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Dear Senators Kaminsky and Stec, Chair and Ranking Member of the Senate Environmental Conservation Committee, and Assemblymen Englebright and Smullen, Chair and Ranking Member of the Assembly Committee on Environmental Conservation,
We write to ask that you support the advancement from Committee of Senate Bill S4028 (A4213 in the Assembly), also known as “The Kelp Bill,” sponsored by Senator Anthony H. Palumbo and Assemblyman Fred W. Thiele, Jr.
The bill adds “and seaweed” to an existing statute that allows shellfish farming in the Peconic and Gardiners’ Bays. This would open a valuable economic opportunity for further developing the ‘blue economy’ in this time of recession. Passage of this bill will have immediate benefits for local kelp farmers, who planted a crop for a three-year Stony Brook University feasibility study but are presently unable to harvest and sell their kelp without a legal framework applicable to their industry.
Exploratory kelp farming projects in the area have already made steady and promising advances. The Stony Brook University study mentioned above was conducted with input from GreenWave, a Connecticut-based organization and international leader in the regenerative ocean farming industry. This study established the potential for seaweed farming to bring a broad spectrum of benefits to the people, the economy and the coastal ecosystems of the East End, while also contributing to climate change mitigation through the absorption of excess carbon. This work lays the foundation for a regenerative industry to emerge around kelp as a new crop in eastern Suffolk County.
Notably, this is a non-partisan issue: the bill received unanimous support from the Department of Environment’s Marine Resources Advisory Council in 2018 – an unusual rallying point for a group that rarely votes 10-0.
In light of the wide range of benefits that kelp farming will provide, and the bi-partisan support, we urge you to advance The Kelp Bill and to support its passage in the Senate and Assembly.
Thank you for your leadership and consideration.
Dr. Ayana Elizabeth Johnson
Founder and CEO, Ocean Collective
Scott Bluedorn
East Hampton Energy Sustainability Committee
Kate Rossi-Snook
Environmental Advocate, Concerned Citizens of Montauk
Mary Morgan
Cofounder, Drawdown East End
Diane Shapiro
Ambassador, Drawdown East End
Sean Barrett
Cofounder, Dock to Dish Montauk
Jenny Willis
Climate Activist, Eat More Kelp
Chef Trevor Swope
Climate Activist
Kim Knoll
Concerned Citizen
Cassia Patel
Cofounder, Oceanic Global
Lea d’Auriol
Cofounder, Oceanic Global
Peter Strugatz
Concerned Citizen
Chef Kerry Heffernan
Grand Banks, Pilot Brooklyn, Island Oyster, Drift In Restaurants, NYC
Postscript

If we want to save what’s left, from our pristine waters to our local economy, we have to accelerate our regenerative engagement with Nature.
We need a new paradigm
We need a new paradigm for doing business while ensuring the maintenance of biodiversity and its values, says the International Union for Conservation of Nature.
What is the blue-green economy?
A combination of the green economy, with strategies that focus on energy, transport, agriculture and forestry, and the blue economy, which focuses on fisheries and marine and coastal resources, says the UK Commonwealth Foundation .
Kelp is a Drawdown Solution
Kelp forests are the basis and habitat for vibrant ocean ecosystems. With the potential to grow up to half a meter a day, kelp is also an excellent means of sequestering carbon as it grows, with enormous carbon sequestration potential.
Seaweed, like land plants, use photosynthesis to turn carbon dioxide (CO2) into seaweed biomass (carbon sequestration) and release oxygen. Seaweed grows very fast so it can intake CO2 at a phenomenal rate. The CO2 is locked up in seaweed biomass and the seaweed can be harvested for use, or, it can sink to the seafloor or become stored under the sea floor (similar to soil sequestration). For more, check out this article by a marine ecologist Seaweed is About to Blow Your Climate Mind and her highlight of the Port of San Diego’s Blue Economy Incubator to support emerging aquaculture and blue technology businesses.
Project Drawdown has assessed a very limited selection of coastal and ocean solutions to date. This solution set will expand in the future (e.g., solutions for regenerative ocean farming and marine ecosystem restoration).
Sugar Kelp is Local
Local sugar kelp (latissima saccharina) is native to our waters, is an extremely beneficial habitat for marine and mitigates against harmful algal blooms. As a commercial product, Sugar kelp is superfood, a thickening agent, a soil fertilizer, and has biofuel and bioplastic applications. Growing kelp, i.e. marine permaculture, can help regenerate our waters and provide sustainable local financial and health returns. Let’s grow, use and eat more kelp!
]]>By John Tepper Marlin and Steven Newman October 1, 2020
President Trump’s three main economic initiatives have been radical 2017 cuts in taxes (at the expense of states and localities), unprecedented high tariffs on Chinese goods, and “deregulation” of federal agencies (entailing rejection of science-based programs). These initiatives have turned Washington, D.C., and the country upside down. How has this worked out? Following are some outcomes.
Mr. Trump’s denial of Covid-19 gives him ownership of its economic impact: The virus is not just an act of God. Mr. Trump’s knowing denial of its threat and refusal to recommend wearing masks immediately was a betrayal of his country. The pandemic is a national challenge just as much as the 9/11 attack on the World Trade Center towers. An early science-based national response would have greatly reduced the huge negative economic impact.
The corporate tax cuts did not deliver on business investment: The main idea behind the 2017 Tax Act was to reduce the top federal tax rate on corporations from 35 percent to 25 percent. At the last minute, the law, which skipped customary hearings and staff analysis, took the tax rate down to 21 percent, even lower than its major advocates had asked for. Mr. Trump claimed the law would close tax loopholes, about which his newly uncovered tax returns show him to be informed. But few loopholes were closed by the 2017 law. He said businesses would invest the money and thereby create jobs. But after a few months, corporations switched to using the money to buy back their stock, which made a negligible contribution to job creation.
The impact of a fiscal change on the economy is measured by the “fiscal multiplier” — the change in gross domestic product for each dollar of change in tax cuts or spending. A 2015 Congressional Budget Office analysis concludes that fiscal multipliers are more successful for spending programs than tax cuts, for lower-income than for higher-income taxpayers, and for periods of recession than for booms. A widely cited fiscal multiplier for corporate tax cuts is only 0.32, compared with multipliers of 1.71 for an increase in food stamps, 1.55 for extending unemployment benefits, and 1.44 for infrastructure investment.
Tax cuts for individuals: The Tax Act substantially reduced tax rates for the top personal income brackets. When new money gets into the hands of average people, they spend it, because they have real needs that are not being met. This is not true for the very rich. Nevertheless, Mr. Trump argued that tax breaks should go to highest-income taxpayers. Policies that increase unemployment benefits, child credits, and food stamps are not only more equitable, they also generate more jobs.
The Tax Act’s cap on the SALT deduction hit New York State hard: The lowering of the corporate tax rate from 35 percent to 21 percent in 2017 was paid for in part by a radical cap on the deductibility of state and local taxes (SALT) at $10,000 per taxpaying unit, whether single or married and filing jointly. This cap was deliberately targeted at higher-tax blue states. New York State has suffered the most, as indicated by the July jobs data, the latest we have. Jobs were down from a year earlier in every one of the nation’s 49 metro areas with a 2010 census population of 1 million or more. They are below the level of five years ago in more than half of these metro areas.
The five worst-hit metro areas in the country over five years include all three of the large New York State metros — Rochester, Buffalo, and New York City (which takes in a wide swath including Westchester, Nassau, and Suffolk Counties, northern New Jersey, and a piece of Pennsylvania). The SALT cap was a shock to state and local officials, who are scrambling to address lost tax revenues, and one of the hardest-hit cities is New York, which, unlike the federal government, must raise new taxes, cut spending, or borrow. That’s a choice between higher taxes, fewer employees, or postponed fiscal stress. Cutting the quality of services, from sanitation and health care to schools, will affect real estate values just as much as high taxes. Coupled with new interest in less-dense living to avoid exposure to Covid-19, this is making the East End of Long Island a beneficiary. But Suffolk can’t afford to let the engine of its prosperity falter.
The cap on the SALT deduction encourages moves by higher-income residents: The cap on the SALT deduction has made it more attractive and urgent for higher-income individuals to move to lower-tax states and communities. Blue-state residents have been moving to red states and will presumably seek to raise standards of education and other government services in their new locations. One silver lining is that it doesn’t take very many people moving from a populous blue state to increase electoral support for quality education in a small red state. Residents of New Jersey and New York are moving to Florida, while Californians are moving to Idaho and Nevada. Residents of New York City are moving to less-dense communities like East Hampton. Activism for better-quality services may generate some surprises in future elections.
Stressed states and localities need cash and are not getting it: This fiscal year has caught nearly every government by surprise. The CARES Act gave the Federal Reserve the right to lend to states and localities, but the Fed is acting as if the facility is intended as a last resort, for municipalities that can’t obtain private financing. But the municipal bond industry and many state laws favor long-term investment, not financing an operating deficit. Forcing municipalities to cut spending while the coronavirus crisis is still at our door is reverse Keynesian of the kind that exacerbated the worst years of the Great Depression.
Fortunately for the Town of East Hampton, the supervisor, Peter Van Scoyoc, and the town board have been able to keep the town functioning on a steady basis, but concentrating federal aid on businesses rather than local government means less fortunate communities face bleak options.
Tariffs on Chinese goods: Mr. Trump’s radical high-tariff moves are being paid not by Chinese producers but by American retailers and consumers, especially the fashion industry, which is suffering a knockout blow. China’s response to the U.S. tariffs has been to divert key supplies to Europe and has created shortages in this country — for example, in personal protective equipment and many medicines. China has meanwhile retaliated with tariffs on U.S. farm products. The relief program seems to have been concentrated on large agribusinesses, leaving small farmers without aid.
Deregulation has created new risks: The president’s science-denying efforts to roll back environmental, pharmaceutical, and other safety regulations have increased risks in each of these areas and have hampered a national response to the Covid-19 pandemic.
Over all, the economy has fared poorly. Yet the stock market has had an astonishingly good run. The main reason is that some corporations have been buying back their stock and the Federal Reserve has been flooding the financial markets with liquidity to help banks make loans and stave off business bankruptcies. Historically, the total return on stocks in the S&P 500 since 1947 has been higher under Democratic presidents, 10.8 percent per year, versus a rate under Republicans of 5.6 percent per year. The top performance was under Presidents Clinton and Obama, while the most negative was under Nixon and George W. Bush.
It’s a case of an open spigot for big business and a parched earth for states and local governments and nonprofits. This has left New York City in a financial crisis, but East Hampton has been relatively unscathed.
John Tepper Marlin has lived in Springs since 1981. He was for 20 years a federal government economist and the chief economist to three New York City comptrollers. Steven Newman, a resident of Queens, was chief of staff and first deputy to two New York City comptrollers.
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Some insightful letters to Newsday:
The behavior of a few unruly demonstrators at the recent Commack protest was shameful [“Trump cheers LI protesters,” News, May 17]. If these few were, say, 4% of the
demonstrators, the other 96% could have and should have shouted them down. That
small group was aggressive, inconsiderate of others, and shameful. They think guns
and shouting and flags and MAGA hats combine to show they are correct. Where were the others with similar opinions who could discredit the shameful actions of those few? Why aren’t President Donald Trump and Fox News condemning what those few did? I hope other readers will react the same way, and I hope Newsday publishes their condemnation of those few.
Jan Huml, Bohemia
Friends from out of state were calling me and asking what’s wrong with the people here who harassed a TV reporter at a rally in Commack. I’m embarrassed by the sheer ignorance and arrogance of these people who don’t care about the coronavirus or who dies from it. Salons, gyms and nonessential business closings were the only thing that kept this virus from even more tragic consequences. These screaming people need to get a clue. As for me, I don’t care if you’re not smart enough to do the right thing. Go catch
the virus but keep it in your own circle. You shouldn’t be allowed to spread it to those
of us who abide by the state mandates.
Carol Galati, Ridge
We read how President Donald Trump worked his magic and people who had apologized for their appalling behavior were suddenly not at all sorry. That’s the president’s special sauce -— bring out the worst in people. On May 15, Trump tweeted, “Fake news is not essential,” with a video retweet of the ‘Setauket Patriots’ protest. The next day, he
tweeted that the TV reporter was an “enemy of the people.” Although the group had
apologized two days before, blaming a “few idiots” and “outsiders unaffiliated with the group” for harassing him, once they got the presidential nod, they reverted back to form, tweeting, “Thank You President Trump.” In November, it’s up to us to send Trump and his enablers packing.
Carol Deistler, Springs
The protesters who want to rush into opening Long Island with no precautions are like Typhoid Mary, who argued she should be free to live her life even if she infected others because she wasn’t sick herself [“We’re all Typhoid Mary now,” News, May 17]. We all want to resume a normal life, but most of us want to proceed with caution to lower the risk for the vulnerable. You can’t do that if you have a herd of people who don’t care if they are infected or if they infect others. Some, egged on by the Rush Limbaughs of the world, think it is no big deal if we cull the herd of the elderly, the sick and the poor. I am
most appalled by those protesters who call themselves Christians. Jesus did not tell his followers to turn their backs on the vulnerable. It is the exact opposite of what he said.
Bill Bence, East Meadow
Newsday’s editorial about the protesters who harassed that News 12 reporter got me
angry all over again [“Protesters behaving badly,” May 19]. To me, this small band of
haters in no way represents the larger majority of Long Islanders, and yet we now
seem to be singled out by President Donald Trump as being his supporters. I’m even
more upset by my local Republican representatives who now choose to just stand by
and do nothing to admonish the president or the protesters for their actions. I need to
remind them that we, the voting public, have very long memories and come November
will hold them accountable for their actions. I was and had been a conservative
Republican for 50 years — but not anymore.
Frank Socci, West Babylon
Suffolk County Executive Steve Bellone said in “Trump cheers LI protesters” [News,
May 17], responding to the president’s tweets, that he did not want “to get into any
kind of back and forth on what the president may be saying.” We understand Bellone’s
position as a politician in a county hard hit by COVID-19. President Donald Trump’s remarks aren’t overtly subversive, but I see them that way. He is really calling those who harassed News 12 Long Island reporter Kevin Vesey “great people,” showing Trump supports a fanatical base, the more fanatical the better. When he tweets, “Fake news is not essential,” he shows he understands the power of a free press and will actively undermine it at every turn. We must conclude that his concept of governing is antithetical to our representative, democratic ideals. I have only one question: President Trump, have you read the First Amendment, which guarantees the right to peaceably assemble — and a free press? It’s only 45 words, Mr. President, and it’s a good read.
Katherine Curcio-Payne, Seaford
A few days ago I called the Suffolk County Department of Health to inquire about getting COVID-19 tests done on people that had recently returned from international travel to countries with now well-documented outbreaks. These persons also had flu-like symptoms. The county officials thought this did not meet CDC criteria for testing (no high fever and no acute respiratory distress) and they recommended self-isolation. I know first hand how unreliable self-isolation can be! A recent news report confirmed my suspicions when a Missouri patient’s family broke quarantine to attend a school dance!
The problems seem to have been threefold — the Centers for Disease Control did not move quickly enough to manufacture test kits at scale (either because of lack of funding or political will) nor did it open up testing options to other institutions that could have worked to develop tests — and because of the limited availability of tests, the CDC rationed how many tests were performed. Those issues were compounded by the initial release of faulty tests by the CDC in early February.
As former U.S. Food and Drug Administration official Scott Gottlieb wrote on Twitter in early February, “Since CDC and FDA haven’t authorized public health or hospital labs to run the tests, right now #CDC is the only place that can.
Also, the CDC has somewhat arbitrary criteria (?) for placing countries on the list of places that will increase your risk of having contracted COVID-19. Here is a list of countries with documented cases as a percentage of the population size. Level 3 Travel Health Advisory (CDC) applies only to the top 4 on the list. Note that Bahrain with 5.42 documented cases/100,000 inhabitants does not make the list while China with 5.79 does! Neither does Switzerland with 3.96 cases, where many cases have been tourists from its southern neighbor, Italy.

The above graph comes from a local Swiss Newspaper (NZZ) – test your German skills!
By January there was a test available. It was offered worldwide by Roche, Inc. FOR FREE and to any country in the world! The US declined the offer. Read more about these early missteps here.

The above report is from a Zurich Newspaper: note the date on the sample is Jan 29th 2020.
Note also, patients that took the test were billed about $200 (SFR 180) for labor of administering the test. That was their entire cost.
At the time an astute observer commented: “It’s very difficult to understand that countries like the US didn’t seize the opportunity to get the test for free. Perhaps some US companies wanted to make money by developing their own tests?”
Thermo Fisher Scientific corporation provides the COVID-19 test in the US currently. According to the Associated Press, Donald Trump, has listed investments in Thermo Fisher Scientific Corporation (TMO), which moved jobs out of the U.S. in high profile outsourcing deals. Apparently, Donald Trump stands to profit from medical testing of coronavirus that will now take place in the United States.
The reason that COVID-19 cases are low in the USA is most likely because it has been difficult to get patients tested.
For instance, a recent CDC conference gave us a glimpse into Trump’s view of the coronavirus as a political rather than health issue. Trump said he would rather have the passengers of the Grand Princess, a cruise ship docked in San Francisco with 21 confirmed cases on board, stay on the ship than move to land — all because doing so would raise the number of total Covid-19 cases in the US:
“I would rather because I like the numbers being where they are,” Trump said. “I don’t need to have the numbers double because of one ship that wasn’t our fault.”
It is unclear how many people have been infected by the virus due simply to a delay in testing, but it has become increasingly clear in recent days that there are Americans infected with the virus across the country. It is naive to think that one can suppress the numbers.
Trump fears the fall out on the economy and indirectly on his political chances in November. But his actions are likely to make things worse for himself.
The coronavirus outbreak has U.S. companies starting to shutter offices and send workers home through layoffs, furloughs or directives to telecommute until health risks from the spreading virus recede. Even if that’s helpful to guard against further spread of the disease, it’s triggering widespread uncertainty and the biggest threat to the labor market since the financial crisis almost a dozen years ago.
The evidence is expected to show up through lost consumer spending.
“If workers can’t work … production and income go down,” Georgetown University economist Harry Holzer said. “That becomes a demand problem if workers lose income and stop spending.” When that happens, “odds of recession can go way up.”
Eleven states, including California, Massachusetts and New York, require employers to offer workers paid leave, as does the District of Columbia. But none of these jurisdictions explicitly guarantee the benefit to healthy workers on leave because a virus outbreak sent everybody home.
Fourteen Democratic senators last week wrote to leaders of the Business Roundtable, the Chamber of Commerce and the National Association of Manufacturers to urge their member companies not to penalize workers for going home during the outbreak.
Paid sick days are particularly rare for low-income workers. Ninety-three percent of workers in the top tenth of the income distribution get paid sick leave, compared with only 30 percent of those in the bottom tenth, according to the Economic Policy Institute, a left-leaning think tank.
Finally, let’s consider our health care system and how it is ill-suited to handle a pandemic: America’s Health System Will Likely Make the Coronavirus Outbreak Worse
Out-of-network costs, high deductibles, and confusing coverage options may keep people from getting tested or receiving care (Abigail Abrams)
Deductibles, networks, and a complicated insurance bureaucracy—that already make it tough for many Americans to afford medical care under normal conditions will likely make the outbreak worse.
First, people must actually choose to get tested—a potentially expensive prospect for millions of Americans. While the government will cover the cost of testing for Medicaid and Medicare patients, and for tests administered at federal, state and local public health labs, it’s unclear how much patients will be charged for testing at academic or commercial facilities, or whether those facilities must be in patients’ insurance networks. Just recently, a Miami man received a $3,270.75 bill after going to the hospital feeling sick following a work trip to China. (He tested positive for the seasonal flu, so did not have the new coronavirus, and was sent home to recover.)
Those who test positive for COVID-19 possibly face an even more financially harrowing path forward. Seeking out appropriate medical care or submitting to quarantines—critical in preventing the virus from spreading further—both come with potentially astronomical price tags in the U.S. Last month, a Pennsylvania man received $3,918 in bills after being released from a mandatory U.S. government quarantine after he and his daughter were evacuated from China. (Both the Miami and Pennsylvania patients saw their bills decrease after journalists reported on them, but they still owe thousands.)
In 2019, 82% of workers with health insurance through their employer had an annual deductible, up from 63% a decade ago, according to a report from the Kaiser Family Foundation. The average deductible for a single person with employer insurance has increased from $533 in 2009 to $1,396 last year. The timing of the new coronavirus at the beginning of the year makes the outlook even worse: because most deductibles reset each January, millions of Americans will be paying thousands out of pocket before their insurance companies pay a cent.
Many patients may simply decide not to go to the doctor, which is “exactly the opposite of what we want to happen in this type of situation.”
Public health experts and Democrats have also criticized the Trump administration’s decision to allow people to sidestep the Affordable Care Act’s rules and buy limited, short-term health insurance coverage. Such “junk plans,” are not required to cover diagnostic tests or vaccines.
A large group of health, law and other experts released a letter this week urging policymakers to “ensure comprehensive and affordable access to testing, including for the uninsured.”
The Trump Administration is considering using a national disaster recovery program to reimburse hospitals and doctors for treating uninsured COVID-19 patients. And even Republicans, who have traditionally opposed health care paid for by the government, are warming to the idea. “You can look at it as socialized medicine,” Florida Rep. Ted Yoho, who has vocally opposed the Affordable Care Act, told HuffPost this week. “But in the face of an outbreak, a pandemic, what’s your options?”
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From: John Andrews
Wednesday, October 11, 2017 7:01 PM
Dear Long Island East CCLers (Citizens’ Climate Lobby),
Now that the head of the Environmental Protection Agency has gutted President Obama’s Clean Power Plan, it is a perfect opportunity to ask our representative in Congress, Lee Zeldin, to come out publicly in favor of the best alternative, namely carbon pricing.
I hope you will read the following, taken from an op-ed written by Mark Reynolds, Executive Director of the Citizens’ Climate Lobby, and then write Mr. Zeldin in your own words, asking him to speak out in favor of climate action.
He was an early joiner of the Climate Solutions Caucus in the U.S. House of Representatives, and he voted, along with 65 other Republicans and all the Democrats, against the nefarious Perry amendment that, had it passed, would have prevented the Defense Department from considering climate change in their planning. You might want to thank him for those actions and ask that he take the next important step now.
The easiest way to do this is to go to the Web site www.zeldin.house.gov/contact where you can compose a message and send it to him
Here is the selection from Mark Reynolds’ op-ed:
As Clean Power Plan is gutted, Congress must step in to price carbon
By Mark Reynolds
In its zeal to undo the legacy of our 44th president, the Trump administration is now undoing the future of our children and grandchildren by repealing the Clean Power Plan, a policy designed to reduce the heat-trapping emissions that make our climate more and more inhospitable.
How inhospitable? We’ve gotten a frightening glimpse of an altered climate recently with disasters fueled by warmer temperatures:
It’s clear our unstable climate is putting bigger and bigger burdens on our economy. It’s also clear that the current White House is determined to remove regulations on the use of dirty fuels contributing to that unstable climate.
Those who cheer the EPA’s move should remember that President Obama initiated the Clean Power Plan in 2015 in the face of Congress’s inaction on climate change. Without effective legislation to combat climate change, a future president could just as easily go down the path of executive action and regulations again. The best answer here is for Congress to pass legislation putting the market to work on solving climate change.
The policy that finds favor across the political spectrum is a steadily-rising fee on carbon with revenue returned to households. This approach uses the power of the market to hold fossil fuels accountable for the damage they inflict on our society. A straightforward carbon fee will drive investment and consumer behavior toward low-carbon energy and energy efficiency, thereby reducing greenhouse gas emissions. By returning revenue from the carbon fee equally to all households, we can shield individuals and families from the economic impact of rising energy costs associated with the fee.
A study from the well-respected Regional Economic Models, Inc., looked at a policy with a fee starting at $10 per ton of carbon dioxide that increases $10 per ton each year. In their models, all revenue was distributed evenly to every household. REMI found that after 20 years, CO2 emissions would be reduced 50 percent below 1990 levels. At the same time, 2.8 million jobs would be added because of the economic stimulus of returning revenue to consumers.
In other words, this policy is a win-win for both our environment and our economy.
]]>General Partner Abacus International Management L.L.C. ”For Development Solutions You Can Count On”
The rust belt is hurting. So is coal country and so are so many former manufacturing communities in the heartland of America. If there is a single underlying cause for the anti-establishment anger that led to the elevation of Donald Trump to the Presidency, it is the loss of well-paying jobs in parts of the country that were heavily dependent on mature manufacturing and extractive industries.
This is not a sudden development. Rather it is part of a trend over the past 30 years that has seen a gradual and inexorable decline in the real wages in the manufacturing sector as industries have matured. Over time, workers who lived a comfortable life have seen their wages erode. Workers have had to accept cuts in their wages and benefits or have seen their jobs migrate abroad to countries with lower wage structures. While in the past, manufacturing workers earned a wage significantly higher than the U.S. average, by 2013 the average factory worker made 7.7 percent below the median wage for all occupations. By end-2104, more than 600,000 manufacturing workers made just $9.60 per hour or less. More than 1.5 million manufacturing workers—one out of every four— made $11.91 or less[1]. Many workers have to hold two or more jobs in order to make ends meet.
Despite this, manufacturing plants have had to move to emerging economies, many of which have average wages that are still considerably lower than those in the U.S. Unable to expand their markets sufficiently rapidly, bottom line profits have been boosted by rapid rises in productivity either through the introduction of new technologies on assembly lines or a reduction of labor costs. The reduction in labor costs has typically been achieved through massive layoffs or a reduction in wages and in some instances, both. It is fairly clear that this is a secular trend for the nation as a whole with a wholesale loss of jobs in traditional manufacturing; clothing, heavy machinery, furniture, automotive products and other industries that require only moderately skilled workers.
By contrast, Germany, Sweden, Denmark and a few other developed economies in Europe have fared quite differently. In 2013 average hourly pay in manufacturing in Germany stood at $48.98, one third higher than in the $36.34 in the United States. Yet, the German manufacturing sector remained relatively stable between 1997 and 2013 in the face of competition from China, while the US lost 5.4 million manufacturing jobs during the same period[2].
Why is this? This is largely because governments in these countries have understood that in order to maintain high wages and to continue to grow, they would have to migrate towards a high tech, knowledge, and service based economy. Manufacturing in the high tech space requires fiscal incentives to grow the sector, a higher level of skill, access to capital and new and extensive investment in essential infrastructure.
President Obama understood the challenge very well. Although he was blocked at every turn by a hostile Congress, he understood that macro policies would need to address the structural challenge. He was committed to moving the country towards green technologies that were good for the environment, but equally importantly would place the US in the driver seat in the expansion of new and innovative areas that will underpin industry and the economy of the future. He encouraged high tech entrepreneurs to participate in the transformation. Furthermore, he was committed to investing government resources into the infrastructure required to support the rapid growth of clean energy and green technologies. Finally, he was committed to improving public secondary education and access to tertiary education by making it less expensive and providing new and less expensive ways for students to finance their studies.
Hillary Clinton too, to her credit, had a fully fleshed out raft of macro policies[3] ranging from investments in infrastructure, encouraging clean energy (making the US a “clean energy superpower”), improving trade policies, investing in computer sciences and STEM education, creating a “lifelong learning system that is better tailored to 21st century jobs”, increasing access to capital for small businesses and start-ups focusing on young entrepreneurs and the deferment of student loan payments[4].
Although he has come to office promising to “Put America to Work Again” as a convenient corollary to “Make America Great Again”, it is very difficult to understand what Donald Trump’s policies for creating jobs and expanding the US economy are. So far he seems to have focused on doing individual, company-specific deals on a micro-level to save jobs on a case-by-case basis. Such deals save relatively few jobs at relatively high cost in the short-term, but will fail to stem the loss of well-paying jobs in the long run unless complemented by sound macro policies.
Much has been made of the Carrier deal. United Technologies, through its Carrier subsidiary manufactures air conditioners in this country. President Trump initially claimed that he had reached a deal to save some 1,100 jobs at the Carrier plant in Indiana, preventing them from being moved across the border to Mexico. This was only just over half of the total of 2,100 jobs that were supposedly under threat at the plant. The actual number saved, however, was even smaller because 300 of the jobs were white-collar positions and were never slated for relocation[5]. The total number of jobs saved was, in practice, therefore, just 800, or about 44 percent of the total 1,800 that would otherwise have been lost. How did he manage to save these jobs? With the help of his Vice-President, Mike Pence, Governor of Indiana at the time, $7 million in State tax breaks were scheduled to be paid to Carrier over 10 years, or $700,000 per year. That is $875 per worker per year for each of the 800 jobs saved[6]. No doubt once the tax breaks wear off, all things being equal, the jobs would once again more likely than not, be transferred abroad. Subsidies are expensive, distort markets and work only in the short run. In fact, Carrier’s parent company, United Technologies, has since 1993, received 819 state and federal subsidies worth a total of $881 million, or about $38.1 million a year for 23 years. That doesn’t count 10 major loans worth $46 million over the same time[7]. That is just one company.
Although his policies have never been spelled out, President Trump has claimed that he will negotiate more favorable trade regimes for the US with individual countries. Where he sees inequities, he will slap on tariffs barriers to render goods manufactured overseas more expensive and less competitive.
None of the above are policies. They are ad hoc tactics, geared to paying to media, and are intended to gain brownie points in the political arena. While he may develop a more sensible raft of policies in the long run, as presently stated, Trump’s approach if perpetuated will keep the American economy mired in mature, slowly growing industries, raise the level of state and federal debt and make retail products more expensive domestically, creating even greater financial hardships for the average American in the long run.
[1] Ruckelshaus Catherine and Sarah Leberstein, Manufacturing Low Pay: Declining Wages in the Jobs That Built America’s Middle Class, National Employment Law Project, November 2014.
[2] See Economic Policy Institute at http://www.epi.org/publication/high-wages-arent-to-blame-for-the-decline-of-u-s-manufacturing/
[3] https://www.hillaryclinton.com/issues/jobs/
[4] https://www.hillaryclinton.com/issues/technology-and-innovation/
[5] ABC News, Julia Jacob, 300 Carrier Jobs Trump Touts for Indiana Were Never Moving to Mexico, December 2, 2016.
[6] Forbes, Eric Sherman, Trump’s Carrier Deal Means Nothing for Future Jobs, December 4, 2016. (http://www.forbes.com/sites/eriksherman/2016/12/04/trumps-carrier-deal-means-nothing-for-future-jobs/#36f10f034c7b)
[7] http://subsidytracker.goodjobsfirst.org/prog.php?parent=united-technologies
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