November 8, 2010
Last week brought more positive news on the economic front. Seven of the 10 major indicators improved and just three declined. (To see all of last week's reports, see the Latest Economic Reports section below.)
Overall, it is clear that the economy gained some positive momentum entering the fourth quarter, but another sub-par growth rate is likely.
This is evidenced by last Friday's employment report, which showed that the economy created 151,000 private-sector jobs in October -- the most in six months (see tan bars in the chart above), but the increase was not strong enough to bring down the unemployment rate, which remained stuck at 9.6 percent for a third consecutive month (see black line in the chart).
Manufacturing employment fell by 7,000 in October and has increased by 135,000 this year. However, 99 percent of these gains took place in the first five months of the year. Since May, manufacturing employment has edged up just 1,000 -- a clear sign that the economic recovery has slowed.
I attended Economy.com's annual economic outlook conference last week. Following are some of the main points of discussion:
(1) The economy will likely be stuck in low gear for a few more quarters for a number of reasons, including further declines in house prices, sluggish employment growth, low consumer and small business confidence, weak wage growth and policy uncertainty on the tax and regulatory front.
(2) Pent-up demand is building. When the private domestic economy finally begins to rebound, a significant acceleration in output is likely, but this will not take place until 2012.
(3) As households deal with a significant loss of wealth and Americans try to rebuild their porfolios for retirement, the savings rate will likely be elevated for some time. As a result, the pace of consumer spending going forward will not likely be as strong as in the past. For the economy to maintain a healthy growth rate, slower consumer spending will need to be offset by another source, namely exports.
If this is to take place, the Administration and Congress must address issues such as stalled free-trade agreements and high regulatory costs that are undermining our country's global competitiveness.
Dave Huether
Chief Economist
National Association of Manufacturers
Utah Pulse
Utah businesses have international contract opportunities for the taking, says Lew Cramer, president & CEO of World Trade Center Utah. His organization will host an Internet conference with World Bank Senior Commercial Officer David Fulton, Nov. 10, 2010, to explain the process to local businesses.
{read more}
New York Times
According to a New York Times article, November 8, "….even as many politicians, environmentalists and consumers want renewable energy and reduced dependence on fossil fuels, a growing number of projects are being canceled or delayed because governments are unwilling to add even small amounts to consumers' electricity bills." While the "electricity generated from wind or sun still generally costs more - and sometimes a lot more - than the power squeezed from coal or natural gas," the "prices for fossil fuels have dropped in part because the recession has reduced demand." That gap "can pit regulators, who see their job as protecting consumers from unreasonable rates, against renewable energy developers and utility companies, many of which are willing to pay higher prices now to ensure a broader energy portfolio in the future."
Bloomberg News
"Secretary of State Hillary Clinton said high-level talks between the US and Australia will focus on China's monopoly over" rare earths, among other issues. Clinton said that "one topic on the agenda will be the need to develop alternate sources of rare earths after a slowing of exports from China raised questions about supplies of the minerals."
Today in Manufacturing
While the increase in employment has not been strong enough to reduce the unemployment rate, it is important to keep today's number in perspective, said NAM ... continue
Regulatory action on clean air bypasses Congress, forces climate levies
Jerome Corsi's Red Alert
In his nationally televised press conference last week, President Obama indicated that carbon taxes may be imposed on the U.S. through regulations promulgated by the Environmental Protection Agency in a move designed to bypass Congress altogether.
Knowing that the chances of getting cap-and-trade legislation through a Republican-controlled House and a Senate with a larger, more conservative Republican minority will be almost impossible, Obama suggested the backdoor route through the EPA may be a way to accomplish the goal without requiring new legislation.
"The EPA is under a court order that says greenhouse gases are a pollutant that fall under their jurisdiction," Obama said. "And I think one of the things that's very important for me is not to have us ignore the science, but rather to find ways that we can solve these problems that don't hurt the economy, that encourage the development of clean energy in this country, that, in fact, may give us opportunities to create entire new industries and create jobs that - and that put us in a competitive posture around the world."
In other words, Obama intends to pursue the ideological cause of reducing carbon emissions despite growing doubt in the international scientific community about the validity of anthropogenic climate warming theories.
"Cap-and-trade was just one way of skinning the cat; it was not the only way," Obama said at Wednesday's press conference. "And I'm going to be looking for other means to address this problem."
On June 26, 2009, in a 219 to 212 vote, House passed a cap-and-trade bill that was championed by Henry Waxman, D-Calif., and Edward Markey, D-Mass. The Senate did not take up floor consideration of a cap-and-trade measure.
Now, Obama is in for a fight if he intends to proceed with implementing carbon taxes through the back door of EPA regulations.
In an April 2009 appearance on ABC's "This Week," then hosted by George Stephanopoulos, Rep. John Boehner, R-Ohio, said: "George, the idea that carbon dioxide is a carcinogen that is harmful to our environment is almost comical. Every time we exhale, we exhale carbon dioxide."
EPA DECLARES CARBON DIOXIDE A HARMFUL CHEMICAL
In December 2009, the Environmental Protection Agency acting under the authority of the Clean Air Act took steps to control carbon emissions blamed for global warning from power plants, factories and refineries, without waiting for Congress to act on cap and trade.
The EPA ruled that greenhouse gases such as carbon dioxide endanger human health under the Clean Air Act, despite the fact human beings exhale carbon dioxide that trees and other plants absorb.
According to the EPA website, on Dec. 7, 2009, the EPA administrator signed two distinct findings regarding greenhouse gases under section 202(a) of the Clean Air Act:
* Endangerment Finding: The Administrator finds that the current and projected of six key well-mixed green house gases - including carbon dioxide - in the atmosphere threaten the public health and welfare of future generations;
* Cause or Contribute Finding: The Administrator finds that the combined emissions of these well-mixed greenhouse gases from new motor vehicles and new motor vehicle engines contribute to the greenhouse gas pollution that threatens public health and welfare.
All this derives from the Supreme Court ruling in Massachusetts v. EPA, 549 U.S. 497 (2007) that Section 202(a)(1) of the Clean Air Act allows the EPA to regulate the emission of carbon dioxide as an air pollutant.
The EPA decision opened the door for the Obama administration to impose restrictions on the use of carbon-based fuels in the United States, even if Congress never passes the administration's proposed cap-and-trade legislation.
Specifically, the EPA would require industrial plants that emit 25,000 tons of greenhouses gases a year or more to install technology to improve energy efficiency whenever a facility is changed or built.
The EPA has also delayed 79 coal-mining permits in four states, arguing the planned coal mining operations would cause significant damage to water quality and the environment under the specifications of the Clean Water Act.
States to oppose EPA in court
Texas, a leading carbon-dioxide emitter because of its heavy concentration of oil refining and other industries would suffer a major economic impact if the EPA mandatory regulations on carbon dioxide are allowed to take effect, Reuters reported.
The New York Times reported that John Engler, the former Republican governor of Michigan and current president of the National Association of Manufacturers, said last week that the new Congress should assert stronger control over the EPA, which he maintained "is getting way outside its authority in trying to regulate that which cannot pass in the legislative process."
Should Obama succeed, EPA-imposed taxes on carbon-dioxide emissions would most certainly be a setback to a U.S. economy struggling to recover.
Quick Manufacturing News
On the heels of last year's H1N1 scare, manufacturers are taking a closer look at how to avoid wide-spread workplace absenteeism and productivity declines if faced with another flu pandemic. Click to continue
On the heels of last year's H1N1 scare, manufacturers are taking a closer look at how to avoid wide-spread workplace absenteeism and productivity declines if faced with another flu pandemic. Click to continue
Today in Manufacturing
Semiconductor Industry Association predicted global chip sales will rise 33 percent this year to $300.5 billion, as demand climbs for electronics that use chips ... continue
Semiconductor Industry Association predicted global chip sales will rise 33 percent this year to $300.5 billion, as demand climbs for electronics that use chips ... continue
Today in Manufacturing
Will we see any bipartisan deals that will benefit the manufacturing community in the U.S. and finally bring down the nation's unemployment rate? ... continue
Will we see any bipartisan deals that will benefit the manufacturing community in the U.S. and finally bring down the nation's unemployment rate? ... continue
TITLES ARE IMPORTANT
The Employers Council
Workers often see their title as a reflection of status in the job environment and possibly in the social environment. Even when a title upgrade doesn't involve more money or benefits, a worker may feel that something is gained. So why not just go ahead and use elevated titles? One pitfall is that an elevated title – that does not accurately reflect the job scope, responsibility, decision making authority, and functional area – also overstates the employee's potential for exemption from overtime pay under the FLSA (Fair Labor Standards Act). And although a worker may be happier with a different title, consider the consequences of excessive or inappropriate organizational layers created by titles that have no apparent structural function within your business.
When establishing titles, it is best to determine and prioritize the following for your business: business needs, culture and management style, industry, number of levels within the job family, internal equity, reporting and supervisor responsibilities, budget accountability, authority to make decisions, degree of independent judgment exercised, and skills and competencies required. Take time to establish guidelines and a process for title generation and application.
Educate your managers, so they can explain your process and rationale. When you are consistent, workers are much more likely to understand.
Workers often see their title as a reflection of status in the job environment and possibly in the social environment. Even when a title upgrade doesn't involve more money or benefits, a worker may feel that something is gained. So why not just go ahead and use elevated titles? One pitfall is that an elevated title – that does not accurately reflect the job scope, responsibility, decision making authority, and functional area – also overstates the employee's potential for exemption from overtime pay under the FLSA (Fair Labor Standards Act). And although a worker may be happier with a different title, consider the consequences of excessive or inappropriate organizational layers created by titles that have no apparent structural function within your business.
When establishing titles, it is best to determine and prioritize the following for your business: business needs, culture and management style, industry, number of levels within the job family, internal equity, reporting and supervisor responsibilities, budget accountability, authority to make decisions, degree of independent judgment exercised, and skills and competencies required. Take time to establish guidelines and a process for title generation and application.
Educate your managers, so they can explain your process and rationale. When you are consistent, workers are much more likely to understand.
COSTLY INTERVIEW MISTAKES
The Employers Council
If a candidate makes a mistake during the interview process, it may ruin a potential opportunity. If the employer makes a mistake, however, it may result in costly legal consequences. Train your hiring managers on what is unlawful in pre-employment interviews. The following two-prong test is generally used to determine if pre-employment inquiries illegally discriminate:
• The inquiry disproportionately affects members of a protected class; and
• The inquiry is not justified by a bona fide occupational qualification or job-related business necessity.
Another free-to members resource is our Interviewing and Hiring Toolkit – available on the Members Only section of our website at www.ecutah.org/member.
If a candidate makes a mistake during the interview process, it may ruin a potential opportunity. If the employer makes a mistake, however, it may result in costly legal consequences. Train your hiring managers on what is unlawful in pre-employment interviews. The following two-prong test is generally used to determine if pre-employment inquiries illegally discriminate:
• The inquiry disproportionately affects members of a protected class; and
• The inquiry is not justified by a bona fide occupational qualification or job-related business necessity.
Another free-to members resource is our Interviewing and Hiring Toolkit – available on the Members Only section of our website at www.ecutah.org/member.
Interview Question Guidelines
The prime consideration during a job interview should be whether the applicant will be able to perform the open job. Thus, interview questions should be focused on whether the applicant has the qualifications, skills, and abilities needed to perform the job. This focus helps employers to hire a candidate who can actually do the job. It also helps employers avoid legally-prohibited or -problematic areas of questions.
THE FOLLOWING TOPICS SHOULD USUALLY BE AVOIDED DURING AN EMPLOYMENT INTERVIEW:
Age - irrelevant unless concerned about child labor violations under Fair Labor Standards Act, in which case can ask for proof that applicant is old enough to work.
Arrest record -not advisable to ask because minorities tend to be arrested more often in the United States than non-minorities
Association with present employees - tendency to either encourage or prohibit employment of friends/relatives of existing employees may unlawfully exclude minorities.
Bankruptcy - never ask about bankruptcy since it is illegal to discriminate on this basis under the federal bankruptcy law
Citizenship - unless required by law or regulation, cannot ask applicants if they are U.S. citizens since it is considered discriminatory under federal law. You may ask if candidates are authorized to work in the United States.
Disability - the Americans with Disabilities Act prohibits questions about an applicant's disability or perceived disability.
Driver's license - avoid asking about unless job requires one since it could statistically screen out females, minorities, and/or individuals with disabilities.
Educational attainment - unless directly related to successful job performance, avoid asking about it because it could potentially screen out minorities or females.
Emergency contact information - unnecessary at the application stage; can be discriminatory if it reveals information about applicant's membership in protected class.
English language skills - could be construed as national origin discrimination unless a requirement of the job (i.e. an English teacher).
Height and weight - can be discriminatory against females, Hispanics, and/or Asians
Marital status/name change/spouse/children - questions relating to these issues may be construed as discriminatory, especially against women.
Marital status/name change/spouse/children - questions relating to these issues may be construed as discriminatory, especially against women.
Medical conditions - the Americans with Disabilities Act prohibits questions about an applicant's medical conditions or history.
Organization or club membership - may reveal protected class information (e.g, NAACP or Diabetes Association).
Race, color, religion, sex, or national origin - EEOC guidelines prohibit asking questions that may reveal this information; rejected applicants could have grounds for discrimination suit if questions about such topics were part of application process.
Union affiliation - could be considered an unfair labor practice under National Labor Relations Act if applicant claims he/she was not hired because of union affiliation or lack thereof.
Veteran status/military records - cannot ask about dates and conditions of discharge.
Weekend work/shift changes - unless required for the job, applicant should not be asked whether they can work weekends - this could screen out applicants who cannot work on some weekend days because of their religious beliefs.
Weekend work/shift changes - unless required for the job, applicant should not be asked whether they can work weekends - this could screen out applicants who cannot work on some weekend days because of their religious beliefs.
Today in Manufacturing
Manufacturers are not selling as much of their products, reducing the demand to buy scrap metal from recyclers to make items such as cars and appliances ... continue
Manufacturers are not selling as much of their products, reducing the demand to buy scrap metal from recyclers to make items such as cars and appliances ... continue
GOVERNOR RELEASES DRART 10-YEAR STRATEGIC ENERGY PLAN FOR COMMENT
Ted Wilson, Energy Advisory to Governor Gary Herbert, released today the draft report for Governor Herbert's 10-Year Strategic Energy Plan. Comments to the draft report will be accepted through Wednesday, November 10, 2010. Comments should be submitted to Ashlee Buchholz at abuchholz@utah.gov. Comments may also be provided at the public hearing on Wednesday, November 10, 2010, in the Senate Building (Capitol complex east building), Room 215, from 5:00 PM to 7:00 PM. The plan is online at: http://www.energy.utah.gov/governorsenergyplan/docs/strategicenergyplan110310draft.pdf.
UMA has been represented on several of the subcommittees preparing this report and will be reviewing the final draft carefully.
UTAH PM10 SIP SETTLEMENT COURT ORDER
See article below re court-ordered schedule for EPA action on the UT PM10 SIP. Its my understanding that an EPA regional rejection of the state's "exceptional events" demonstration is a primary reason for EPA's proposed disapproval. EPA now has until December 1, 2011 to take final action on the UT plan.
Air Pollution
EPA Will Take Action on Utah Plan On Haze, Particulates, Settling Lawsuit
The Environmental Protection Agency will take action on Utah's state plans for addressing regional haze and coarse particle pollution in 2011 and 2012 as part of a proposed settlement with an environmental group (WildEarth Guardians v. Jackson, D. Colo., No. 10-01218, proposed consent decree filed 10/28/10 ).
The proposed consent decree filed in the U.S. District Court for the District of Colorado settles a lawsuit filed by WildEarth Guardians in March alleging EPA had failed to take final action on Utah's revised state implementation plan within 12 months as required by Section 110(k)(2) of the Clean Air Act. Notice of the proposed consent decree will be published in the Federal Register Nov. 4.
Under the proposed settlement, EPA would be required to take final action on Utah's regional haze plan by Oct. 31, 2012, approving or disapproving of the document. Utah submitted the plan to EPA for review Sept. 9, 2008.
Additionally, EPA would be required to take final action approving or disapproving of Utah's request to redesignate Salt Lake and Utah counties and Ogden City as in attainment of the national ambient air quality standards for coarse particles (PM10), particles 10 microns in diameter or smaller, by Dec. 1, 2011. Utah submitted the request to designate those areas as in attainment Sept. 2, 2005. EPA had proposed disapproving of the request Dec. 1, 2009, but has taken no further action to date (74 Fed. Reg. 62,717).
"Our goal is to push EPA to exercise its oversight a little more aggressively, but it's in the states' best interest too. I don't think they appreciate having EPA sitting on these plans for years and years," Jeremy Nichols, the climate and energy program director at WildEarth Guardians.
The environmental group reached a similar settlement with EPA in May, requiring the agency to review dozens of proposed revisions to the state implementation plans for Colorado, Montana, New Mexico, and Utah (WildEarth Guardians v. Jackson, D. Colo., No. 09-02148, consent decree entered 5/26/10; 47 DEN A-7, 3/12/10).
The proposed consent decree must be approved by a district court judge before it takes effect. EPA will accept comments on the proposed consent decree until Dec. 6. Comments can be submitted at http://www.regulations.gov/ and should reference docket No. EPA-HQ-OGC-2010-0901.
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