NC Media Watch

What a difference an update makes.

Russ Steele

I reported on California stimulus jobs here based on data from recovery.gov last updated on 10/10/09. Then in this morning's Bee Joe Biden and Gov Schwarzenegger reported over 100,000 California Jobs created or saved.

Standing at Biden's side, Gov. Arnold Schwarzenegger said his state has saved or created more jobs than any other state in the nation. He said teachers and other educators account for more than 62,000 of California's jobs, including those who might have been laid off if not for the federal stimulus money.

Below  are the numbers for California as reported on recovery.gov. Note most of the jobs were saved by grants, not many new jobs created, thus our unemployment rate remains at 12.2 percent.

How is hope and change going for you?

Russ Steele

Last week 5,774 Californian's filed for jobless claims for the first time. In one week, California has lost more than twice as many jobs than nine months of stimulus have created in the State.  According to recovery.gov the stimulus has created only 2,260 jobs in California.

Three of those jobs were crated in Nevada County. Abide Industries,Inc. was awarded an $526,091 contract to re-build six miles of the Washington Road. What happens to those jobs when the re-building is done?

As a government contractor for 10 years in Sacramento, I know that when the contract is complete all the jobs associated with that contract are in jeopardy, unless there was a follow on contract, or your can move your team to another project.  That is the problem with government stimulus spending, when the contract is up the jobs are gone. 

Rebane's Ruminations is tracking Nevada County stimulus funding here.

The new normal - a recovery shedding jobs?

Russ Steele

The Sunday San Francisco Chronicle keeps shrinking, it is becoming almost painful to read every Sunday morning at the Flour Garden. However, this morning I found something interesting, yet very disturbing by Carolyn Lochhead, Chronicle Washington Bureau.

Experts see rebounding economy shedding jobs

Forget a jobless recovery. The economy may be entering a recovery with job losses.
Third-quarter estimates this week are expected to show that the economy grew for the first time since the quarter ending in June 2008. Despite the estimated 3 percent expansion and a stock market that has been on a tear since March, hundreds of thousands of people are still being laid off each month.

Eight million jobs have been lost nationwide since the recession began two years ago, and by some measures workers face the worst job market since the Depression. The average laid-off worker has been without a job for 61/2 months, a post-World War II record. Many of those workers will never recover financially.

California's hole, deepened by a state budget mess and volatile tax system, is far worse: Unemployment is at 12.2 percent, third highest in the nation; and adding discouraged and part-time workers puts it over 20 percent.

"It's not even a jobless recovery; it's a recovery with more job losses," said UCLA economist Lee Ohanian. "The idea of having essentially no net job creation after a remarkably severe recession is a real pathology for the U.S. economy."

Marketing Trends

Russ Steele

Marketing On Line has some tips for 2010.  Next year, marketers will need to be faster, better and cheaper, according to BBDO and Proximity Canada’s newly released Top 10 Trends for 2010.

“We’ve seen a lot of evidence over the past few years that consumers were feeling enlightened, empowered and energized to make change for the better,” said Lynn Fletcher, BBDO’s chief strategy officer, in a statement. But just as consumers began demanding more corporate responsibility from big companies, the recession molded those intentions into something more “sober and reflective.”
Consumers are now in survival mode, Fletcher said. Here’s what her agency is telling its clients to look for in 2010.

1. “Smart is Cool” when it comes to personal finance and recreation (just see the success of video games like Brain Age). Marketers should give consumer the facts, and “tone down packaging glitz in favour of functionality.”

2. “Frugalista Power” will come into full force, so retailers can expect increased demand for low prices.

3. Products with longevity will do well. Buying fewer products that last longer is easier on the pocketbook and the landfill.

4. The “buy local” movement will grow, as people seek to keep local jobs and reduce the carbon costs of transporting goods. Regional advertising should be part of your plans.

5. The downturn produced “consumer-preneurs” who make money in innovative ways. Buying solar panels means selling power back to the grid, which gives such products a secondary market and another big selling point.

6. Being green is good, but saving green is better. Selling eco-friendly products will only work if they also save customers’ cash.

7. Online reputations count for a lot–who has the most views on YouTube or the highest Xbox gamer score? Products that bolster digital reputations will have an edge over competitors.

8. Communication is instant among consumers who use social media, so brands must be available 24-7 to talk to consumers in real time.

9. 2010 will be a “pro-am world” where professional grade products will find broader use in the consumer sphere. Companies should examine how they can “give power to the people” with higher-tier goods and services.

10. Google-before-you-buy is now part of the purchase cycle. Being part of the pre-retail conversation will be essential.

As I have written many times, business need a strong Internet presence, people are going on line to do pre-shopping. If local business are not on line, they are not in the game.  With more big box stores opening in Auburn Number 2 is going to be problem for many local business.

Visual impact of regulatory costs

Russ Steele

I found this in the COST OF STATE REGULATIONS ON CALIFORNIA SMALL BUSINESSES STUDY

• The total regulatory cost of $492.994 billion translates into a total cost per
household of $38,446.76 per household, or $13,052.05 per resident. The total
cost per household comes close to the median household income for California.

This picture came in over the email transom shortly after reading the above.

Do you see the similarity in the numbers? 

CA regulations are killing 3.8 million jobs, one tenth of population

Russ Steele

I wrote about the State's Business Tax Climate Index here.  A regular reader of this blog, alerted me to an article in the SF Chronicle on a report the Governor has been sitting on for a year. A report that demonstrates why the California is near the bottom of the Business Tax Climate Index. Also, a comment by Martin resulted in email request for the report to Dan Logue's office.

From the Chronicle:

The office of the Small Business Advocate, a department of the state Office of Planning and Research, had commissioned the report, initially called for in 2006 legislation by then-Democratic, now independent Assemblyman Juan Arambula of Fresno. In April, Arambula reportedly asked the governor's office to release the report, a version of which had been submitted in October. However, the report required careful investigation, according to a governor's spokesman.

The delay should not be surprising given the controversial numbers contained in the report. But there may have been another reason. The report's authors, led by Sanjay Varshney, dean of the College of Business Administration at Cal State Sacramento, had produced a separate study, commissioned by the Small Business Roundtable, on AB32, Schwarzenegger's climate change-fighting pride and joy. That report, released in July, concluded that the legislation will turn out be a job loser, a hit to the pocketbook and will cost California's small businesses $50,000 apiece to fully implement.

The here are the findings in the new report the Governor did not want you to see:

Something very taxing! (Updated)

Russ Steele

As California and Nevada County attempts to recover from the economic recession and avoid a deep depression, there are taxing some things our political and economic development leaders might want to consider.

AB-32 is three years old this coming Sunday. Buried in the AB-32 are multiple carbon taxes, including a cap and trade bill that would cause energy prices to "shoot through the roof." Cap and Trades is really a hidden tax for every Californian. 

Several of the states surrounding California do not have AB-32 job killing greenhouse regulation and in many cases a much lower tax structure.

Here is the latest evaluation from the Tax Foundation's 2010 State Business Tax Climate Index, via the Tax Professor, which ranks the fifty states according to five indices: corporate tax, individual income tax, sales tax, unemployment insurance tax, and property tax.  Here are the ten states with the best and worst business tax climates:

As the Tax Professor notes that "all ten of the states with the worst business tax climates voted for Barack Obama in the 2008 presidential election, and five of the ten states with the best business tax climates voted for John McCain (South Dakota #1, Wyoming (#2), Alaska (#3), Montana (#6), and Utah (#10)."

From the map below you can see that most of the states with a low Tax Index are in the western US.

Green Job Construction Projects.

Russ Steele

If local promoters of green jobs are waiting for the Waxman-Markey Cap and Trade bill to help them jump start a local green construction economy  they are in for a big surprise. The “Green Construction Careers Demonstration Project,” outlined in Section 424A of the bill establishes a targeted workers program for all approved green projects.  The program claims to promote middle class careers and quality employment practices in the green construction sector among all targeted workers. 

The bill establishes minimum number of hours to be worked by the targeted workers on approved projects. In other words, qualifying projects will provide a set amount of work for “targeted workers,” regardless of the costs involved.

Who are these “targeted workers?” They are individuals living near the project work-site who:

• receive child welfare,
• are veterans who receive food stamps or are disabled,
• live in a community “empowerment” zone,
• have a substantial handicap to employment and have completed a vocational rehabilitation program,
• are “summer youth employees,”
• are food stamp recipients,
• receive social security supplementary income,
• receive long-term family assistance from social security,
• resides in a census tract in which not less than 20 percent of the households have incomes below the Federal poverty guidelines,
• is a member of a family that received a total family income that, during the 2-year period prior to employment on the project or admission to the pre-apprenticeship program, did not exceed 200 percent of the Federal poverty guidelines, or
• is a displaced homemaker.

How many construction worker in Nevada County do you think will fit the above categories? Finding workers that fit these very specific requirements will result in huge expenses for local contractors and therefore huge costs to taxpayers.

Oh, I forgot, the project will have to pay these unqualified target workers "prevailing wages" under the Davis Bacon Act, as this is Federal money allocated to a Federal Program. 

Now I ask, how many of these green construction projects can we bring to Nevada County? Really? That many? 

More details on Waxman-Markey Cap and Trade bill can be found in and Americans for Prosperity  Policy Paper here. And, there is much much more that will have to wait for another post.

Are local green jobs just a myth?

Russ Steele

There is an aggressive push to create a green economy in California, and across the nation using the California model. Policy makers continue to assert that California’s economy is going to be saved by “green jobs”.  However, every time I hear “green jobs” uttered by policy makers my BS meter goes off, beep, beep, beep . . . Especially when those policy makers promise to simultaneously improve the economy and environmental quality while creating those “green jobs.”  How? What is the plan?.

One of the first challenges is define what a “green job” is. There is no standard definition of “green jobs.”  We are told over and over that green jobs pay well, are interesting and produce products that will help the environment.  Unfortunately, most of green jobs identified so far are for writing and enforcing environmental regulations. This is not a wealth producing activity, it is a wealth consuming activity.

While producing environmental regulations may help Sacramento’s economy, it does not appear that Nevada City and Grass Valley will have large groups of admin types turning out stacks of complex hard to understand regulations any time soon.  We might have a few enforcers, but not enough to have a major impact on our local economy. So, what kind of green jobs are local leaders seeking for Nevada County?

From May 2008 to May 2009, Nevada County lost 237 jobs, according to the tabulations   in Nevada County Business News. What “green industry” are local leaders planning to create, or relocated, to Nevada County that can generate 237 high paying “green jobs?” There is a current glut in the solar panel market, and the market is not expected to recover for several years with sales down and more capacity coming on line.  China can make wind turbines cheaper than they can be manufactured in California.  In fact, anything manufactured will be made in low cost energy and labor markets -- not in California.

Where is the sustainable living yard stick?

Russ Steele

...

Nevada City will celebrate the opening of the feel good A.P.P.L.E Center for Sustainable Living on the 20th of September. I will be out of town, and will be unable to attend the ribbon cutting. I was looking forward to learning what is Sustainable Living and ask the developers how we measure our progress toward their vision of local sustainability? 

I found these definitions of sustainability on the web:

a. The United Nations in the the Brundtland Report in 1987 defined sustainability as "development that meets the needs of the present without compromising the ability of future generations to meet their own needs."

b. Wikipedia suggests that "sustainable living provides that we synchronizes our consumption of natural resources with the earths production.

According to the A.P.P.L.E Center for Sustainable Living web site this is their mission

The APPLE Center will serve these needs by providing a place where visitors and locals can connect to businesses and organizations that provide knowledge and tools for sustainable living. The Center will serve to coordinate existing groups’ efforts in our community as well as developing new programs to build relationships that increase efficiency and effectiveness as our community proactively transitions to a local, sustainable economy.

Fine, but how do we measure Nevada City's progress toward sustainability. Has A.P.P.L.E developed a sustainability index, so we can track their progress.  This sustainability concept sounds to be like the feel good green jobs that are going to magically appear and save our local economy. Don Pelton writing on a local blog site:

The “pro-Green” vision is a positive one, based on economic currents which will eventually rise in strength as we emerge from the present economic bad times, based on the only viable future direction for our economy in these times of increased energy demand and competition. Business of the future will be green and sustainable.

OK, but I ask the question again. How do we measure our progress toward creating a sustainable local economy?  If we do not have a yard stick for measuring our progress this is  nothing but a feel good project with a fuzzy vision that will "eventually rise in strength." When is "eventually"?  Next year? Five years? Twenty years? Never?

I am voting for never. In a global economy creating a local sustainable economy is nothing more than a liberal fantasy, which is highly improbable, if not impossible. There is only a limited number of products we can make and services we can sell each other. There is a greater number products required for a modern life that are not made here, cars, trucks, fuel oil, etc.  It takes wealth to buy those products. Where in the sustainable community do we generate wealth? Wealth generation comes from selling our products outside the community. It all the focus is on local sustainability, will we have enough time and energy left each day to make wealth creating products to sell?  Really? Tell me how?