, it dies. I used to use North Dakota as my poster child for this until they got an energy boom and began attracting people seeking work in a lucrative field. While Maryland can get some benefits from doing the same and allowing fracking, perhaps the best way to make their mark is to adopt the old Ohio mantra that profit is indeed not a dirty word and take the bold steps needed to shake its anti-business reputation.

To enjoy the land of pleasant living, you have to be able to make one.

More woeful manufacturing news

It’s been a crusade of mine to encourage the rebirth of American manufacturing – unfortunately, we seem to be going the wrong way, according to the union-backed Alliance for American Manufacturing. Holding Barack Obama to his promise for one million new manufacturing jobs in his second term, the net gain has fallen with the September employment results and the August revision to 370,000. Even if you consider that their figure is a net figure, we’re still way short of one million jobs created.

Overall, the job market is creating about 200,000 jobs per month – slower than last year, but still positive growth. Unfortunately, it’s barely exceeding population growth.

You may ask yourself, though – why the emphasis on manufacturing in these quarters, particularly when you work in a service industry? To me, the answer is simple: economic growth is achieved when we add value to the overall economy. Sure, you can print money until the printing presses break but that just adds paper and not value.

Consider the iPad I’m writing this on. Originally it was a number of raw materials extracted from the ground. The first addition of value came when they were extracted, but a far larger one came when the component parts were created. A further increase in value came from the assembly process, which made the iPad into something usable by a member of the public. At that point, a little extra was added in shipping it to the venue of retail.

While I can’t ascertain where the raw materials came from, the iPad is manufactured overseas and shipped to the American market. Supposedly Apple has moved some production here, but not for iPads.

I don’t want to get bogged down in those nuts-and-bolts, but suffice to say that I think manufacturing adds more value per dollar invested than service industries. Certainly it can be fickle – the fanfare associated with this early ’70s plant expansion died quickly when a national recession shuttered it within a couple years – but more often than not good jobs are provided.

We are better off when we make stuff. China may be cheaper, but is it better? How many times have you purchased some Chinese-made trinket only to scrap it in a couple years because it was assembled in a shoddy manner with substandard parts? America used to be better than that, and I want to see us return there.

Next Page »

  • I haven't. Have you?
  • February 2016
    S M T W T F S
    « Jan    
     123456
    78910111213
    14151617181920
    21222324252627
    2829  
  • Locals flock to monoblogue

    More and more locals come here for 'News and views from Maryland's Eastern Shore.'

    Click on the photo for details on advertising opportunities.

  • Link to Maryland Democratic Party

    In the interest of being fair and balanced, I provide this service to readers. But before you click on the picture below, just remember their message:

  • For Policy Wonks

    TrackBill is a great way to follow both Congress and state legislatures in a customized manner.

  • Categories

  • The Road to 2016

    Maryland Primary Election will be April 26, 2016.

    President:

    Republican:

    Jeb Bush
    Ben Carson
    Chris Christie
    Ted Cruz
    Carly Fiorina
    Jim Gilmore
    John Kasich
    Marco Rubio
    Donald Trump

    Democrat:

    Hillary Clinton
    Bernie Sanders

    U.S. Senate - Maryland

    Republican

    Rich Douglas
    Chrys Kefalas
    Anthony Seda
    Kathy Szeliga
    Dave Wallace

    Democrat

    Donna Edwards
    Chris Van Hollen

    U.S. Congress - Maryland District 1

    Republican

    Andy Harris (incumbent)
    Sean Jackson
    Mike Smigiel

    Delaware State Primary Election will be September 13, 2016. (Presidential is April 26.)

    Governor

    Republican

    Colin Bonini
    Lacey Lafferty

    Democrat

    John Carney

    U.S. Congress - Delaware

    Republican

    Hans Reigle

    Democrat

    Bryon Short
    Bryan Townsend

  • Archives

  • Part of the Politics in Stereo network.