As I was down a computer over the weekend thanks to the need for maintenance and a new part, I didn’t get a chance to talk about last Friday’s National Manufacturing Day; a day which coincided with the disappointing news that only 4,000 jobs were added in that sector last month (out of 248,000 total.) An industry insider I often cited when I did my American Certified blog is Scott Paul, president of the union-backed Alliance for American Manufacturing. His take:
The past two months show manufacturing job gains have again stalled, at least temporarily. Numbers like these are a blow to the president’s goal of 1 million new manufacturing jobs in his second term. A large and persistent trade deficit and a paucity of investment in infrastructure are two obstacles that stand in the way of actual progress.
AAM measures the progress toward that goal of one million, and current numbers place the additional manufacturing jobs at a puny 189,000. The total actually retreated thanks to negative revisions in July and August reports, but has not eclipsed 200,000 yet at a point when Obama is nearing the halfway mark to his term.
So again one has to ask the question: why isn’t the manufacturing that used to support a solid middle-class band of Americans coming back home? Are we not able to supply workers who Barack Obama noted last week are “not just punching in and pounding rivets anymore; you’re coding computers and you’re guiding robots. You’re mastering 3D printing. And these jobs require some higher education or technical training.” Perhaps the push toward getting everyone into a four-year college in order to get that liberal arts degree is affecting workforce readiness, but that’s only one part of the answer.
I have never been able to figure out just how it can be that a company moves to China to make money. The most obvious answer would seem to be the extremely cheap labor cost. One figure I found pegged Chinese manufacturing wages at 46,431 yuan annually, which is roughly $7,429 per year. Obviously that is significantly less than even our minimum wage would be ($15,080 a year) and the vast majority of factory workers make well above minimum wage. But there’s also the time and expense of shipping products back to market to consider, risks which could be mitigated to some extent by manufacturing locally but apparently those costs don’t affect the ledger sheet enough to bring a lot of the manufacturing we’ve lost back here. “Made in China” is still a familiar sight on consumer products.
But there’s still a large piece of the pie which we can help ourselves to locally, even without the protectionist trade theory AAM supports. America as a whole and Maryland in particular have some significant assets in place, but there’s so much room for improvement if the will to make these changes can be found. Tax policy on both the federal and state level can be made into a far smaller impediment, as would a more hands-off regulatory approach. And new infrastructure can be put in place within the transportation realm to make it easier for our products to get to the East Coast market of which we occupy the southern fringe.
Yet as a nation and state we continue to work in the opposite direction, and somehow are amazed that the results aren’t what we thought we would get. We’re on a pace well short of that million-job goal, and adding 4,000 a month won’t get us there. The number should be upwards of 20,000 a month on a normal pace and we’re going to need 30,000 a month the rest of the way to meet the goal. Put another way, we would need to open 10 new Chattanooga Volkswagen assembly plants a month, or each month add 300 more modest facilities employing 100 apiece. Public policy being what it is today, that’s not going to happen and it’s a shame.
It took the better part of a century to make America into a manufacturing power, and perhaps three decades to erode away our advantages. But if we put our nose to the grindstone, the next generation of Americans may bring us back to where we were.
Due to the need to comply with the law that states a business with a presence in the state must collect sales tax, for Maryland residents today is the final day of shopping on Amazon tax-free. The opening of a distribution center in Baltimore made the change necessary.
This affects me to a small extent because I’ve been an Amazon Associate site for a number of years. I doubt I would be the one to collect sales tax, but I’m sure my small cut of the action won’t be increased by the extra six percent things on Amazon will cost to Maryland residents. (In fact, government will be making more money than I do in most cases.) In the past, though, Amazon has ended associate programs in states where they collect sales tax, so it’s very possible that this little revenue stream of mine will go away effective tomorrow. (At the moment, it appears that it will not.) It might be great for people who found a job in one of these Baltimore distribution centers, but those of us who made a little bit of coin in this manner aren’t happy.
On another front, it would be interesting to know how many people with relatives or close friends in Delaware that they visit frequently will be simply slapping their address on the shipping label, although I suppose having a method of payment with a Maryland billing address may bring up the charge as well. Surely we all know someone who went to Delaware to purchase a big-ticket item in order to avoid paying a couple hundred extra dollars in sales tax to Maryland, so I have no doubt people may do the same thing for Amazon. With Delaware being so close and most in this area knowing someone who lives there I would suspect this will become a bit of a trend.
In the meantime, the box on my right sidebar awaits – get while the gettin’s good.
To be perfectly frank and honest, this could be a very short entry because I read last year’s version and the wish list is exactly the same. Attendance was up 3,358 from last season’s all-time low, but we filled three more dates (65 openings vs. 62) so the average attendance per opening declined by 102 patrons, or 3 percent. Out of the last ten years (where records are handily accessible) the average is the third-lowest.
It’s interesting to me that the team’s support has deviated so little over the last decade despite the poor economy we’ve been saddled with, arguably since around 2007. From 2009 to 2011 the average plummeted 14%, but that’s the extent of the difference as the Shorebirds have averaged no fewer than 3,072 per game nor any more than 3,576 per contest in that span of a decade. Over the course of a year that translates to about 35,000 extra fans but we’re always at the mercy of the elements – I’m sure Shorebirds GM Chris Bitters prays for the stormy weather to hit here during roadtrips, or at the very worst on a Thursday night when maybe 1,500 are rattling around the stadium.
Instead, what happened this year was that storms seemed to hit on the nights fireworks or other events were scheduled – witness the August weekend where two games were lost due to wet grounds. If I recall correctly, the first was Faith and Family Night (always a packed house) and the other day was the Float for the Fund date where local celebrities scoop root beer floats for the Shorebirds’ charity. Both had to be rescheduled, and that’s a hassle. It’s why we had Sunday evening fireworks on Labor Day weekend.
As it turned out, many of the games I attended were at the tail end of the schedule and I just got the sense that a lot of people around the place were relieved the season was almost over. On the other hand, I wish we had back the old Maryland Fall League (which existed for one year, 1998) and its Delmarva Rockfish.
But since I have no new complaints, I want to bring up a couple points.
Consider, for example, that the Shorebirds will be celebrating their twentieth season next year. Although they’re not the oldest franchise in the South Atlantic League (eight of the other thirteen are longer-established), Perdue Stadium is roughly in the middle of its expected lifespan in this day and age. Seventeen of the thirty major league parks were opened in 1996 or later, with one of those (in Atlanta) already slated for replacement in the next few years.
A new stadium is not in the cards anytime soon for us, and the prospect of a downtown stadium like many other cities have doesn’t seem to fit Salisbury. But there should be some thought given to long-range planning for a new facility, perhaps in the same location. Once there were plans to replace the Civic Center with a new building next door to Perdue Stadium so it could share parking and I think that’s a superb idea. Many communities have adopted the idea of having sports facilities share those same common resources – Baltimore, Philadelphia, and Detroit are just a few examples where NFL teams exist close by their MLB counterparts. It may be a problem once or twice a season, but generally the arrangement works well. Similarly, my birthplace of Toledo did the same with its Huntington Center – home of the Walleye hockey team – which is just a block from Fifth Third Field and the Mud Hens. Between the two, there’s only one “dead” month – the Mud Hens play from April-September while the Walleye play from October-April.
I understand that the focus of Salisbury city leaders is the revitalization of downtown, but there’s potential for another entertainment district on the outskirts of town. As part of extending water lines to the area just down Hobbs Road from the stadium, parcels of land along Hobbs were annexed to the city a few years ago – so development would be a shot in the arm for our town.
The to-do list I’ve had for Perdue Stadium and the Shorebirds’ operations is one thing, but it wouldn’t hurt attendance to make the area around Perdue Stadium more than just a one-stop destination. The concessionaires of Ovations may lose a portion of their sales in the short run, but that could be made up if we get back to the days of 250 or even 300 thousand making it out to see the Shorebirds. We’ve done well to keep a team 20 years, but there are always greener pastures beckoning. Let’s work to keep the Shorebirds here for generations to come.
After a tough stretch for Big Labor, this Labor Day finds some good news for them in the New York Times, of all places. It seems that union membership in the New York region is on the upswing, according to a study by two professors at the City University of New York Graduate Center. The pair credit more work in the construction sector as well as gains in the hotel industry.
Needless to say, these particular jobs are somewhat cyclical and can be lost at the drop of a hat. (Just ask thousands of Atlantic City casino workers whose employers close after this weekend.) But any good news is manna from heaven for Big Labor.
I also noted in reading the Times piece that the two professors who did the study, Ruth Milkman and Stephanie Luce, downplayed the impact of fast food workers and their attempts to organize. Yet in a separate op-ed in the Louisville Courier-Journal, Kentucky AFL-CIO head Bill Londrigan singled out the fast food industry as one where workers:
…have labored long and hard and not benefited in a satisfactory manner from the fruits of their labor. They have been pushed too far. The pendulum has swung too far away from workers, the poor, elderly, children and those that need the help of others for their survival.
The problem they have, though, is that fast-food workers are very replaceable. And Londrigan has to throw in an obligatory whine:
The rich have gotten too rich and the poor too poor and the rest squeezed in the declining middle.
Take your class envy card someplace else. I’ll agree that it is getting harder and harder for the middle class to get by, but it’s not necessarily that the rich are getting richer in general – it’s the rich who use the power of government for rent-seeking and weeding out potential competition. The unions don’t mind so much when the UAW benefits from a General Motors or Chrysler bailout, but just let various local politicians speak out negatively about the prospect of a unionized Volkswagen plant in Tennessee and suddenly government is the bad guy.
Perhaps unions aren’t completely to blame for the long, slow decline of American manufacturing over the last 50 years, but they haven’t necessarily helped the cause, either. Collective bargaining for the workers of one company is one thing, but enacting protectionist policies to discourage competition or discouraging productivity with onerous work rules are completely different animals. Some of the local unions have wised up, but too many just exist to collect worker dues and pay off politicians.
On a day to celebrate American labor, I stand for the right to work.
I didn’t get as much in as I would have liked, but as promised I did speak to some trade issues last week.
In the meantime, my AC cohort Ed Braxton continued his look at how manufacturing is moving beyond labor. In the first decade of the 21st century, a net of 5 million workers exited the manufacturing field; meanwhile, the composition of those who remained began to change.
This actually goes hand-in-glove with something I featured a few weeks ago, summarizing a report where the authors’ contention was that the standard tool of future manufacturing workers wouldn’t be a wrench but an iPad. While there will always be a need for human hands to make certain things, the lack of physical activity required for manufacturing many common objects shows the need for brains exceeds the need for brawn.
My editor Sean Keefe is now part of the writing team, with his first piece being an interview with an American brush maker. Interestingly enough, one piece of advice Alan Schechter of Gordon Brush Manufacturing Company had: “Have a strong voice to your politicians to support American made.” That brings me to my two pieces for the week.
The kernel of one post began as a remark Andy Harris made at his recent town hall meeting. I think I’d heard it before, but the fact that Russia halted imports of American agricultural products in response to our sanctions for their bad behavior in Ukraine reminded me that “made in America” still has to serve a global market, and trade wars hurt all of us. Yet trying to put these pacts together and iron out differences is akin to herding cats, particularly when a dozen nations sit around the table and Congress is feeling left out. Both are the case with the proposed Trans-Pacific Partnership.
So it was a somewhat slow week, although late last week I read that one story I’ve followed for awhile has reached a resolution. There’s also some movement in the energy sector that may spur a story, too.
I haven’t decided yet if I’m going to bury my next AC review on Labor Day weekend or wait two weeks, so sit tight. I guess it depends how much I write over the next week – hopefully it will be a productive one in all aspects.
I put together a few things this week, and what’s apparent to me is that the political world doesn’t really take a break in August.
Take for example the late-session attempt to promote “Buy American.” Does it really have a chance in Congress before the session ends? Probably not, but it keeps Ohio Sen. Sherrod Brown in the headlines and the favor of his friends in organized labor.
But labor should be more concerned about some of the points brought up by my AC cohort Ed Braxton in two articles this week, particularly if his assertion that manufacturing is moving beyond labor is correct. But he also contends that American-made is gaining credibility again in the global marketplace.
On the other hand, we seem to have an Environmental Protection Agency which is bound and determined to drive jobs back overseas. Coal miners and their allies came out in force to recent EPA hearings in Pittsburgh, driven by a proposed standard which they contend would all but wipe out their industry. As a buttress to their contention, it was also revealed that a separate EPA effort to reduce ozone standards to as low as 60 parts per billion (from a current level of 75 parts per billion, established in 2008) would cost the American economy dearly. Perhaps the worst thing is that the EPA doesn’t even know itself how compliance can be attained.
Having sat down and written a couple pieces for next week, I can tell you trade will be on my radar screen. As is often the case, politics will play a role there but you’ll have to wait and see how I interpreted it.
Many years ago, when I was a mere political babe in the woods, I volunteered to help out a candidate by the name of Maggie Thurber. At the time, she was running for a full term as Clerk of Courts in my former home of Lucas County, Ohio, having won the office in a huge upset two years earlier. She went on to win that election and one more, plus serve a term as a County Commissioner before leaving politics.
She parlayed that political success into a stint as a radio host and also has blogged for several years at a site called Thurber’s Thoughts, although now that seems to be used as additional material for her work on Ohio Watchdog (a subsite of Watchdog Wire.) And that’s where I pick up the story.
I happened to come across a piece she wrote regarding the “Live the Wage” challenge, something set up by this website. This movement is backed by the same people who connived Maryland into raising its minimum wage earlier this year.
The premise of this challenge was to buy groceries and gas on $77 a week, which was the amount deemed to be left over once taxes and housing expenses are paid. Thurber writes that:
Former Ohio Gov. Ted Strickland gave up. He started on a Sunday, but ran out of money by Thursday, he explained in a column for Politico. He said he skipped meals to save money and ate smaller, less healthy meals.
“Because fresh fruits and vegetables are hard to find at a price within a minimum wage budget, I turned to bread, peanut butter, bananas and bologna more than anything else,” he wrote. “That was what I could find when I took this budget to the grocery story (sic) last Sunday. And that’s why I ate lunch from the McDonald’s dollar menu.”
U.S. Rep. Tim Ryan, D-Ohio, spent his money foolishly, paying $7 for sardines and crackers, $5 for a Burger King Whopper, $2 for a cup of coffee and his “last couple of dollars to buy trail mix,” he explained on his Facebook page.
It’s obvious to me Strickland and Ryan didn’t take this seriously; otherwise they would have done as well as Thurber and her husband did. She bought a week’s worth of gasoline for $44 (using points from her local Kroger grocery store) and spent $82.83 on a basic menu of groceries for the week, with a couple splurge items. As for the leftover money?
We approached the challenge as if we had both lost our jobs and taken minimum wage jobs to get by. Under this scenario, we’d have some items on hand, like paper towels, detergent, aspirin, condiments and corn to make popcorn for snacks.
But with $27.17 remaining in our budget, or going without our two splurge items, we’d be able to purchase those supplies as we needed.
Of course, the banshees came out of the woodwork in the comments section and shrieked that she should live like this for a year or so before talking. Well, these (very well-paid) politicians didn’t even try hard to make it through a week – what does that say about their compassion, let alone their eating and cooking habits?
As I noted above, Thurber expanded on this Ohio Watchdog piece on her own site, which gave politicians a new challenge:
Don’t you think it’s funny that no one ever tries to live like a small business owner for week? To feel what it’s like to try to make a payroll, deal with government forms and mandates, handle local government rules and regulations, deal with happy and angry customers, supervise a work staff, promote your business, do the accounting and somehow find time for family and friends and an actual life outside of work?
One day in the life of small business owner is much more difficult and stressful than trying to live on $77 a week.
That’s the reality of this ridiculousness – and that’s why the whole “live the wage” publicity sham is such a travesty.
I talk about business climate a lot on this site because, as a state, Maryland is far too dependent on one industry – the federal government. In that, it mirrors the city of my birth which is overly reliant on the auto industry. But in catering to the auto industry you at least do things which benefit other businesses around the state, and overall Ohio is a diverse state with several distinct metro areas as well as a significant rural component.
In contrast, Maryland seems to work only toward enriching government and those businesses connected to government by hook or crook. So raising the minimum wage was no big deal to most of Maryland – it’s a world of almost automatic annual raises and the job security one receives when you work for a government which rarely, if ever, cuts itself. People can shoulder that burden more easily along the I-95 corridor.
But when you come out to the forgotten parts of Maryland, a minimum wage raise means jobs lost – there’s no other way around it. There were efforts to waive or slow down the increase for counties here on the Eastern Shore, but they were rebuffed in the General Assembly.
And if you think buying groceries on minimum wage is difficult, just try it being unemployed. That’s going to be the result of these shortsighted policies once the political stunts and game playing are forgotten.
I saw Delegate and Senate candidate Mike McDermott at a tri-county Republican Central Committee meeting the other evening, and he updated us on his campaign – in a nutshell, he said turnout would be key. Pretty basic stuff.
Unfortunately, that basic stuff seems to elude Maryland Democrats when it comes to the economy, as McDermott explained in a separate statement I received Wednesday:
As Americans, we understand that people can make mistakes. As we grow up, we learn from our mistakes so that we do not stumble a second time. Wise people do not often make the same mistake twice.
There is an old proverb which states, “Those who cannot remember the past are condemned to repeat it.”
Governor O’Malley and Senator Mathias are not exceptions to this rule.
Eight years ago when these two men took office together, Maryland enjoyed a billion dollar surplus at the end of Republican Bob Ehrlich’s first term as governor. Our state played host to 11 Fortune 500 companies. We were #25 on the list of “Business Friendly States,” poultry operations were expanding, and the future of agriculture in Maryland looked bright. Our people were happy to live here and most had no thoughts of moving away.
Eight years with O’Malley and Mathias have shown the devastating effects of their big government economic policies and made it clear that they do not learn from their past or their mistakes. Their shared philosophy promoting government as the answer to any problem has turned our surplus into deficits. While every state experienced the recession, Maryland has struggled to regain its footing, and some of our counties are simply not recovering. It is a failure of policy, not our people.
Of those 11 Fortune 500 companies…only 1 remains in Maryland and that is McCormick Inc. Based on recent news accounts, even the folks who gave us “Old Bay” seasoning are soon to relocate to Pennsylvania. These companies have not gone out of business, they just cannot afford to operate in a state run by folks who do not know how to be “business friendly.”
Being known as a “Business Friendly” state should be our goal. O’Malley, and his apologists like Mathias, have moved us from #25 all the way down to #42. We are surrounded by businesses that have closed shop, companies that simply do not exist anymore, and large retailers that have boarded up and moved away. Business has a thin bottom line that liberal lawmakers have never understood. Every increase to the cost of doing business must be passed on to consumers who have less money to spend. Liberals apparently skipped their Economics 101 class to attend Advanced Hole Digging 301.
It’s obvious that Maryland’s not doing it right. Just look at the survey of small business people I cited yesterday and compare us to Texas or even Virginia. We could do far worse than to replicate the business climate of Virginia or Texas – although every aspect may not be a perfect fit, the overall change would likely steer us in the right direction. Just look at North Carolina as another example – while they ranked 44th in State Business Tax Climate (Maryland was 41st in the same survey) the Tax Foundation study authors noted:
While not reflected in this year’s edition, a great testament to the Index’s value is its use as a success metric for comprehensive reforms passed this year in North Carolina. While the state remains ranked 44th for this edition, it will move to as high as 17th as these reforms take effect in coming years.
A leap like that would take North Carolina from a ranking which lags behind all its adjacent states and vault them into second behind Tennessee.
And while McDermott doesn’t get into policy specifics, let me whisper something into his ear: a complete elimination of corporate taxes would only “cost” the state $1.011 billion, or less than 3% of its budget. The year-over-year increase was larger than that! If Larry Hogan has that $1.75 billion of waste in his pocket, someone should get that corporate tax elimination proposal on his desk before February is out. It would be nice to have the first session after an election be devoted to major tax cuts rather than big hikes like 2007 and (to a lesser extent) 2011 were. (See update below.)
It truly is Economics 101: if you take a smaller slice from business, their profitability grows and they can be larger players in supporting the regional economy by investing in new workers and equipment. Those new workers and equipment provide more value, which builds the tax base and allows government to cut rates just a little bit more.
At one time, Maryland was booming – a condition I can attest to because that’s why I came here in the first place. Let’s see what we can do to get back to those conditions.
Update: In a subsequent release, McDermott gave me half a loaf, advocating for a 50% reduction in corporate taxes. Not bad. On the economic front he also calls for cutting income taxes, streamlining bureaucracy and relieving the regulatory burden to give Maryland ”an attitude as a state that our job is to ‘permit’ not ‘deny’,” and allow the first $50,000 of retirement income to be tax free.
For three years, the folks at Thumbtack.com, a service for entrepreneurs looking to trumpet their wares, has partnered with the Kauffman Foundation to produce a Small Business Friendliness Survey for much of the country. I’ve referred to this survey before on several occasions.
Out of 38 states which had enough data to analyze, Maryland falls in a range between 25th and 27th with a “C-” rating, placing it in a group with Michigan and Wisconsin. While it rated top grades (an A+) for training and networking programs, it had only one other good grade – a B+ in ease of hiring – and several D+ grades in regulations, tax code, licensing, environmental, and zoning.
There are a couple caveats to bear in mind for Maryland’s grade. There aren’t a whole lot of businesses surveyed, and the written responses came from a small area of the state representing Montgomery, Prince George’s, Howard, Frederick, and Baltimore counties as well as Baltimore City. Those are the areas which generally represent the Democratic strongholds of the state, which leads me to wonder whether the grades are inflated because the responses tend to skew toward a liberal population or whether their frustration level is such because they are conservatives in a liberal state. Regardless, you have a number of survey answers like this one from Severn:
Maryland is all about taxing entrepreneurs and driving them to other states.
To be fair, there were a lot of positive responses, too, like this one from Hyattsville:
I have no complaints. The state of Maryland does a very good job in providing incentives for small business owners like myself to continue to conduct business.
If you hold your cursor over a dot on the page, you can read the good and bad reviews – by my count there are 32.
But to me this is a good primer for politicians to read – real responses from real business people who are hustling daily. And you can easily compare notes with a state like Texas, where responses were plentiful (at least from the urban Dallas, Houston, Austin, and San Antonio areas) and the grades were outstanding across the board – Texas was the lone state to not have any B grades whatsoever, just straight A’s. (Virginia was also in a fairly elite category as well, along with Idaho and Utah.) That’s a very useful facet of this survey in my eyes.
Having three years of data to work with can be telling as well. Out of ten sub-categories the survey measured, Maryland slipped in eight of them between 2013 and 2014. (Only the “training and networking” improved, while “employment, labor, and hiring” stayed put. These were the two best categories for Maryland.)
It is a legitimate question to ask, though, whether the frequent talk over the last couple years about how bad Maryland businesses have it has become a self-fulfilling prophecy insofar as these survey responses are concerned. While there’s obviously been changes in law and regulation, they didn’t seem as bad as some of the grade drops may seem to indicate. But then these are the people in the trenches.
With the timing of the survey, I suspect it will be taken next year in the opening weeks of either the Hogan or Brown administration, and the responses may hold a key to what we can expect over the next few years as far as businesses see Maryland.
We were warned about this all along, but everyone seems shocked that gun maker Beretta has followed through and decided to relocate its production to a new plant in Tennessee next year. The loss of 160 manufacturing jobs from its Accokeek plant will be the gain, once production ramps up, of Gallatin, a town which is a few miles outside Nashville and is about the same size as Salisbury. Here’s what Maryland is losing, from Beretta’s release:
Beretta U.S.A. anticipates that the Gallatin, Tennessee facility will involve $45 million of investment in building and equipment and the employment of around 300 employees during the next five years.
It’s worth noting that Beretta is not the only gun manufacturer potentially leaving Maryland. LWRC of Cambridge said last year “we simply couldn’t do business here” if the gun law passed, with 300 jobs at stake. Rumors of a purchase of LWRC by Colt were rampant earlier this year, yet while no formal announcement has been made the Bob Owens piece I’m citing is useful as a reminder of what such a company means to a rural area.
Needless to say, Larry Hogan had the expected reaction on Beretta’s plight. Yet the question isn’t one of “high taxes and punitive regulations” so much as it’s a question of repealing a knee-jerk law passed in the aftermath of the Sandy Hook shooting – not that any law was going to stop Adam Lanza anyway, nor does this law stop a single homicide in Maryland. It was all feelgood legislation from the start; unfortunately, the powers that be chose not to back the referendum route which would have placed the law on the ballot at the same time as many who voted for it.
To change Maryland’s fate in this respect, not only does the state have to improve on its business friendliness but it also has to find the political will to overturn its onerous gun laws like 2013′s Senate Bill 281. Elections mean things, and not only do we need a governor willing to backtrack on this mistake but also enough of a General Assembly coalition to get a bill through the legislature. That part may be the most difficult, because getting to just 50 Republicans in the House and 19 in the Senate would be a minor miracle – yet Republicans need 71 and 24, respectively, to actually control the chambers. It’s mathematically doable but the odds of hitting the Powerball are probably much better.
So say goodbye to Beretta’s production, and know that it won’t be missed at all by the Democrats in Annapolis.
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.
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.