All posts by Ken Pokalsky

A closer look at Buffalo job numbers

Perhaps you’ve seen the news recently about a rather startling revision of employment  numbers in the Buffalo/Niagara region. In case you missed it, here is the gist: preliminary numbers said the region added 8,900 jobs in calendar year 2015. That figure represented a 1.6 percent increase that would have been the strongest job growth the area had seen since 1999. However, when the revised figures came out, what was once 6,100 new jobs, turned into 2,900 new jobs. And that 1.6 percent job growth rate we just mentioned, it plummeted to a disappointing 0.5 percent, well below the statewide and national growth rates.

Further adding to the confusion, John Slenker, the labor department’s regional economist in Buffalo, thinks the newly announced fourth-quarter slump is overstated, and the numbers will be revised AGAIN a year from now.

That same story suggested that Slenker’s more optimistic view is backed up by local unemployment data, which shows that the Buffalo Niagara jobless rate has steadily declined for nearly four straight years since peaking at 9.4 percent in February 2012. It dropped to 5.7 percent in January.

And while those numbers are accurate, they do not tell the full story.

Consider the following, from 2012 thru 2015:

  • Erie County’s unemployment rate fell from 8.3 percent to 5.4 percent
  • At the time the county’s labor force fell by 12,000, from 461,000 to 449,000, a drop of 2.6 percent.
  • Total employment grew by just 1,800 positions, or 0.4 percent.
  • Compared to 2008 job figures, jobs in 2015 were DOWN by 22,000, or 5 percent below pre-recession levels.

Adding all that together and saying it a different way, of the 38,400 Erie County residents unemployed in 2012, only 1,800 got jobs, 12,000 left town or quit looking, and 24,000 remain jobless.

These data show a continuing story of slow economic growth in upstate New York. New York needs to make its economy more competitive for investment and job growth statewide. Small business tax cuts, elimination of energy assessments, and meaningful workers’ compensation reform are all part of the economic remedy. The last thing New York needs is a massive increase in wage costs, which is what the proposed $15 minimum wage, and its accompanying $15.7 billion dollar statewide price tag, would bring.

Facts not on union’s side

You know you’ve hit a nerve when the opposition resorts to misleading arguments.

Today’s Newsday features an article where the Long Island Labor Federation dismisses a new report by the Long Island Association projecting significant job losses resulting from a $15 an hour minimum wage. The Newsday story is here. (it is behind a paywall, sorry)

According to the Federation, the LIA’s report projecting job losses of up to 23,000 is “disproved” by “numerous” studies, and cites a letter from “600 economists” to President Obama arguing that a minimum wage increase won’t hurt jobs. The Long Island Federation of Labor is being completely disingenuous. Five seconds of searching on the web finds the letter being referred to here. While the federation is right, “600 economists” do support an increase in the federal minimum wage, the proposed increase is from $7.25 to $10.10 an hour. That’s nowhere near $15 an hour, the target wage that was the focus of the LIA’s analysis and a recent Empire Center report. In fact, New York’s minimum wage is already set to go to $9 at the end of the year, a level close to the 600 economists’ target level. At $9, New York’s minimum wage will be one of the highest in the U.S.

We are unaware of “numerous” other studies that “disprove” the projections from the Empire Center and the Long Island Association on a $15/hour minimum wage. Most studies we have seen look at far lower target levels. For example, a CBO study issued in 2014 suggested that a $10.10/hr. minimum wage would reduce national employment by 500,000. That same study conceded that the actual job impact could be “very slight” or climb as high as 1 million. New York is talking about going well beyond $10.10 an hour and the only credible studies to date indicate significant job loss.

Behind the Q-Poll

Most pollsters will tell you, how you ask the question can impact the answer. What they don’t always mention is the result can often significantly alter the public narrative on an issue.

Last week’s Quinnipiac University poll is a perfect example. Their press release claimed “New York poll found voters back $15 minimum wage,” and in their first poll question, “Would you support or oppose raising the state’s minimum wage to $15.00 an hour over the next several years?” participants agreed, 62 to 35%. The headline in a number of media outlets was, Q poll shows support for Governor’s $15 minimum wage proposal.

But that poll had a second minimum wage question, and the response has been largely ignored by the media.

It asked: Which of four options “…comes closest to your point of view regarding raising the state’s minimum wage,”?

  • No increase
  • an increase but less than $15
  • an increase to $15
  • or an increase above $15

For this question, 49% preferred something less than $15, slightly more than the 48% who preferred $15 or higher. Interestingly, for upstate respondents, 61% supported an increase under $15, including 13% who chose no increase. When given a range of choices, the Q-poll found that New Yorkers in fact are split on the $15 per hour proposal.

Then there is this opinion piece in yesterday’s NY Post. Michael Saltsman, from the Employment Policy Institute, used Google’s Consumer Survey tool to survey 504 New Yorkers. He first asked about a $15 per hour minimum wage, and – similar to Quinnipiac – found a support rate of 57%. But when they asked whether New Yorker’s would support that policy if it would cause some less-skilled employees to lose their jobs, the results flipped to 57% in opposition. When asked how they’d feel about a $15 minimum wage if it would cause some small businesses to close, 67% opposed it.

No doubt, there will be numerous studies on the economic impact of a $15 minimum wage. Three west coast cities– Seattle, San Francisco and Los Angeles – have adopted laws moving toward that figure, and some data are already showing job loss. Stay tuned.

Commentary: Campaigns Confuse Equal Pay and Comparative Worth

Pokalsky
Ken Pokalsky is vice president of government affairs for The Business Council of New York state, Inc.

The issue of “equal pay” keeps coming up in congressional and state legislative races. Recently “Vote Cope,” the political arm of New York State United Teachers, began running ads saying George Amedore voted against “equal pay” during his two Assembly terms. But “equal pay” has been a matter of federal and New York State law for fifty years.

So what gives? What some candidates and advocates are really talking about is “comparative worth,” not pay equity. There is a big difference. This is not equal pay for the same job, but equal pay for jobs determined to be of comparable skill or value. Determined by who? Not the employer, or labor markets.

Under legislation currently before the New York State legislature (S.1491/A.5958), wages would be set based on criteria and methodologies adopted and imposed by the state Department of Labor.

Here’s an example. Based on state labor data, an experienced truck driver (an occupation that is more than 90 percent male) is paid on average $2,500 per year more than an experienced licensed practical nurses (an occupation that is more than 90 percent female.) But both jobs are classified as requiring the same level of training (i.e., a “post-secondary, non-degree award.”)

Comparable worth” legislation would demand these jobs to receive the same pay, regardless of real world factors such as labor markets and the availability and demand for specific skills. According to national surveys, truck driver jobs are consistently one of the hardest five jobs to fill in the U.S. But under “comparable worth” legislation, labor market factors wouldn’t matter. Moreover, under this bill, pay levels can only be increased to address any calculated “inequities.” Under a “comparative worth” standard, employers would be subject to constant litigation, challenging whether they applied the correct “worth” calculation to disparate positions.

Importantly, even though comparative worth bills have been around for decades, no state in the U.S. has yet adopted a comparable worth standard for the private sector workforce. In New York, the Assembly passed at least one version of comparative worth legislation each year from 2007 through 2013 (but not in 2014), but it has never come up for a floor vote in the Senate – not even in 2009 and 2010 with a democrat Senate majority.

The Business Council has strongly opposed these bills as unnecessary and unworkable, and we agree with legislators who have voted no.

Business Council: Excelsior reforms will provide economic benefit

The Business Council is calling for amendments to Excelsior jobs program that would give ESDC more flexibility to support job creation and investment projects at small and midsized businesses, resulting in more economic development projects, increased capital investment and more jobs.  The reforms would not increase the state’s existing ten year financial commitment to the Excelsior program, but promote more complete and more effective use of Excelsior resources.

The Excelsior program has showed initial successes, with about 130 businesses committing to nearly $2 billion in capital and research expenditures and creation of nearly 14,000 new jobs, with the potential to earn $184 million in current and future tax credits. It has been an efficient program as well, with significant return on investments to the state, compared with the tax credits offered.

But in the first two years of the program, only about half of Excelsior credits have been used, and under current law, unused credits in any given year are permanently lost to the program.  The Business Council believes that Excelsior can produce greater overall economic benefits for New York by expanding eligibility requirements within targeted industry sectors, and increasing the maximum value of some of its tax credits. This approach provides ESDC with more flexibility in supporting economic development projects, while retaining full discretion in awarding Excelsior credits and determining the level of credits available for any particular project. Further, the program would maintain its existing credit caps, meaning that these reforms would not impact the state’s financial plan, The program would continue to apply its overall cost-benefit tests, assuring significant payback to the state’s taxpayers.

For more details on the proposed reforms click here.