“the ground has shifted beneath them”
The Governor of South Carolina has outlined his agenda for more tax change for business. Tax change is great, but as President Obama has stated about businesses, ” The ground has shifted beneath them.” The issue we face both in the country and in the state is a significant decrease in demand. The old adage of tax breaks, by themselves, does not work in a deflationary environment, and the Governor should be aware of this fact. In an environment of rapidly declining prices, private industry is unable to create demand, thus that responsibility falling on government. Martin Wolf of the Financial Times wrote a nice analysis of why a bailout is needed. In his article, ”Why Obama’s plan is still inadequate and incomplete,” he discusses how employment and GDP are related in this recession. It is important for our government here in SC to understand the concept that we have both demand and productivity problems in the state, the two items really holding us back. To debate isues like paying unemployed workers is futile, since the affect on demand would put us into a further spiral. The cut-backs in state government can be felt especially by small business. There are, of course, good people working at the State, but they lack the resources to make them more productive. When you cut back, you have to replace that cut with increased productivity. When you don’t have the tools and processes for increasing productivity, you can not succeed, a lack which has brought the system to its knees. How to raise money? Come on – cigarettes, trailer and car license tax increases, dump money sucking machines like the state utility and the port – the list goes on. The ground has shifted, so it’s time to put old thinking behind (Trust a bank lately?) and start applying new solutions that fit our current situation.
Occupations in Demand (OID)
Occupations in Demand or OID is a data set that assists educators in matching their curriculum to occupational opportunities in the workplace. It is also a tool for governments, job seekers, and businesses to identify employment and business recruitment opportunities within a region. There are three data components used to create OID: job vacancy survey (JVS), occupational employment statistics (OES) , and unemployment statistics (UI). Two of these data sets are already available from SC Labor Information Office (LMI). The third data set (JVS) needs to be administered. This process is already in place within other states; thus the methods and procedures are already developed and can be transferred to South Carolina.
Benefits of this program are threefold. Data can 1) assist educators in assessing the impact of their education strategy, linking curriculum to real world economic conditions, 2) guide state agencies in assisting individuals to evaluate job opportunities, and 3) guide the state of SC and its different regions in evaluating industry recruitment opportunities.
To create this data set, a twice annual job vacancy survey (JVS) is needed. These data are then analyzed with the other state data to create the OID data set. This process is currently handled by the LMI offices of many states but can also be developed by local technical schools or other learning institutes as a part of their business education or economic development departments.
JVS Examples: Louisiana, Washington State, Missouri
Formal presentations designed for individual institution are available. Contact information: scott moore
Enterprise Network System (ENS)
Enterprise Network System (ENS) is a process used to connect local industries in such a way as to identify new industry potential in a region. The University of MN-Duluth and the Minnesota Department of Employment and Economic Security (DEED), developed ENS in hope of attracting new businesses to rural areas of Minnesota.
The paper presented by the U of MN-Duluth outlines the community project that took place in 2005. As the lead analyst from the State of MN, I assisted in the method and database design. The basic process is outlined in this flow chart.
There were a number of articles written on the process, one from the State of MN. Another group that has an ongoing project in Minnesota is the Initiative Foundation.
ENS is a process that can be done for any community but is best used in rural communities that are trying to work together to attach new industries to their area (enterprise-network-system_example). I’m sure there are a number of questions about this process, so feel free to ask.
January 2009 Local industries Boeing and Alcoa
Financial Times stated that Boeing is cutting 4500 jobs or 7 percent of its workforce. Orders fell by 53 percent and deliveries by 15 percent. We make the Dreamliner here, but there is no news whether, in fact, the cutbacks will affect these employees. Meanwhile, Alcoa is cutting 13,000 jobs (that’s a big number!) or 13 percent of the workforce. Again no mention of any effects locally. Clearly though, we are seeing cutbacks in almost all areas of manufacturing.
I guess not. What we now know is just the opposite, with Boeing actually building a major manufacturing facility. Interesting Toyota one of the worlds premier manufacturers is having a terrible year. Pedal problems and now brakes- will the wheels fall off next!
November 2008 Unemployment
Here are some numbers to digest. These are from Dean Bakers BLOG Center for Economic and Policy Research.
Dean goes on to say-
The December employment report showed the economy losing 524,000 jobs in December. It also showed sharp upward revisions to job losses in the prior two months, bringing job loss over the last three months to 1,531,000. This is the highest 3-month total since the months immediately following the end of World War II, although the job losses in the 1958 and 1974-75 recessions were larger relative to the size of the workforce.
With the length of the average workweek getting shorter, the decline in hours worked has been even more rapid than the drop in employment. From September to December, the index of hours worked for production workers fell at a 9.4 percent annual rate. This rate of decline in hours would be equivalent to losing 12.8 million jobs over the course of a year, if the length of the workweek remained constant.
We saw that today, 01/14/09, with the announcement of the Charleston Metro Chamber cutting hours.
Recenty The Post and Courier highlighted “experts” who couldn’t figure out why the unemployment rate in SC is higher than the rate in the United States. The reason is very clear; SC is NOT like the United States in many ways and should not be compared directly without looking at the details. First here is the unemployment-nov-08 from the BLS. I like these tables since they show the relationship between employment, labor force, unemployment and the unemployment rate. Note the STEEP drop-off in employment. Wow! This is a big drop. It could be a lot worse though, depending on what the labor force does. We will have to wait and see. So one can imaginewhat the unemployment rate would look like, if instead of companies cutting back hours like the Chamber, those were actual layoffs. Regardless, as Dean Baker stated these hourly cutbacks are real and will continue to affect the economy.
Back to our comparison. I reviewed a number of data sets but chose two that highlight the differences between SC and the United States. I chose Education (Census) and what is called Location Quotient (LQ) from the BLS. Education compares SC educational attainment rates with the United States. LQ compares industry concentration between the United Sates and SC. See ed_lq-data-nov-ui
The top table is education. Note the difference in higher educational attainment. We know that persons with more education on AVERAGE are less affected than persons with a lower education. The lower table is LQ or the concentration of industries. Note how SC has a higher concentration of Manufacturing, Construction (HOMES) and Retail than the United states as a whole. All three of these industries have been hit hard. But also note the lower concentration in Health Care than in the United Sates as a whole. Of course, Health Care is one of the bright spots for new jobs, thus our not rec eivingthe full benefit of that industry. So there are significant differences between SC and the United States. Therefore, I would expect to see the SC unemployment rate rise much faster than the US in the months ahead. The GOOD news! We do not have much of a finance sector!
Citadel – Health Science Disabilities
During the past few years I have worked with Dr. Dena Garner at the Citadel speaking to her masters level students about physical disabilities. I myself am physically disabled as a result of spinal cancer a number of years ago. As a data analyst, I have shared with the class some of the sites I review to research statistics on persons with disabilities. I thought it would be helpful to post those sites in one place so those interested can easily find them. I have created that Disability Statistics List for anyone wanting to research further. See below.
