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.

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.

AC Week in review: July 6, 2014

It was a short workweek, but I had plenty to say on the pages of my Sausage Grinder blog, and plenty more is already in the pipeline for next week.

So let me begin with a story I’ve been following on those pages, as the fate of the eighty-year old Export-Import Bank of the United States hangs on the Congressional balance. The Senate is promising a vote, but the House might not follow suit.

Congress is also being buttonholed by a group of manufacturers – this was the AC post I alluded to in a piece I wrote here on monoblogue a week ago. In this case, over 500 representatives of American manufacturing converged on Congress in an effort to lobby for change. It was all part of a Manufacturing Summit sponsored by the National Association of Manufacturers.

Something else I wrote on in another venue, this time the Patriot Post, was also the subject of a piece for my AC site. However, the angle of the story was different for each piece so you may want to see the differences in style I work with. Illegal immigration is a sore subject with me because I believe in fair play, and those who circumvent the system to gain advantage of those who do things the right way should be made to pay a penalty – personally I think they need to go back and start over again.

As I noted, I have a bunch in the pipeline for next week, including employment data and a commonly used business index. I also noticed one article I wrote wasn’t in the rotation, so I may use it next week if they don’t.

AC Week in review: June 29, 2014

I knew this would be a slow week for me because of the election, so I only had a couple posts for American Certified this week. But they were important because they were on a subject near and dear to manufacturers’ hearts – financing.

First, though, I want to point out something my AC colleague Ed Braxton put together on high tax rates and how they affect us on a global scale. Ed points out that many of our competitors across the globe have relented on corporate taxation, a practice which encourages multinational corporations to park their profits elsewhere.

As I promised a week ago, my two-part series on the Ex-Im Bank’s fate was put up over the last week. I decided to devote part one to what its proponents have to say, with the opponents’ case discussed in part two. Personally, I’m not convinced that we need to reauthorize the institution, particularly in an era where government is already trying to get its tentacles into myriad areas of financing.

One product already made in America, and probably getting its financing from private sources, is the Clif bar. These energy bars got a glowing review from my AC cohort George Pitsakis in his latest piece. However, I have one bone to pick with George – he notes how the company has gone green but I’m wondering how much was on their own and how much incentive was dangled in front of them. If they can make a superior American-made product in a competitive marketplace, though, more power to them.

I’ve already put a couple items in the pipeline for next week and will work on more in the next few days.

AC Week in review: June 22, 2014

With the oncoming election, I sent over just a little bit less to my friends at AC – I’m hoping to make up for it next week once that fun and frivolity is complete and we can take a breather for a bit. Luckily, as I’ll note in a little bit, some of my fellow contributors picked up the slack.

But first I want to note that there are a number of good new jobs in America, particularly in the energy field. I took notice of one organization which is promoting a website to highlight these opportunities. Yet like any other field of work, manufacturing is at the mercy of policy uncertainty, a point which fellow AC writer Ed Braxton touches on in his look at the subject.

In an update to a story I’ve been following on the American Certified page, more members of Congress are demanding the Commerce Department take action against dumping of steel products by South Korea. In the article I pointed out an approved pipeline project in North Dakota, but hundreds of miles of new and retrofit piping could be affected.

I also began a two-part series on the fate of the Export-Import Bank of the United States, a little-known financial institution which has a big role in American manufacturing. It’s likely Part Two will roll out tomorrow, so stay tuned for that.

Finally, I’m not a guy who has the patience to sit in a deer stand or quietly await the presence of a wild turkey – but I know a 14-year-old who can’t wait to experience the former and did the latter during turkey season this spring. So this article by fellow AC contributor George Pitsakis may be something to check out if you enjoy the thrill of the hunt – apparently you’re in a growing industry, and one (I may add) ripe for opportunity to purchase American-made products. A search for “hunting” on the AC site netted almost 10,000 products.

Later this afternoon I’ll return you to the two-part series I started yesterday, but you can read this not-quite-so-political stuff in the interim.

 

AC Week in review: June 15, 2014

It’s been a productive week for me over at American Certified. By the way, I know you read my blog there but have you ever checked out their selection of goods? Promoting American-made goods with the power of Amazon is a pretty good combination if you ask me – and even if you don’t.

As you likely know, my blog is called The Sausage Grinder. But I made a “guest appearance” on another AC blog called The Urban Omnivore to talk about EPA rule changes affecting the coal industry.

Back on my home site I took a look at how the Obamacare health insurance tax, or HIT, is going to affect consumers and industry. It’s part of the ongoing theme of the site, and why I called it The Sausage Grinder, as government can have an outsized effect on how we make things in America. Perhaps that’s why manufacturing jobs lagged in the most recent employment reports.

But there are pockets of hope, and I found reason to celebrate positive developments in my home state. Maybe Cleveland’s sports teams prolong the old “mistake on the lake” reputation (as a Browns fan, don’t I know that) but there is a growing influx of younger, better-trained workers moving there.

I also followed up on a trade story which now involves the Teamsters, who have joined their steel industry brethren in asking for better enforcement. I can tell you that I just filed yet another follow-up which will likely be added Monday or Tuesday, depending on how my editor sees fit to include it. Look for that on next week’s AC review, along with job prospects in a rapidly growing industry.

 

 

AC Week in review: June 8, 2014

Wouldn’t you know it: I begin a series only to bump it in week 2 because of MDGOP debate coverage. So this will truly be two weeks in review, but I’m sure you really don’t mind.

I begin by asking the question: can America keep making things? I found an interesting perspective on the question and added my own thoughts. But I also found that workers, STEM-based or not, should be flexible and highly-trained. (And while it doesn’t pertain directly to AC, I was pleased that one of our gubernatorial candidates has the same line of thinking.)

In order for our manufacturing economy to succeed, though, we need to have others around the world play fair. Unfortunately, not only China has been caught cheating on trade, with them and other countries threatening up to 500,000 steel jobs, but right here at home one group of American manufacturers is concerned that federal regulators unfairly have them in their crosshairs as well.

Longtime readers know as well that I’m excited about America’s ongoing energy boom, and in this case I look at how manufacturing can benefit, with a little help from regulators. And while the EPA is trying to do away with the coal industry through onerous regulations, Congress on the other hand is trying to rein in that body run amok with accountability and transparency.

I’m sure in the next couple days – since the unemployment rate is always released on a Friday, for weekend analysis – we will get spin on it, but this is another pre-launch piece I wrote last month on May’s unemployment numbers.

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On the first Friday of this month, analysts cheered the new low unemployment number of 6.3 percent, a low not seen in nearly six years. Moreover, the economy added 288,000 jobs – although that news was tempered by a labor force participation drop of more than 800,000 workers.

Yet out of those 288,000 jobs, just 12,000 were added in the manufacturing sector. That was “surprisingly weak,” according to Alliance for American Manufacturing (AAM) president Scott Paul. The AAM, an advocacy group backed mainly by the United Steelworkers union, contends that 5.8 million jobs could eventually be created by stopping currency manipulation by China, citing a recent Economic Policy Institute report which called the practice the “primary cause” of our trade deficit.

On a similar front, economist Chad Mowbray, who writes for the Shopfloor blog for the National Association of Manufacturers, detailed a number of “nagging challenges” for American manufacturers, leading off with the weak 0.1% first quarter GDP growth announced last week. (Editor’s note: that number has since been revised to a negative 1 percent growth.) Mowbray added that high marginal tax rates and uncertainty about health care costs could be factoring into the slow market growth.

In all these cases, policymakers in Washington are at loggerheads on how to proceed. A bill to deal with the currency manipulation was introduced last year and has bipartisan support, but mainly from Democrats. Unfortunately, that side seems to be placing more time and effort into trying to increase the minimum wage, which is a political nonstarter and is thought by many, including the nonpartisan CBO, to be a job killer. Republicans seem to be content with introducing bills to tweak around the edges on both tax reform and health care, but know there’s little chance of them advancing through the Senate, particularly six months before the midterm elections.

The situation, then, remains a challenging one. If, as some analysts have cited, the weather played a factor in slow economic growth, that excuse will dissipate in the summer sun. The question of whether the May jobs report was a mirage or portends better things is important, but there’s little doubt that if the manufacturing sector lags behind any recovery it will impede our progress going forward.

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It’s been a busy week, but I’ll keep monitoring the manufacturing market.

AC Week in review: May 25, 2014

AC logo.As you likely recall from previous posts, recently I announced my newest client, American Certified, and earlier this month I joined three other bloggers to kick off the blog portion of the e-commerce site. My subsite is called The Sausage Grinder, and in that space I focus on issues of importance to making things in America; specifically, the areas of trade, energy, and regulation.

And while I had discussed the possibility of cross-posting between my site and TSG, I think it may work out better – since I strive to do three to four posts a week for the American Certified site – to debut a weekly feature where I summarize and link to my posts on their site. You’ll find the subject matter and style are different enough to where it almost seems like it’s not my writing. In truth, I model these posts on those I submit twice weekly to the Patriot Post, with a different “sweet spot” of about 300-400 words.

In my debut, I pondered the effect of new power plant regulations on the coal industry. There’s something else I’ll share about that one shortly.

Next, I tackled energy issues and political involvement as part of a Kentucky visit by National Association of Manufacturers President/CEO Jay Timmons. I didn’t note this in the story, but NAM endorsed Mitch McConnell during the visit and he indeed emerged victorious against primary challenger Matt Bevin.

The final two I’ll highlight could have served as a couplet, for I discussed the GOP thawing toward a higher minimum wage and the fact that wages for STEM workers aren’t increasing rapidly because we have a glut of them in this country, despite calls by some to allow more foreign STEM workers in.

If you read about the new power plant regulations, you’ll notice I alluded to a previous article I wrote. When I sent in pieces to populate the blog in the week or so before launch, I was assuming they would all find their way onto the site, but it looks like some didn’t. If they’re not going to be used, I may seed them in with this week’s regular posts as supplemental material – why let good writing go to waste? The pieces are more or less evergreen.

But since having the context is good, here is the post about the rally, titled “Ohio rally first of several condemning steel dumping.”

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In advance of a Commerce Department ruling expected in July on whether South Korea is illegally dumping a product known as Oil Country Tubular Goods, or OCTG, the first of several rallies organized by the advocacy group Alliance for American Manufacturing (AAM) occurred last week in Lorain, Ohio. The U.S. Steel Lorain Tubular site was selected to be first as its products compete directly with those Korean imports.

Sen. Sherrod Bown (D – Ohio) claimed that imports comprised half of the American OCTG market, with South Korea being a major culprit. In its own report, the AAM suggests that “(t)hese conditions make it impossible for domestic mills to take advantage of strong demand resulting from drilling in shale gas fields.”

But a local news report noted all was not bad news, as another Lorain steel plant unveiled that same day a $110 million electric arc furnace which promises to create 450 jobs. The Republic Steel facility got a sendoff from Ohio Lt. Gov. Mary Taylor and several Republic Steel officials, who pointed out the new furnace adds 1 million tons of capacity for the plant and could add $1 billion in economic activity to the state and local area.

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Finally, by all means you should check out the other bloggers (Ed Braxton, George Pitsakis, and Kim Pezza) as well. They touch on a number of different subjects and give the site a more well-rounded perspective.

A certified entrepreneur

Last night was worth the effort. Normally I’m not one for driving a couple hours to be with people I don’t really know, but the exception was made and it leads to this post today.

The occasion: the debut of a new enterprise I have a part in, called American Certified. And they threw a nice little party to commemorate their launch.

The concept of the company is relatively unique: it serves as a clearinghouse for American-made products, making them easier to find, with the “Certified” portion being a label which not only demotes that it’s American-made, but allows consumers to shop for products based on over 100 different traits, potentially even creating specialty stores. If I wanted to buy a product from a woman-owned Republican company, they could give me a list. Yet it harnesses the power of Amazon to handle the part it does best, selling and delivering the product.

The project is the brainchild of “serial entrepreneur” and inventor Marvin Weinberger, who explained that in the past he’d had opportunities to manufacture his products overseas but resisted out of love and loyalty to America – his parents both immigrated to this country as his mother was a survivor of the Warsaw ghetto. Now he believes “I’m on the right side of history” by promoting American-made products, and he did the market research to back up this belief. As of the launch, there were 1.7 million products available, with another 8.4 million “in the pipeline,” according to Weinberger.

Nor was it an easy task, said Weinberger, as they restarted the process six times in eighteen months before finally assessing, “we cracked the code.” And so, with a virtual ribbon cutting, they were underway.

Yet the idea of locally-sourced and American products wasn’t just for show.

These shirts? American-made, “in a sweatshop-free environment.” Naturally I picked out a red one.

Where possible, the food and drink was local to the Philadelphia area as well. I enjoyed a Yuengling Light while my dessert came from here.

They insisted I take home a box, so butterscotch krimpets it was – that’s what Kim wanted.

But aside from the party itself, there are some other things we can take away from American Certified.

For starters, the company is located in an otherwise nondescript building in downtown Philadelphia.

Its location, however, functions as a business incubator called Venturef0rth, which describes itself as “10,000 square feet of 24×7 inspiration.”

Venturef0rth (and yes, it is spelled with a zero – that’s not a typo) takes one floor of this building, and the guest list for American Certified’s party was dotted with entrepreneurs from some of the other entities within wishing them success. As a place to work, it’s definitely a little off the wall, as signs like these dot the workspace.

But take a look again at the photo up top. Wouldn’t a politician dream about having that sort of crowd? [And as I was saying to an entrepreneur (and potential future writing client) the party should be run like a political event – start at 6, begin the spiel at 7. That’s just about how Marvin did it, and he was done by 7:30 or so.] It was mainly younger people, diverse in gender and ethnicity, and many of them were dreaming about making their success the old-fashioned way, through hard work. I wouldn’t doubt Venturef0rth is occupied during a lot of typical non-working hours.

I alluded to this a few days ago, but the portion of the AC site where I come in is now up. This is how one of my posts looks via my camera.

The actual page, which I decided to call the Sausage Grinder, is here. Now you’ll notice that these articles aren’t retreads of what you read here, and for the most part that is how they will remain. While there is a political element to the concept, I think it’s best to leave the two separate since the Sausage Grinder will focus mainly on national issues affecting “made in America” while monoblogue will stay primarily state-based. (Doesn’t mean I won’t link from here, though.) I was told that my work is the template the other bloggers, which appear to be a pretty diverse lot, are encouraged to follow. Mine is considered the “trade” blog, while the others look at reshoring, consumerism, and agriculture from their standpoints.

In order to make money, those among the millions who don’t mind paying a premium for American-made products – although as the market grows, the premium may well disappear – are the target audience for American Certified. I’m glad to be in on the ground floor because I think entrepreneurship and hard work should remain American traits.

American entrepreneurship (or is it entrepreneurshop?)

Regular readers know I’ve talked regularly about business and industry, particularly with an eye toward restoring manufacturing to our American shores. At one time our nation was the undisputed leader in the world when it came to making things, but now China is poised to overtake us as the world’s largest economy because we buy millions and millions of their exported items. This didn’t happen overnight, and the recovery won’t be a quick one, either. Still, there have been a number of websites and other retail endeavors which specialize in American-made products; however, a new regional player in the field is emerging and there’s a good reason I believe this is important.

Philadelphia, Pa. – On May 15th, americancertified.com will open its doors, finally making it easy to find the best American made products. American Certified (AC) provides motivated consumers with the information they need when it comes time to vote with their wallets.

In recent years, a trend has emerged; consumers have shown a preference toward “buying American.” A survey of one thousand statistically selected Americans conducted by AC shows nearly 80 percent of Americans prefer buying American products, with over half of respondents willing to go “out of their way” to buy American, while nearly 40 percent responded that they are willing to spend more to purchase an equivalent American product.

Serial entrepreneur and inventor, Marvin Weinberger, is launching American Certified to increase consumer awareness while encouraging the resurgence in American manufacturing.

“We started American Certified because we love this country and want to help producers connect with customers who share their unique interests and values,” said Weinberger. “This is good for business, good for the consumer and good for America.”

This press release came out last week, and American Certified will be featuring e-commerce through Amazon, with the added benefit of a directory of “makers” expected to eventually exceed 100,000:

In addition to the e-commerce store, American Certified is building a first of its kind directory of more than 100,000 “makers” (including farmers and manufacturers). The directory membership is free and open to all; participation in the AC store is not required.

Completing the voluntary, but comprehensive, certification provides makers with an official seal certifying the American content of their products. In addition, makers can specify other attributes about their business, including characteristics as varied as whether woman owned, a veteran employer or recognized for green practices. The directory will empower customers to make informed purchases, while at the same time providing qualified companies with a new channel to directly reach shoppers interested in purchasing their goods.

Perhaps you’re beginning to wonder just why I’m featuring this business. I’m hoping one day they’ll be a paying advertiser on this site, but my current interest is much simpler:

Finally, American Certified will feature news and blogs depicting thorough analysis and trends related to the most recent happenings in American manufacturing and consumption. Members of the press and AC shoppers can sign up for a free weekly news summary, reporting on the Buy American movement from all sides, without bias.

I’m pleased to announce I will be one of those writers, running a section I’m calling the Sausage Grinder. It will deal with how trade law and regulations are affecting the prospects of making things in America. (The name was inspired by the Otto von Bismarck quote: “Laws are like sausages, it is better not to see them being made.”)

It may seem like an unusual combination, but in order to create a movement there has to be progress made on several fronts and apparently the fine folks at American Certified believed I’d be a good fit. I look forward to building this additional audience.

So this week I’ll begin putting together content for the site, as I already have a few story ideas to begin. On occasion I will be crossposting between this site and the Sausage Grinder, but if you have an interest in American jobs I would suggest bookmarking the site when it goes live May 15.

Ingenuity, made in America. By the way, “entrepreneurshop” was how I originally mistyped the title and I liked the Freudian slip enough to add it in.