Mapping What Every State In America Is Best At

Company towns used to be a defining feature of the American economy. Nowadays, as Raul at HowMuch.net notes, thanks to globalization and offshoring, it is much harder to find employers that exert such influence over a small town (with a few notable exceptions).

That being said, specific industries still tend to grow in clusters and can dominate the economy of a particular region. To understand this new reality, we mapped the most important industries by state according to the U.S. Bureau of Economic Analysis, which takes into account an industry’s collective output as a percentage of the overall GDP. For simplicity, we excluded government jobs and real estate.

The result is one of the easiest snapshots of the U.S. economy you will ever find.

Source: HowMuch.net

The government groups companies into particular industries using the North American Industry Classification System (NAICS). Basically, someone looks at a company and decides where it belongs on a list of industries. This is more complex than it sounds, especially if a parent company holds many different unrelated subsidiaries (like Amazon), or when a business model strides the line between different industries (anyone care to debate if Airbnb is a technology company or in the hospitality industry?). We simply generated a color-coded map of the results of this debate.

You can immediately see some interesting groupings in the map.

 Computer & electronics companies dominate the West Coast, oil & gas remains ascendant in the Southwest, and insurance companies take the greatest market share in the Upper Midwest.

Take a look at the deep South, where you see a lot of red signifying the ambulatory healthcare services industry. This single industry dominates in 13 different states. Think about the Fortune 500 companies headquartered in these places, and it’s pretty easy to understand why these industries are so important. For example, Apple, Facebook, and Google are all headquartered in Silicon Valley in California.

Things tend to be much more diverse across the Northeast, where you see many different industries all grouped together. This is also easy to explain: it’s one of the most population-dense places in the country and it has the smallest states in terms of geography. This environment lets a lot of different industries grow together.

Factory towns may be a thing of the past, but it remains true today that similar businesses tend to grow and expand in areas with the same economic conditions.

This is true for less populous states like North Dakota and places with big cities too, like Colorado. If you’re looking for a job in one of these states, then our list gives you a good idea of where the biggest opportunities might be.

 

Boeing To Lay Off "Hundreds" Of Engineers

President Trump will not be amused. In a letter to employees, Boeing VP John Hamilton announces that the company will lay off "hundreds" of engineers as soon as this week, affecting Washington and "other enterprise locations."

As Bloomberg headlines show:

• *BOEING TO SEND NOTICES FOR INVOLUNTARY LAYOFFS APRIL 21


• *BOEING ENGINEERING LAYOFFS PLANNED FOR JUNE 23, 2017

The timing is interesting as the Ex-Im Bank discussions hot up and comes just 2 months after Trump visited Boeing"s South Carolina plant.

Standing in front of a new Boeing 787-10 Dreamliner passenger aircraft made at in North Charleston, Trump repeated his campaign promises to promote American production that partly fueled his dizzying path to the White House. He warned of a "substantial penalty" for companies that move jobs out of the United States.

"We want products made by our workers in our factories stamped with those four magnificent words — made in the USA," Trump said.

The share price is entirely unimpressed...

Don't Threaten Business With A "Border Tax" — Instead, Make America A Great Place To Do Business Again

Submitted by John Sulzer via The Mises Institute,

“They’re going to have to pay a border tax — a substantial border tax,” President Trump pledged Monday morning during a White House meeting with twelve CEOs including the heads of Dow Chemical, Proctor and Gamble, and Ford. He went on to make thinly veiled threats against the businessmen, saying, “All you have to do is stay. Don’t leave. Don’t fire your people in the United States.”

The President also discussed a 75 percent regulation cut and tax cuts for both the middle class and for corporations and a “big border tax.”

This is troubling for several salient reasons, primarily because the public image of President Trump holding White House meetings with businessmen just doesn’t wash. This meeting, at least, was open to the media. However, previous meetings with high-level executives have not been. What was discussed during these back-room meetings? We don’t know. Did the president offer incentives or threats? We don’t know.

What we do know is that the president working directly with CEOs produces at least the perception of secret deal-making. 

Additionally, the narrative that all outsourcing is bad is patently incorrect. Outsourcing factors of production can allow businesses to free up money and hire more workers in the US at higher wages. Another benefit is that those foreign firms who are paid by US companies have to spend the dollars they receive back in the US or trade them in so someone else can. This results in more investment and capital at home.

Also, dumbing down the causes of the decline in manufacturing jobs, as Trump is doing, doesn’t help anyone. New technology facilitated the decline arguably more than outsourcing as US manufacturing output has risen in recent years while jobs have declined. The decline isn’t because of “crooked” or “cucked” trade deals like NAFTA. These deals don’t force firms to outsource or to automate. What forces firms to do so is overbearing tax rates and regulation.

By announcing tax cuts for corporations and a 75 percent regulation cut in the same meeting, the president has signaled he intends to implement pro-growth business policies. The “big border tax” and “renegotiation” of NAFTA won’t help. The tax cuts and deregulation, on the other hand, would.

Finally, President Trump’s reference to “fair trade” was naive and deceptive: “So I don’t call that free trade, what we want is fair trade, fair trade, and we’re going to treat other countries fairly but they have to treat us fairly,” he claimed. This seemingly was his second-worst stray into the Bernie Sanders level of economic illiteracy, after calling the free market, “the dumb market.”

In recent decades, “fair trade” has usually denoted the practice of those in wealthy countries paying inflated prices for goods in order to supposedly pay higher wages to those workers in less-developed countries who produce said product. In reality, this results in unemployment for many of the workers and those who keep their job aren’t paid all that much more. The bureaucracy involved in the deal is the primary beneficiary. It turns out folks could do a lot more good for less by buying the cheaper alternative to fair-trade boondoggles and donating the difference to charity.

The same goes for President Trump’s border tax plan. Just like proposals such as the minimum wage, this sounds altruistic, but it helps no one. The best way to bring jobs back is to make America the friendliest place in the world for innovators and job creators, not punish them for looking elsewhere for an alternative to business-killing taxation and regulation of the Obama years.

Norway’s Fish For Brains Trade With India (Part I: Background)

Submitted by Nick Camran of Letters from Norway

This is a personal story, discussing skilled immigration experiences and implications in both Norway and in the USA. I am a native born American of Indian origin having worked in both the US and Norwegian IT sectors. To translate the Norwegian references, you can right click in the Google Chrome browser and select “Translate to English” or use Google Translate.

Desperate to sell more fish, Norway is looking to India, allowing their IT companies increased access to the local market, in exchange for tariff reductions, which are currently high for European imports. On the surface, it appears to be a win-win deal but digging a little deeper, there are some serious long-term implications. (it still remains unclear whether or not this deal went through).

Monica Mæland: Norwegian Minister of Trade & Industry

Specifically, they want the following:

The ability to transmit and host Norwegian more personal information in India. Special areas within the company are sealed and secured, meeting Norwegian regulations. Indian IT workers can work in those zones same as a Norwegian in Trondheim or Oslo: otherwise known as a “Little Norway” zone. Since the connection is ubiquitous wit the onshore entity, they can access data containing credit card and social security numbers.

Although Mæland hopes that the Indians can make concessions on this point, they and the fishing industry are pushing hard. Geir Ove Ystmark, managing director of Seafood Norway, states that the industry is impatient.

Exemption from Norwegian Labor Laws: Tata Consulting Services (TCS), responding to an inquiry from the Labor Inspector, stated that Norwegian laws should not apply to Indian IT workers, residing onshore for short-term business trips. (If that sounds familiar, there is already a precedent from the US almost ten years ago.) Tata further argues that the workers are really employed in India, visiting Norway for a maximum of four to five months.

After the Vipps scandal at DnB (The Norwegian Bank) last year, involving the development of a now popular payment app, the labor directorate decisively denied the request. Against the hallmark Norwegian labor laws, the workers were putting in almost 16 hours per day to complete the project. I personally heard rumors, talking to TCS guys on the metro in Oslo, that they were not allowed to leave the office without their manager’s permission, even for a bathroom break or a movie over te weekend.

NRK (Translated from Norwegian)

Despite the reprimand, given to Tata, ordering them to correct the situation, Lise Raneberg of the Tekna engineering union, believes that they will exploit loopholes to circumvent the law. Nevertheless, Rina Sunder, from Innovation Forum Norway, believes, “Norway should meet India’s demand for easier access for IT workers.”

Premise:

The initial justification behind outsourcing and offshoring is that there is a skilled labor shortage in software and systems engineering. Generally technical, medical and engineering sectors experience shortages, requiring companies to hire offshore workers or companies, on contract, to fill the void. However, companies quickly realized that they could also save money, paying foreign workers much less than their domestic counterparts.

Mechanisms:

There are two models:

• Outsourcing: sending work to another company, working under contract, to deliver a service. This can be both done within the domestic market like having a local consultant teach a course or do a short term project.


• Offshoring: sending the work abroad either within your own company or outsourcing it to another company.

Offshoring and outsourcing even became a business goal with many companies, in and out of the sector. Target “offshore/onshore” ratios, vary from 40%-60%. In both cases, on location business trips or extended assignments may be required to complete work, allowing them systems access that they could not reach offsite. Often it becomes difficult to distinguish between an extended assignment, covered under local labor laws, and business trips, which are often extended or repeated in close succession. (Business trip visas can repeatedly be extended, or the laborer returns home every couple of months for a week or two before returning on a new visa.) They can even rotate people on and offshore, ducking the laws.

(Next – Part II: The Workers Perspective)

Job Openings, Hires, Quits And Layoffs All Rebounded In November

While too backward looking to be actionable (it reflects the labor situation with a 2 month delay), today"s JOLTs report showed little in terms of changes for "Janet Yellen"s favorite labor market indicator": the number of job openings was little changed at 5.522 million, below the 5.555 million expectation, but above a downward revised 5.451 million (from 5.534 million). 

Hires and separations were also little changed at 5.219 million (up from 5.160 million), and 5.028 million (up from 4.966 million), respectively. Within separations, the quits rate was unchanged at 2.1 percent and the layoffs and discharges rate was unchanged at 1.1%. That said, the pace of hiring appears to have tapered off, after hitting cycle highs in February 2016 at 5.5 million, and remaining at levels largely unchanged over the past 2 years.

As shown in the next chart, while the trailing pace of job additions has been modestly declining in the past two years, net hiring also appears to have plateaued.

Meanwhile, discharges and other layoffs jumped by 68,000 in November rising to 1.637 million after hitting cycle lows of 1.513 million in September.

The offsetting good news, however, is that being "quits", or the so-called take this job and shove it indicator, also rose, increasing by 41,000 to 3.064 million, just shy of the all time high reported last December when a total of 3.088 million workers quits their jobs on their own terms.