I say it all the time -- if Western New York is going to turn itself around, to really spur a new era of job growth and economic vitality, it's going to take homegrown businesses leading the way. It's not going to happen by trying to recruit out-of-state industries into the region.

Daily Yonder has a post today that backs that supposition. It's about how North Carolina paid Dell a lot of money to locate a facility there, but now Dell is closing. Meanwhile, a locally grown company that got almost no government assistance is adding 600 jobs.

When are we going to halt public expenditures on the "buffalo hunt" for footloose industry and instead focus our resources and efforts on the sector that produces by far most of the jobs -- existing industry and homegrown business?

Note, that the author isn't against the kind of infrastructure development going on at the new agri-business park (though I know some of our conservative readers will take issue with the expenditure). He's talking about tax breaks and outright grants to bring in business.

The scholarly literature on incentives shows that they are a very poor investment of public resources. And, of course, the business sector has become expert at playing off one state against another in something akin to corporate extortion; and who can blame them?

Imagine if the South in general and North Carolina in particular had put all of the money spent on industrial recruitment into education, training and small business support. We would be watching even more Quintiles, Cree, PPD, Southern Seasons, Performance Bicycle and other homegrown entrepreneurial success stories all across North Carolina. And, although there are no silver bullets in economic development, homegrown businesses are more likely to stay put, invest in the local community, provide stable civic leadership and keep the control and wealth local instead of away at some remote corporate headquarters.

I continue to maintain that we need to find some way to spur more entrepreneurship, to encourage people already living and working here to take their great ideas and turn them into businesses. If we do invest (as taxpayers) in job growth (not saying we should, just if we do), it should be in businesses started locally, not in recruitment.

Genesee County's jobless rate continues to be a bit better than New York as a whole, but that's only looking at the glass as half full.

From the half-empty perspective, there were more people unemployed in Genesee County in October than there were in September.

The county's rate inched up from 7.1 percent to 7.3 percent.  (full data from the state here)

Meanwhile, the state rate climbed to 9 percent.

The even less rosy number is the jump over the past year for Genesee County from a 5.2 percent unemployment rate to the current 7.3 percent.

Roughly 15 people lost good-paying jobs this week at Batavia-based Graham Corp.. The across-the-board cuts were a necessary belt-tightening measure in the midst of a lackluster economy.

That's according to Vice President and Chief Financial Officer Jeff Glajch, who confirmed the rumored layoffs this afternoon.

"I feel sorry for the workers," he said. "But we needed to adjust to the marketplace in this sluggish economy. Things aren't getting worse, but they aren't getting better either."

It's the second round of job cuts this year. Slightly more than 10 percent of the engineering and manufacturing company's workforce was eliminated in January. 

That amounted to about 30 jobs at a time when the company was facing a 40-percent loss in revenue, the CFO said. Nonetheless, in May it received Empire Zone tax incentives.

It is the rare, if not the only, publicly traded company in Batavia, with offices and a production plant at 20 Florence Ave.. It has been in business since World War II.

It engineers and makes vacuum and heat-transfer equipment that has broad applications, from making synthetic fibers, petroleum products, electric power and fertilizer, to processing food, pharmaceuticals, paper and steel. Half its good are sold abroad.

Things were going great guns for Graham by mid-2008, when it made Business Week's list of the fastest-growing small companies.

China and other foreign markets' thirst for oil in 2007-08 created a robust demand for Graham's goods. Orders placed then continued to have a postive impact on the company's finances over the first three fiscal quarters of 2008-09 (the company's fiscal year runs April 1 through March 31).

At its peak, it had more than 300 employees and its stock was trading at a high of $50.98 a share. Its stock closed today at $14.68 a share.

As with other industries, the orders tapered off and the forecast today is a question mark. Looking ahead, the CFO said he hopes there won't be pink slips come December, but "I can't promise anything, we have to wait and see."

Relative to our discussions recently about dairy farms is this chart showing the decline in food-dollar share going to farmers since 1950.

As Daily Yonder points out, some of the decline is due to the increase the amount of money people now spend eating out rather than at home. While eating out doesn't mean farmers make less, per se, it does mean the overall amount of dollars spent on food has increased, with a good portion going to the mark-up of restaurants.  (Sadly for social capital, much of the increase has gone to fast-food chains, where people are generally less social than in the corner diner.)

Now, there has been some relief for consumers recently, with grocery prices dropping as much as 25 percent on some items, but that doesn't necessarily spell relief for farmers.

There are numerous problems facing farmers, from the rise of conglomerate buyers (decreased competition) to price discovery structures that may not fit with modern technology and communication.

Still, this chart backs up something Steve Hawley told me two days ago: Farmers he knows are getting the same price for their products that he got when he was a hog- and cash-crop farmer 30 years ago.

Meanwhile, all of the costs associated with running a farm has continued to go up, from labor to fuel and fertilizer and insurance.

Farmers are in a tough spot and now we have China threatening a trade war over chickens and tires.

A lot of these problems seem inter-related, from high government spending driving up taxes, to the purpose of anti-trust law being turned from its original intent, which was to ensure small-business competition. The law has morphed into ensuring that consumers get the cheapest price at Wal-Mart, thus fueling the rise of conglomerates and pushing U.S. jobs overseas in search of super-cheap labor.

This isn't a problem the government can necessarily fix for us. Consumers need to be smarter about how they flex their purchasing power, spending more money with locally owned businesses and avoiding big-box conglomerate retailers as much as possible.

Especially, buy locally produced food as much as possible.

Genesee County continues to do a bit better than the rest of the state, and the nation, on employment.

The unemployment rate for the county dropped to 6.9 percent in August, down from 7 percent in July.

New York's jobless rate hit 9 percent, however, the highest level in 26 years.

The approval of $1 million for Phase 2 of the Western New York Technology and Advanced Manufacturing Park (STAMP) was granted by the Empire State Development Corporation today.

Senator Michael Ranzenhofer was among those who applauded the allocation to help build the Western New York Technology and Advanced Manufacturing Park (STAMP). He sent along this press release:

“The WNY STAMP park project allows Genesee County to compete in a 21st Century global economy. The project paves the way for technologically advanced companies that manufacture computer chips, semi-conductors and photovoltaic cells for solar power to locate in Western New York. This project would create over 9,300 jobs here in Western New York."

The WNY STAMP park has been planned as a prime mega-site, suitable for large scale advanced manufacturing projects. The 1,340 acre project, located in Alabama near the intersection of Route 77 and Judge Road, will be the second of only one other similar park in New York State. Phase II of the project allows the Genesee County Economic Development Center to complete design and engineering work.

Senator Ranzenhofer expressed appreciation to the efforts of many to move the project to the next phase.

“I would like to thank Senator Mary Lou Rath, Senator Bill Stachowski, Assemblyman Steve Hawley, Assemblyman Dan Burling, Genesee County Economic Development Center President and CEO Steve Hyde and the Empire State Development Corporation for their tireless efforts to create a business-friendly environment and create jobs in Western New York."

Genesee County Economic Development Center President and CEO Steve Hyde had this to say:

“The WNY STAMP (Science, Technology, Advanced Manufacturing Park) project, located in close proximity to the NYS Thruway in the Town of Alabama, Genesee County, is a transformational regional effort which will, over the long term, help to transform Western NY’s economy from Buffalo to Rochester by growing high paying, advance manufacturing and technology oriented jobs. This...site is being developed as NY’s next generation Mega-Site similar to Luther Forest, the home of Global Foundries and AMD’s recent multi-billion investment.

"...I, along with many of the elected officials and people of Genesee County and the region, would like to thank Senator Ranzenhofer, and his predecessor Senator Rath, for all the support and hard work that has gone into helping WNY STAMP become a reality.” 

 


(Orange Butterfly)

JOE: Good morning Calliope.
CALLIOPE: Good morning Joe. How are you this morning?
JOE: A little frustrated.
CALLIOPE: Not with your writing I hope.
JOE: No. My email program is acting up for some reason and refused to cooperate.
CALLIOPE: I assume you are working on the problem.
JOE: I am but I don't like all the time it takes from something productive.
CALLIOPE: Like what?
JOE: Lately I have been thinking about how our issues with the economy tie in with concerns about the environment and with how we treat each other.
CALLIOPE: A big order.
JOE: It is. I have been wondering just how they fit together, what we can do about our world and relationships and what I can contribute.
CALLIOPE: That's quite a bit to think about all at once.
JOE: I agree, but I don't think any of our earth problems can be resolved in isolation.
CALLIOPE: I expect I will hear more about these ideas.
JOE: You will as I am able to digest them. Talk with you tomorrow.

New York has lost more than 160,000 manufacturing jobs and Sen. Kirsten Gillibrand wants to do something about it.

That's noble, but her four-point plan doesn't address the major issues causing the swift decline of manufacturing jobs.

The main factors leading to closed plants and reduced workforces are trade imbalances, large chains forcing manufactures to reduce costs unreasonably, and New York's burdensome regulatory environment and high taxes.

Gillibrand's calls for manageable health care for small businesses and the self-employed, upgraded rail infrastructure, transition manufacturing to clean engergy production and expand a government program called manufacturing Extension Partnership.

Of course, health care costs are a major obstacle to small business start-ups, and providing adequate transportation to get goods to market is a reasonable role for government, and while clean energy is a noble idea, if the free market rejects it, what right does the government have to force the issue?

Gillibrand can't do much about Albany, but she is in a position to impact trade issues as well as anti-competitive practices of multinational chains such as Wal-Mart and Home Depot.

Full release after the jump:

The numbers for New York's economy don't look good:

• Economic indicators have dropped 13 of the past 14 months
• Unemployment stands at 8 percent.
• Housing sales were down 21 percent last month.

And those are just the transitory, economic fluctuations that should be reasonably expected in a dynamic system.

New York, especially Western New York, suffers from longer-term economic trends that must be addressed whether we want to improve our standing in short-term fluctuations or build a strong economic foundation.

The New York State Association of Counties, which put out a press release prompting this post, jumps right to the conclusion that what is needed is more government, more stimulus, more taxpayer dollars.

Can the government really spend New York out of its current problems?

The government's power to spend money is mind boggling, but what really creates jobs and growth are private businesses making investments and taking risks.

Some of what is needed in New York is to clean up the mess in Albany, reduce the state regulatory burden and lower taxes.

But even with its faults, New York, especially WNY, has a lot going for it.  Genesee, in particular, has access to inexpensive power, reliable rail and road transportation, a stable workforce, inexpensive housing, plenty of land and water, respected school systems and a great natural environment.

There's no reason jobs can't be created here.

But growth won't come from government programs.  What WNY needs is a resurgence of entrepreneurship -- daring men and women who want to start businesses right here at home.

The biggest struggle WNY faces is how to convince business-minded people to take up the challenge of starting new companies.  And again, I'm not sure a government program is the answer.  People need to come to this conclusion on their own, but how to get the ball rolling ...

WNY was built by daring entrepreneurs, and only entrepreneurs will save it.

Full NYSAC press release after the jump:

It appears that there is even more to the communist/socialist turn of the U.S. than even I had previously thought.  Gorbachev, former Soviet leader and map head, believe that the west should adopt a plan that is more concerned with the welfare of the public and less so with the "super-profits and hyper-consumption".  He, like Obama, wants a plan "that will emphasize public needs and public goods, such as a cleaner environment, well-functioning infrastructure and public transportation, sound education and health systems and affordable housing."

My comrades rejoice, Perestroika is coming!

Apparently, Genesee County is so far slated to get an out-sized portion of Federal stimulus funds.

From the Jamestown Post-Journal:

Last week, an Associated Press study found that stimulus dollars announced so far are not going where they are needed the most and that stimulus spending is 50 percent higher in counties with the lowest unemployment rates compared to counties with the highest even though it is meant to put people back to work.

That holds true across New York state, according to an analysis of AP's figures by The Post-Journal. According to the analysis, eight of the top 10 counties receiving the most stimulus money per person in New York state are not in the top 10 for unemployment.

At the top of the list is Genesee County, which stands to gain $5.5 million in stimulus funding approved so far, or $93.81 per person, even though it ranks 34 in unemployment with a rate of 8.9 percent. Next is Seneca County, which stands to gain $3.1 million, or $91.70 per person, even though it ties Genesee County with an unemployment rate of 8.9 percent.

Likewise, eight of the 10 counties with the highest unemployment rates are not in the top 10 for stimulus funding. At the very bottom is Lewis County, which stands to gain only $842,667, or $31.83 per person, with an unemployment rate of 11.9 percent. Next is Hamilton County, population 5,075, which has so far gotten nothing but has an unemployment rate of 11.8 percent.

I haven't been able to find the original AP story to double check the figures. 

According to this article, however, Genesee County wasn't included in any of the latest round of my released by Gov. Paterson.

Rep. Chris Lee (R-26) is asking the government to step in and help save dealerships -- or at least the jobs they represent -- that have been slated for closure by Chrysler and General Motors.

In a statement, Lee said " the rapid and potentially disorderly elimination of thousands" of dealerships could put 150,000 people out of work.

Lee is asking the Treasury Administration's Auto Task Force to instead implement a plan that would allow for "market forces " to consolidate dealerships.

According to Lee's statement, "More than 60 members of congress, both Republicans and Democrats from districts all over the country, signed on in support of the letter.
 

Full press release after the jump.

As a transplant to Western New York, my impression that WNY is a hotbed of anti-free-trade sentiment.

NAFTA is a dirty word in these parts.

Certainly, trade was a hot button issue in the 26th Congressional race last fall.

Yet, every time I drive past Wal-Mart or Target, or any of the other Big Boxes in Batavia, the parking lots are full.

I wonder how many people realize that Wal-Mart and its ilk are a bigger cause of good paying manufacturing jobs in the USA being shipped overseas than NAFTA?

Black and Decker, for example, started a process of closing factories in the U.S. in 2002 that lead over the next 24 months of 4,000 jobs lost. The tool maker was pressured by Home Depot and Lowes to lower prices and that could only happen by shifting manufacturing overseas. In 1990, Levi owned several factories in the U.S., which produced about 90 percent of the product sold under the brand. In an effort to meet the demands of Wal-Mart and Target for ever lower prices, Levi eventually shuttered all of it's U.S. plants and now out sources all of its manufacturing overseas. Twenty-five thousand people lost their jobs.

If you're anti-immigration, the next time you step into Wal-Mart, consider than some 40,000 jobs have been lost in Latin America since the mid-1990s as clothes making was shifted from those countries to China.

We all love low prices, but those prices come at a price (and Wal-Mart doesn't always have the lowest prices in town -- sometimes, the locally owned retailers meet or beat those prices).

I'm not sure we can reconcile being anti-free trade, and even anti-immigration, and do the majority of our shopping at big box stores.

Buying local keeps more local jobs in the local community and helps grow the local economy.  In current conditions, the big boxes can be unavoidable at times, but they should be a last resort.

Job stimulus is coming to Genesee County in the form of two programs that are designed to either help laid off workers get back work or youths find jobs and learn new careers.

A total of $1.6 million of stimulus money is going to the Job Development Bureau, according to Director Scott Gage.

In one program, out-of-work people can apply either for a job that will involve on-the-job training, and the government will pay 50 percent of their wages, or youths can take part-time jobs in July and August with the agency picking up 100 percent of the tab.

"Our goal is to get the money into the community as quickly as possible," Gage said. "The majority of the money will be spent this year, because obviously, the goal of the stimulus plan is to turn the economy around quickly."

These are not new programs, but the amount of funding for them is substantially more than originally budgeted.

Yesterday, the County's Ways and Means Committee approved an increase in the budget for the youth summer job program so the bureau can hire two additional temporary supervisors.

Youths from 16- to 24-years-old can apply for work through the program and any agency, public or private business, can apply to hire workers from the program.

"There's no commitment for the business to hire the youth after the summer program, but we hope  that if a business likes the youth the employer will pick them up for a permanent job," Gage said. "Obviously, a lot of employers don't have the ability to that immediately."

Youths or employers interested in the program should contact Jay Lazarony at 344-2042, ext. 212.

For the jobs training program, employers must be able to provide documented on-the-job training with specific learning tasks, or out-of-work individuals can apply for job retraining through BOCES or GCC.

Each program is being funded with an additional $600,000 from the stimulus package, with the balance of the stimulus money going to help disadvantaged or underemployed workers.

Yesterday, we asked the Poll Question: What inhibits job growth in WNY?  Obviously, we left out one possible answer: The New York Power Authority.

You may remember reports previously of the NYPA chasing Google away from Medina.

This morning the Buffalo News reports that a start-up steel firm that would have employed 200 people in WNY will not open its factory gates thanks to NYPA.

It was the second time the company had looked to the Empire State to build a plant. After being turned down for its first request for power a few years ago, which also might have been in Orleans County, it decided to build its first plant, now under construction, in Mississippi.

The company now will look for a site outside New York State for a second plant, Chief Commerce Officer Mark Bula told The Buffalo News on Wednesday.

For its part, NYPA claims there are other new businesses looking for the power and there just isn't enough to go around. That may or may not be true, but as the News points out, NYPA has a long history of turning away job-producing companies from WNY.

Buffalo attorney Jim Ostrowski lost the first round in his legal fight against New York State grants and government loans to businesses, but he's pushing forward with his crusade against "corporate welfare."

GCEDC's VP of marketing and communications, Chad Zambito is concerned that efforts such as Ostrolwski's could undermine economic development tools such as empire zones and damage efforts to bring business to Western New York.

"What it really does is it sends ends a message to site selectors nationwide that New York is really unfriendly to business," Zambito said. "It certainly sends a message to business people who might be looking at New York State that we might not be the most stable environment."

Zambito said Ostrowski's effort, if successful, would hurt the state because of New York's excessive tax burden.

Ostrowski doesn't buy it.

"That’s a really bad argument," Ostrowski said.  "If you look at Pennsylvania and Ohio, to reduce our taxes to their level, we would have to cut $40 billion out of the budget. Now corporate welfare only moves around about $1.5 billion per year, so it’s not an effective tool to compete with other states (with lower taxes)."

Amidst a negative employment report, Genesee County is a bright spot, according to a story in the Buffalo News.

While the region saw unemployment reach a 25-year high, Genesee County actually added .09 percent in new jobs, the biggest increase of any rural or metro county in the state.

The rest of WNY continues to struggle.

“Across the board, we have a lot of weakness,” said John Slenker, the labor department’s regional economist in Buffalo.

The job losses were widespread throughout all portions of the local economy, with particularly steep declines at local factories, where more than 5 percent of the region’s manufacturing jobs have disappeared over the last year. But service-providing jobs also took a hit, with the loss of 8,400 of those jobs, from banking to retail and hospitality.

UPDATE: The Daily News, like WBTA, is reporting different numbers than the Buffalo News. The Daily reports that unemployment in Genesee County rose from 9 per cent to 9.5 percent.

OK, Medina is outside of our coverage area, but the Daily News has a story this morning that concerns all of us, because any chance to create 200 good paying jobs in Western New York is an issue that impacts the entire region's economy.

Google wanted to build a server facility Medina, but the New York Power Authority would not help Google get low-cost power to the plant, which is a prerequisite for any of Google's hosting facilities.

The Daily's story fully captures the frustration over the situation.

State Sen. George Maziarz blasted NYPA for denying Google and other companies that have wanted to build in Western New York. Maziarz lambasted NYPA officials Thursday in Albany during a public hearing to raise electric rates by 12 percent.

“I personally worked over two years with a small company headquartered in San Francisco called Google that wanted desperately to locate in Western New York and were told there was no power available to them,” Maziarz said during Thursday’s hearing.

He blamed NYPA “for killing the deals and the jobs that go along with them.”

Maziarz went on to call NYPA officials liars and thieves.

If Niagara power can potentially  be acquired cheaply, as Tom Rivers points out in the story, to spur business growth, how does it possibly make sense for NYPA to thwart business expansion in a region that desperately needs that job growth?

We just received a press release from United Memorial Medical Center stating that 14 employees were laid off in Januray, and previously 16 vacant positions were eliminated, in response to the economic downturn.

For the past three months, United Memorial has been working to take pro-active steps in positioning the organization to effectively cope with the impact of reduced reimbursements from governmental payers and the effects of the declining stock market. To remain financially viable and protect the high level of service provided to our patients, we have applied organizational changes.

United Memorial began implementing several cost saving strategies in January which included limiting expenses unrelated to patient care, restricting the travel and education budgets and re-evaluating projects and capital purchases. All contracts for supplies, utilities and services were re-examined for cost savings. The Cardiac Rehab program was altered to increase class size and allow fewer days of operation. The Process Improvement Department was restructured under Quality Management and the employee shuttle service was outsourced.

As a part of this process, 16 vacant open positions with the equivalent hours of 12 full time employees were eliminated and since January, 14 employees were let go. While the 14 individuals affected by this action account for less than 2% of our 770 person workforce, they were our colleagues, co-workers and friends. Each possessed admirable work ethics and they have collectively provided the Hospital with decades of respected service. Those that were eligible were offered severance packages and where appropriate, options to extend their healthcare coverage.

The eliminated positions include three in management and 27 support staff.

The Surgical Expansion and Affordable Senior Housing Projects will continue as planned. The Hospital leadership team has worked conscientiously to make decisions that will allow United Memorial to continue to grow and provide quality services that meet the healthcare needs of our community.