On the Right Jobs Track

Indiana’s employment picture has brightened considerably in recent months. Some numbers behind the numbers, according to the Department of Workforce Development:

  • There are over 30,000 more Hoosiers in the labor force than in March of 2000, the employment peak in the state
  • Indiana’s labor force has grown at six times the national rate over the past year
  • The number of unemployed Hoosiers (196,272) is less than 200,000 for the first since August 2008
  • Since July 2009, the low point in recent employment numbers, Indiana has added 214,600 private sector jobs (10th in the nation) at a rate of 9.2% (seventh in the nation)
  • In the manufacturing world, the state ranks third in jobs added over the past year (behind Michigan and Ohio), second (behind Michigan) in jobs added since July 2009 and ninth in growth rate over the past year

Analyst: RTW Opponents Use Flawed Math

Citing research by James M. Hohman of the Mackinac Center, Michigan Capitol Confidential takes issue with the claim that right-to-work states feature lower wages. Hohman's conclusion is that, after all the facts are in, right-to-work states actually have the higher per-capita incomes.

Scores of right-to-work critics ranging from politicians to economists have cited lower per-capita incomes in right-to-work states as why the new law is not good for Michigan.

However, not factoring in cost-of-living exposes a flaw in that analysis, said Mackinac Center for Public Policy Fiscal Analyst James Hohman. Once that is considered, Hohman said the per-capita income is higher in right-to-work states than non-right-to-work states.

For example, Texas per-capita income was $37,098 but would have a purchasing power of $49,700 in the state of New York in 2007, according to Hohman’s analysis. New York’s per-capita income was $47,852.

Hohman found that in terms of Michigan dollars in 2000, right-to-work states had 4.1 percent higher per-capita personal incomes than non-right-to-work states when factoring in cost of living. Michigan was considered a non-right-to-work state because the law was passed in late December 2012. Hohman said the right-work-states didn’t surpass non-right-to-work states until 2003.

“One of the most basic arguments repeated time and time again by right-to-work opposition is that Michigan is going to lose income by passing this law,” Hohman said. “That just isn’t the case. When you adjust for what a dollar can get you, the difference reverses itself."

Hohman used the cost of living index done by political scientists William Berry, Richard Fording and Russell Hanson. They adjusted for cost-of-living in every state from 1960 to 2007.

Pennsylvania Legislators Introduce Right-to-Work

The Washington Free Beacon reports that legislators in the Pennsylvania legislature want to bring right-to-work to their state, citing its passage in Indiana and Michigan and the need for job growth and desire to attract businesses.

Six GOP lawmakers on (Jan. 22) introduced a proposal to make Pennsylvania, the “Keystone State,” the nation’s 25th right-to-work state.

The legislation, which would end the longstanding practice of forcing employees to join unions as a condition of work, has stalled several times over the past decade. The bill’s sponsors say new laws in Michigan and Indiana forced the state’s hand.

“The needs of our economy dictate that it must be adopted at some point in time,” said state Rep. Daryl Metcalfe. “The victory of right-to-work in Michigan and Indiana certainly thrust the spotlight on it and made the General Assembly look it more seriously than the past.”

Pennsylvania is one of the most heavily unionized states in the country with more than 700,000 workers belonging to organized labor groups. That is nearly 100,000 more union members than in Michigan.

The advent of right-to-work in the traditionally labor-friendly Midwest and Rust Belt has left policymakers scrambling to catch up, said Nate Benefield, director of policy analysis at the free-market Commonwealth Foundation.

“Indiana and Michigan are states that we directly compete with,” he said. “We’re going to have to evolve to remain competitive and it’s also a great opportunity for us to outcompete the northeast.”

If Pennsylvania passes right-to-work, it will be the first state to do so in the northeast. That could give it an economic advantage over neighboring New York and New Jersey, which lead the nation in union membership as a percentage of the workforce, advocates of right to work legislation said.

“We’re playing catch-up to Indiana and Michigan, but our immediate neighbors, New York, New Jersey, and Maryland are even less competitive than Pennsylvania is,” Benefield said. “I think right-to-work is a big part to improving our business climate.”

Restricting the use of compulsory union dues also could deal a blow to union influence.

‘First, Do No Harm’ Should Apply in Schools

Far, far too many times criticism of K-12 education is seen as an attack on teachers. In the vast majority of cases, it’s not the educators in the classroom (or anywhere in the school building for that matter) who are standing in the way of what is in the best interests of students.

Consider these recent cases from around the country (courtesy of the Education Action Group):

  • For one Michigan educator, the annual costs of “non-membership” in the local, state and national teacher unions total $544.28. Andrew Buikema has been trying to leave the union since last spring, when he realized that union leaders were uninterested in helping the district control costs, even in the face of a multi-million dollar deficit.

 
“They keep asking for more and more, even though the school district can’t afford it,” he told EAG. “They’re concerned about taking care of the adults and have no consideration for the kids. I don’t want to be part of an organization that says one thing and does another,” he said.   

The union responded to his resignation request last month by sending approximately 150 pages of documents. The upshot of all those documents is this: Buikema can technically quit both unions, but he must still pay them $544.28 in “service fees,” which equals 67.7 percent of a normal union membership.
 

  • These days a lot of school budgets are being held together by the accounting equivalents of bailing wire and duct tape. But one Pennsylvania school district is so broke that it needs the state to provide the wire and the tape.

The Chester Upland School District began this week with only $100,000 in its savings account, and had no way of meeting its $1 million payroll – that is, until a judge ordered the state to give the district a  $3.2 million advance in its allowance.

The money will allow the teachers to be paid and the lights to remain on, at least for a few more weeks. The district is on track to be $20 million in debt by the end of the school year.

Since 2006, Chester Upland’s enrollment has dropped by almost 1,000 students. During that same time, the district has increased its workforce by 145 employees and its budget by $28 million.

  • Florida’s Marion County school district drew national headlines last summer when it announced that it was switching to a four-day school week as a way to save money. 

Other school officials took a more conventional route by laying off teachers and cutting student programs, all the while blaming Gov. Rick Scott for underfunding Florida’s public schools.

Now comes a report that finds 946 school employees in the Sunshine State earned at least $100,000 in 2010. That’s up 818 percent from 2005, according to the Foundation for Government Accountability.

The foundation also finds the percentage of non-school employees who earn at least six-figures has increased by only 7 percent during that same period.

 “During these five years, you have flat student enrollment, the biggest recession since the Great Depression and skyrocketing six-figure salaries – that adds up to a raw deal for Florida parents and taxpayers,” says Foundation CEO Tarren Bragdon.

Clearing Up the Nuclear Footprint

In the last two issues of BizVoice magazine, we’ve touched on the fact that there are no nuclear power facilities operating in the state of Indiana. And that fact is true.

While we’ve stated that a nuclear plant in Michigan (the Donald C. Cook Nuclear Plant just north of Bridgman, Michigan or 25 miles north of the Hoosier border) supplies Northwest Indiana with a small portion of nuclear power, we didn’t tell the whole story. The Indiana Michigan Power facility actually sends 80% of its 2,200 megawatts to Indiana.

That 80% of the 2,200 MW (about a third of the company’s total generation in Indiana) "assists with our coal, hydro and wind facilities in providing power to our roughly 500,000 customers in Northeast Indiana, East Central Indiana and the South Bend/Mishawaka areas in addition to selling to wholesale customers throughout the state."

Thus, the nuclear facts are now in order. And, who knows, nuclear may one day become a bigger part of the energy mix in Indiana and beyond.

Good News for Industrial Sector, Rust Belt

Joel Kotkin says manufacturing – and the auto industry – are making a comeback. The author and geographer details new impressive numbers for Indiana and Midwest industrial cities. Kotkin will offer these findings and much more to the Indiana Vision 2025 task force and Indiana Chamber board members during a work session next week. Forbes reports:

Manufacturing has grown consistently over the past 21 months, and now, for the first time in years, according to data mined by Pepperdine University’s Michael Shires, manufacturing regions are beginning to move up on our list of best cities for jobs.

The fastest-growing industrial areas include four long-suffering Rust Belt cities Anderson, Ind. (No. 4), Youngstown, Ohio (No. 5), Lansing, Mich. (No. 9) and Elkhart-Goshen, Ind. (No. 10). The growth in these and other industrial areas influenced, often dramatically, their overall job rankings. Elkhart, for example, rose 137 places, on our best cities for jobs list; and Lansing moved up 155. Other industrial areas showing huge gains include Niles-Benton Harbor, Mich., up 242 places, Holland-Grand Haven, Mich., (up 172),  Grand Rapids, Mich., (up 167)   Kokomo Ind., (up 177) ; and Sandusky, Ohio, (up 128).

Industrial growth also affected some of the largest metros, whose economies in other areas, such as business services, often depend on customers from the industrial sector. Economist Hank Robison, co-founder of the forecasting firm EMSI, points out that manufacturing jobs — along with those in the information sector — are unique in creating high levels of value and jobs across other sectors in the economy.  They constitute a foundation upon which other sectors, like retail and government, depend on.

Moving Trucks are Headed To …

Sometimes the unscientific surveys provide the most interesting results. Why? Because you know not to fully accept what you find, but in more cases than not you also realize the conclusions are indicative of a bigger pattern or trend.

That’s one way to look at the annual migration results from United Van Lines. For 2010, it was based on more than 146,000 household moves between the 48 continental states.

A quick look at some of the findings:

  • Michigan was dethroned as the "outbound" (more than 55% of the moves being out of state) victim for the first time in five years by New Jersey. Not to worry, our northern neighbors were second in numbers fleeing for greener pastures.
  • Of the nine in the outbound category, Midwesterners Ohio, Illinois and Pennsylvania were also included.
  • The five "inbound" winners (at least 55% of the moves coming into the state) were, in order, the District of Columbia, Oregon (a top destination for 23 years of the 34-year report), North Carolina, Idaho and South Carolina.
  • Indiana, you ask? Among the 35 in the "balanced" category. But the 2,474 shipments out of the state compared to 2,076 inbound put it at the bottom of that category — 54.4% outbound.

But hey, we’ve got a lot of things going for us here in the Hoosier state. And we didn’t jack up our income taxes by 67% this week like our friends to the west. Just one of the many jokes is that action by the legislature after a contentious battle had to be "Ill nois(e)" to economic development officials and many others.

And it just might be enough to move to Illinois to the bottom of the moving list in 2011. 

National Shake-Up Brings ‘Fresh’ Faces to Government

Indiana’s 24 new members of the General Assembly make for an unusually large freshman class. But how about these House newcomer totals: 60 of 110 total in Michigan; 75 of 163 in Missouri; and 128 of 400 in New Hampshire? What will be the impact? Stateline reports:

If you see someone wandering around lost in the Michigan Capitol when the state House and Senate convene next month, there’s a good chance it will be a legislator. The 110-member House of Representatives will include 60 newcomers — all of whom will arrive in Lansing without any state legislative experience whatsoever.

The huge turnover in the Michigan House — the result not only of an unhappy electorate, but also of strict term limits that forced out 34 incumbents — has many political observers wondering what will happen when so many novices suddenly find themselves with so much power over the direction of state policy.

“It’s almost impossible to forecast,” says Craig Ruff, a Lansing political consultant who estimates more than 90 percent of all members of the Michigan House will have no more than two years on the job. At the very least, Ruff says, it could make for some interesting political theater, even within the newly elected Republican majority, as first-term members may not wish to be shepherded by their own legislative leaders.

“It’s much harder to enforce discipline when people aren’t accustomed to being disciplined,” Ruff says, noting that some lawmakers may be inclined to ask a simple question of their leaders: “I’ve got one vote. You’ve got one vote. What makes you so supreme?”

Similar scenarios may emerge in other capitols. The 2010 election cycle is frequently noted for its historic turnover in governor’s mansions, with 28 new chief executives about to take office in the coming weeks. But because of term limits, retirements and the ouster of hundreds of incumbents nationwide this year, there will also be a huge number of state legislators coming to the job for the first time. In many states, including Maryland, Nevada and Maine, incoming freshmen have already taken crash courses on everything ranging from the basics of legislative procedure to the right way to speak with reporters.

Nationwide, the turnover in state legislatures will be about 25 percent, a number that Tim Storey, an elections analyst with the National Conference of State Legislatures, describes as an “extraordinarily high” number in a non-redistricting year.

In several states, as in Michigan, first-time legislators will comprise roughly half of all members in one or both chambers, bringing a new and unpredictable dynamic to statehouses where clout and experience often rule. In Arkansas, for example, where term limits ensured plenty of turnover even before ballots were cast, 44 of 100 members of the state House will be new next year, with no state-level legislative experience under their belts.

In next-door Missouri, 75 of 163 House members will be state legislative novices. So large is the class of “true freshman” GOP representatives in the Missouri House that it outnumbers the chamber’s entire Democratic caucus, as well as the number of returning Republicans.

In New Hampshire, which does not have term limits, the 400-member House of Representatives — the largest state legislative chamber in the nation — will have 128 fresh faces next year, all of them new to the business of state lawmaking.

Chamber Director’s Resignation Stems from Twitter Feed

When I read the headline for this story, I initially assumed this director probably had too much to drink and spouted off a personal opinion about someone or something (as many of us do from time to time) on her Chamber’s Twitter feed, thus leading to her departure. But reading her actual Tweets illustrates how fine the line is between what should and shouldn’t go out via a business’ social media program. Granted, her posts might be construed as a bit too informal, but nothing here seems all that egregious. Here is an excerpt from the article at AnnArbor.com, and the site itself shows a few examples of the Twitter feed in question:

The rules that govern the social media world are constantly evolving, but an episode that led to the resignation of the Dexter Area Chamber of Commerce’s executive director shows that ignorance about that evolution is risky.

Mary Ann Bell Falzon resigned last week after a column in a community newspaper questioned the content of her Twitter account, which she was using to promote local businesses through the chamber’s “Doing Dexter” campaign.

Falzon’s mistakes serve as a lesson for the business community, public officials and others unsure about how to approach social media.

“Through all of this whole Twitter mess, I was doing what I set out to do with Doing Dexter,” she told AnnArbor.com. “What I didn’t do well was tweet about it.”

The first lesson for business people: Make sure you understand the tool before you start using it. Falzon acknowledged that she erred by launching a Twitter account without understanding the social media tool, which allows users to send 140-character updates to users who choose to follow their accounts or view the Web site version of their account.

Falzon said her voluntary resignation was “mostly” connected to the criticism over her Twitter account, although she said the chamber board never confronted her about it. The chamber board, for its part, ousted the board member in charge of overseeing Falzon and released a statement acknowledging that the Doing Dexter campaign had “gone with too little supervision."

Falzon launched the Twitter account on July 8 specifically to chronicle her efforts to shop locally and eat locally through the Doing Dexter campaign, which started Aug. 1 and will last through Oct. 1.

Detroit: The Good & Possible Bad of Health Care Investments

Can medicine replace motors as the economic engine in the Detroit metropolitan area? Not so fast, says the Center for Studying Health System Change, which recognizes possibilities but warns of potential dangers in high levels of health care capital investment. The Center for Studying Health System Change reports:

Despite a weak economic outlook, Detroit area hospital systems plan to spend more than $1.3 billion in the coming years on capital improvements, leading some to hope that medical care can help revitalize the area’s economy, according to a new Community Report released today by the Center for Studying Health System Change (HSC) and the nonpartisan, nonprofit National Institute for Health Care Reform (NIHCR).

Overlooked in the enthusiasm is the possibility that significant expansion of the community’s health care infrastructure may lead to higher health care costs if the hospital systems can’t attract new patients from outside the Detroit metropolitan area, according to the report.

“If all the spending on capital improvements leads to increased use of high-tech services or additional costs from excess capacity, the end result might be higher private health insurance premiums, which could negatively impact employers and employees,” said Paul B. Ginsburg, Ph.D., HSC president and NICHR director of research.

The challenges facing the Detroit metropolitan area’s health care system are intertwined with the challenges facing the community as a whole, including a declining and aging population; major suburban/urban differences in income, employment, health insurance coverage, and health status; and a shrinking industrial base, according to the report.