Tom Corbett - A Jobs Producing Governor

By Greg Harvey, Treasurer

When normal non-economists like us discuss the economy, we talk about jobs- the unemployment rate, whether companies are hiring or firing, etc. Sure, we may mention GDP or the trade balance, but the jobs report is the only tangible measure by which we can actually gauge economic performance. And this focus on jobs is not unwise, as many other economic measurements (such as those previously mentioned) are affected by the health of the labor force. Such a focus on jobs leads to the conclusion that Pennsylvania under Governor Tom Corbett is in a promising position as supported by the data explained in this post.

When Corbett came into office in 2011, the nation was still struggling from the 2008 crash. Though the Great Recession had ended (on paper) in June, 2009, the economy was in a period of economic stagnation, with unemployment stuck at around 9%. Pennsylvania was in a relatively better position at roughly 8% unemployment, but it was far from optimum. Something had to be done.

Once in office, Corbett began a series of business friendly policies which, as will be discussed later, have succeeded in boosting Pennsylvanian job creation. Perhaps most notably, he promoted natural gas drilling; the effects of which were written about by the Bureau of Labor Statistics. Basically, largely because of Corbett’s support, Pennsylvania has become the second largest natural gas drilling state in terms of employment. Other states in the Marcellus Shale generally have less friendly business policies, like New York which bans fracking outright, and have not come even remotely close to matching Pennsylvania’s success. And these jobs, whose average pay of $83,000 easily beat the state’s median pay of $52,267, help to support many other PA industries, according to a Penn State study. Essentially, we can assume that many job gains in other industries since the drilling boom began were caused by Corbett’s adoption of natural gas drilling.

Even though the natural gas industry has been Corbett’s greatest economic success, he has done much more to make Pennsylvania a business friendly state. He’s introduced budgets that would end the simultaneous taxation of business income and business assets, reduce the state corporate tax rate (PA’s rate being the highest in the nation), and allow start-up business tax deductions to aid new businesses, among other positive plans.

Obviously, this would all be for naught if success didn’t follow. Thankfully, Corbett’s plans are working. In June, 2014, Pennsylvania’s unemployment rate dropped to 5.6%, well below the national average of 6.1% and even further from the 8.1% rate Corbett began with. And, considering that Corbett oversaw a decrease of 55,000 government positions, it’s clear that the private sector, easily the most important aspect of the economy, has done very well during Corbett’s term.

However, as with most of Corbett’s accomplishments, there is some ridicule of his performance.  Critics tend to point to PA’s 47^th ranking of job creation in percent since 2011. However, as George Washington University economist Tara Sinclair points out, it’s expected that Pennsylvania’s job growth would be lower than other states because PA was hurt less during the Great Recession compared to the rest of the country. In other words, while other states may gain a larger percentage of growth, it’s merely to replace what they lost, and PA simply has less to replace.

Overall, the job market has made tremendous strides under Governor Tom Corbett. His adoption of business friendly policies, including natural gas companies, has put Pennsylvania in a much better position than when he took over in 2011. However, as is typical nationwide, our economy is not out of the woods yet. Therefore, we need Corbett, because no other candidate will embrace business and subsequently foster job creation like our governor has.

Rebutting "Five Easy Steps..."

Anthony Beard
BUCR Advisor

The campus community was recently forwarded this link to an article titled "How the American University Was Killed, In Five Easy Steps", which basically blames the entire downfall of higher education on conservative principles.  Thought it was important to share a rebuttal.  So far this summer my reading has focused on intellectual works such as Atlas Shrugged and Academically Adrift, so it’s nice to have some light reading that requires less thinking. 

I would say while I obviously agree with the premise of the importance of education, it’s a wild assumption to think that H.G. Wells was specifically speaking of higher education.  To think that traditional university or college education is the penultimate education one can receive in life strikes me as a bit narcissistic.  What I find even more narcissistic is the thought that a faculty member’s wage is equivalent to a migrant worker.  I read The Press Enterprise and I sincerely believe George Milton would disagree.

By no means do I disagree with the downfall of higher education being linked to “poor educational outcomes in our graduates, the out-of-control tuitions and crippling student loan debt.”  As I rebut this article I see the same issues, but recognize the true causes of them.

Before I get to that, I would also point out that I am neither a war-monger or a corporation, yet I am not foolish enough to see things as simply black and white as this article does and assume that the culturally liberal upheaval of the 1960s didn’t come with any drawbacks, such as out of wedlock birth, which leads to increased poverty, which leads to more crime and (ironically enough) less education.  I’m grateful that the 60s brought us open-mindedness, but as all revolutions do, they also brought about consequences.  You don’t need to love war and big business to see that.

But on to the rebuttal...

#1: First, you defund public higher education

To address one immediate thought, Pennsylvania is not defunding education; the oft perpetuated lie.  State funding of basic education has steadily increased each year going back to the 2010-2011 fiscal year (the final year under Governor Ed Rendell).  Some folks get confused, since there was federal stimulus money that was added to the expenditure in 2009-2010 and 2010-2011, but when it comes to how much Pennsylvania taxpayer money is going to basic education, it has increased each year under Governor Tom Corbett.

The writer seems to go on a tangent when the topic of attacking political correctness comes up.  So to quickly address that, political correctness runs completely counter to the idea of open dissent, the downfall of which the writer laments.  It can’t go both ways.  We cannot champion being PC and also expect dissention.  The very essence of being politically correct means we cannot say what we honestly think; thereby, avoiding true dissent.  Unless, of course, the actual goal is to just dissent against opinions we dislike.  Personally, I find it remarkable when a student dissents against such a lack of diverse thought in higher education,

Back to topic, it’s a safe area of agreement to say that the percent of 18-25 year olds enrolled in undergraduate studies has generally increased over the years.  While the historic value of higher education in the area of humanities and liberal arts cannot be understated, we can simply not have more and more of our young adults enrolling in these studies, or else it will contribute to a consistent unemployment rate of over 7% (like we've had for years).  I stand by the merits of fields of study such as English, history, psychology, and economics, but they rarely have a positive result in employment.  The immediate defense of these studies is the intangible benefit of “expand[ing] the mind, develop[ing] a more completed human being, [and] a more actively intelligent person and involved citizen.”  Ignoring how differently one can define “complete”, “intelligent”, and “involved,” it’s important to consider the cost of that benefit.  Is it worth the student accumulating over $35,200 in debt to earn a degree that leaves him or her unemployed or underemployed?  Is it worth taxpayer money for a student to earn a degree in philosophy, but now finds him or herself unable to pay rent and needs to move back in with his or her parents?  And while underemployed, interest continues to build.  What is a poor liberal arts major to do?  Why, grad school of course!  And while more debt is being added for this education, assuming the student has not received more taxpayer money for a likely useless degree, more interest accrues and the student is not earning money during that time to pay off any debt.  Gleaning lessons from recent housing turmoil, we know that owing more money than something is actually worth is chaos.  This will inevitably lead us to a burst in the higher education bubble.

In addition, there is evidence to suggest the more federal government gets involved with paying for education, the more expensive it becomes.  When you subsidize something, you get more of it.  So if tuition is subsidized, there will be more tuition.  And just forgiving debt doesn’t solve any actual problem.

And quite briefly, while the article bemoans the attempt of conservatives to more easily manipulate citizens, I think there are countless articles and books that would argue that students are inundated with liberalism (which is even getting more extreme) at college (and in The Department of Education) far more than conservatism, which makes a mockery of the writer’s premise.  It is not the conservatives that are at the forefront of indoctrination.

 

Minimum Wage Brings Unexpected Increases

by Grant Murrow

originally published by The Voice on March 14, 2013
http://www.buvoice.com/opinion/2013/3/14/minumum-wage-brings-unexpected-increases.html

During his State of the Union address in February, President Obama announced his plan to raise the federal minimum wage from $7.25 per hour to $9 per hour. He claims that this raise would lead to a “raise in the incomes of millions of working families. It could mean the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead. For businesses across the country, it would mean customers with more money in their pockets.” However, this is not the case.

His claim of having more money in your pocket may be true in cases of employees of conglomerate employers, such as Wal-Mart or Target, but smaller businesses cannot afford to pay that much to their employees. If a company can save on labor, they will. Cutting into profits of a business by forcing a raise in wages will eventually cause them to raise their own prices in an effort to soften the impact. If it does not come in a raise in prices, it will likely come in a form that hurts the company’s employees such as, reduced hours, reduction of fringe benefits, installing machinery to take the place of workers, and even more detrimental-the higher likelihood of hiring illegal immigrants. All of which, in turn, hurt the American economy and people.

It may also lead to an increase in general unemployment. For example, the minimum wage in the state of Washington is linked to inflation, which is currently $9.19, and the unemployment rate is 7.6%. This reflects the fact that an increased minimum wage will not help employment decrease, and may even have the opposite effect in some cases. Also, as a secondary result of unemployment, crime in the areas with higher unemployment will undoubtedly rise. However, the people most affected by an increase in minimum wages are teenagers and young adults.

The people who minimum wage most affects are teenagers, the unskilled, minorities, those involved in low wage industries, and those not unionized. According to the Bureau of Labor Statistics and the United States Census report, 18.063 million young Americans, 66% of Americans over the age of 18 whom do not have a degree, 32.28% of Americans whom are minorities, 3.6 million workers who are involved in low wage labor, and 95.8% of Americans ages 16 to 24 who are not unionized would all be affected by this increase. Clearly, this would alter the life styles of a lot of people in a very negative way. All of the groups previously listed could have to deal with reduced work hours, benefit cuts, and ultimately layoffs. Thus putting a negative mark on the economy as a whole, and put people like us at the bottom of the ladder.

An increase to minimum wage and dropping profits would leave less money to go around. People like the students here at Bloomsburg University are prime targets for these losses, as we haven’t yet had a chance to enter the job market and gain experience. So what can be done to save jobs for people like us who don’t yet have our degree? Firstly, after a formal bill or law is announced, write to our congressmen. Tell them your opinion on the matter and ask them to act on your behalf in congress. Secondly, make yourself indispensable at your job. Take the time to learn your job and become the best you can at it, and make sure that your boss sees your potential. Lastly, study, and study hard. Your degree may be the difference between feeling the effects of the minimum wage increase or getting ahead.

A Jobless Economy: Obama's Polices are Damaging

by Zach Moore

originally published by The Voice on February 21, 2013
http://www.buvoice.com/opinion/2013/2/20/a-jobless-economy-obamas-policies-are-damaging.html

While graduation from higher education is supposed to be a colossal leap to an affluent future, a sluggish labor market awaits the average college student’s resume. With unemployment soaring nation-wide, there is an alarming level of unemployment of college graduates ages 25 and younger. According to the Department of Labor Statistics, 53 percent college graduates are unemployed or underemployed, and the diminutive amount of employed graduates is earning a median salary of a mere $27,000. This figure is a depreciated $3,000 less than students who earned a degree before the year 2007.

 

Moreover, out of the college graduates under the age of 25 who were working in 2011, 37.8 percent were working in a job that did not require a college degree, according to bls.gov. As these statistics develop, it is seen that there has been a serious decline over the last four years in which students have spent working extremely hard to ensure a prosperous future. Note that in 2007, around the time that Bloomsburg seniors were beginning the journey of a college education, the unemployment rate of recent college graduates was 5.7 percent. Through this, the question of who is to blame arises.

 

Over the last four years, President Obama has made a tremendous dent in the economy in which we reside. Students have been victims to the president’s detrimental policies already. This is seen through many aspects of a young American’s life, an example being tuition rates, which have gone up 25 percent under the president, according to bls.gov. All this while a landmark one trillion total student debt has accumulated. Through this we see that not only has President Obama made it increasingly harder for college students to find a job, but once they do accomplish this near impossible task, they will have a larger debt than any other graduates in history. If this is not bad enough, once graduates begin to dig themselves out of this bottomless pit of debt, they will have a very hard time doing so because of the falling median income under President Obama.

 

It is very simple for the eye to see a distinct downfall marked by the start of Barack Obama’s presidency. When President George W. Bush left office, the unemployment rate of young American’s 25 and younger was an astonishing 5.4 percent as reported on bls.gov. Sadly, four years later we see an unemployment rate of the same group of American’s hovering just below nine percent. These disturbing figures are a direct reflection of President Obama’s damaging economic policies. Until the president stops implementing policies that hurt American businesses, employers will continue to not hire. Even if they do choose to employ a graduate, an exponentially smaller figure of capital will be put into your pocket.

 

President Obama has raised taxes on employers to the highest in recent history. The results of this are obvious: when employers have less money, they are no longer investing, no longer hiring, and most importantly no longer growing fiscally. Until President Obama does more to create economic growth, such as financially encouraging employers to hire young, educated Americans, underemployment and unemployment will continue to rise.

 

The “investment” of higher education will continue to diminish as President Obama’s disastrous economic policies continue, and the true value of a degree will no longer exist. Please examine this simple equation of economics: high unemployment, combined with record setting landmarks of student debt, equals a slow and distraught economy, which our generation is now pioneering. If we, the young Americans, the future of the United States, cannot prosper, who possibly can?