Thursday, October 4, 2012

Killing Blue Collar Jobs


    The answer to why New York City has increasingly inadequate blue collar employment can be found at the Department of City Planning, which regulates zoning issues.

     That may sound odd, but the fact is, blue collar employment in the manufacturing sector is literally being zoned out of existence. (“Zoning,” as defined by the Harper Collins Dictionary of American Government & Politics, is “The process by which local government can designate the types of structures and activities for a given area.”)

    Land use planning policies that have chased factories out have devastated the job supply and created an urban economy that is increasingly fragile.  

    The Pratt Center for Community Development reports that “Even as the demand for goods in New York City remains strong, city government’s own policies are threatening manufacturer’s ability to do business here. When Mayor Bloomberg came into office in 2002, New York City had 12,542 acres of land where manufacturing businesses could legally operate. Today, thanks to zoning changes, it has fewer than 10,746, and another 1,800 acres would be converted to other uses under additional rezoning proposed by the Bloomberg administration.  If the planned rezoning goes through, New York City will have lost 20 percent of all its manufacturing space in the span of just a few years.  Of the 95 New York City re-zonings from 2003 to 2008, one-quarter converted manufacturing districts into some other category of land use…not one added a single acre of new space for manufacturers.”

     Unfortunately, New York City is not alone in its assault on manufacturing and the above-average wages that it produces.  An examination indicates that American manufacturing is being devastated by a number of factors, including the highest corporate taxes among industrialized nations; an increasingly burdensome regulatory regime; a weak national and global economy; a downturn in federal support for cutting-edge R&D; a slowdown in military procurement of major weapons systems; the rise of China, with its cheaply paid labor force, and that nation’s unfair competitive practices, as well as intellectual property theft; an increasingly poorly schooled workforce; and high energy costs.

    Regulatory burdens are the key factor depressing manufacturing in the United States.  Kevin Williamson recently wrote in National Review that the cost of regulatory compliance—which may be between one and two trillion dollars annually—is a bigger burden than taxes. He noted that, in addition to the cost, the regulatory burden is more infuriating because “you can boot out your representative if he votes for a tax hike, but you can’t vote out executive-branch bureaucrats.”  In many cases, the regulatory system is geared against the very type of ingenious, highly productive new firms the nation needs to rejuvenate its industrial base in favor of politically connected older companies with the capital to hire powerful lobbyists to influence politicians. 

    The increasing problem of complying with politically-oriented regulations that produce no benefit, particularly those relating to the environment, has accelerated manufacturing’s decline. The Competitive Enterprise Institute worries that “The pace at which the Obama administration has issued new Clean Air Act regulations unrelated to carbon dioxide is without precedent in the statute’s 40 year history…”  Compliance costs are in the trillion dollar range—if compliance can be done at all.  Some of the demands call for the purchase and implementation of technology that is not yet available. 

   In an attempt to save the U.S. economy, The House of Representatives has passed H.R. 10: Regulations From the Executive in need of Scrutiny Act, better known as REINS. The bill is not expected to pass the Senate and would certainly be vetoed by President Obama if it ever did.  With only minor exceptions, the vote on the bill followed straight party lines, with Republicans favoring it and almost all but four Democrats voting against it.  The purpose of the bill is to limit the ability of the White House and its Environmental Protection Agency to implement economically harmful regulations without appropriate oversight, and a clear rationale of why the measures are actually needed.

   America’s manufacturing, unemployment and national debt crises must not be prolonged by “bureaucrats gone wild.” 

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