By Jack Encarnacao | The Patriot Ledger | March 2, 2013
Demolition of Quincy Center’s timeworn buildings is set to begin next month, the first step in the first piece of the long-awaited $1.6 billion downtown redevelopment project. When it starts, eyes far from Quincy will be watching.
The project, which will see the creation of 3.5 million square feet of business, retail and residential space in Quincy Center during the next seven years, has been picked up on the radar of experts in development and urban planning circles – experts who until recently did not know Quincy from Milwaukee.
In presentations across the country, the Washington, D.C.-based Urban Land Institute is citing the Quincy project as one to watch. Northeastern University is planning a course for the fall semester called “The Quincy Model,” in which the public-private partnership behind the project will be used as a teaching tool. The New York Times and trade journals have published articles about the project.
So far, the project has attracted nearly $200 million in investment from outside Massachusetts, and the venerable Boston firm The Beal Companies has signed on as a venture partner.
“It has the potential, really, to begin to redefine the conversation nationally,” Thomas Murphy, a senior resident fellow at the Urban Land Institute, said about the project. “This sort of puts Quincy on the map. It catches the eye of other people. People like creative deals like this.”
If the sprawling development unfurls as envisioned, the model behind it could become a new paradigm for how cities and developers can work together and divvy up risk in a post-recession world to revitalize staid urban areas, experts say.
“It really will be one of the earliest major city projects to come out of the recession and into the recovery,” said Gregory Bialecki, Massachusetts’ secretary of housing and economic development.
The state is putting tens of millions of dollars in grants and financing into the development and related projects, like the ongoing relocation of Town Brook.
The project’s master agreement calls for master developer Beal/Street-Works to make $289 million of improvements to city assets like sidewalks, utilities and parking. Quincy will buy those improvements back, but only once Beal/Street-Works’ new buildings are producing more than enough tax revenue to cover the borrowing costs.
Such commitments are rare and not easy to wrangle, experts say, and they tell the marketplace that the project will not be slowed by politics or bureaucracy.
“It is very hard for public officials and the private sector to come to terms in a creative process,” said Alan Trager, chairman of the public-private partnerships study group at the Ash Center for Democratic Governance and Innovation at Harvard’s Kennedy School. “The fluidity required for creativity is sometimes not possible at all legal and regulatory levels of government.”
Bialecki, the state’s economic development chief, said the city’s $289 million bond commitment, made during an economic recession, makes the project jump off the page among a slew of half-baked urban redevelopment plans.
“There’s no question in my mind the reason it was able to start so quickly, and catch the wave of an economic recovery so quickly, was because of the public commitment in infrastructure made during the downturn,” he said.
The commitment is an acceptable risk, for the city, Mayor Thomas Koch said. The city’s bond counsel approved the plan because the revenue to cover the debt needs to be demonstrably flowing before the city is on the hook.
“It never touches the general fund; that was number one on our end,” Koch said. “We want to control our own destiny. We put together a plan that says, ‘Look, the city’s putting it on the line.’ ”
Street-Works, an urban development company, came to Quincy in 2005 to help client Stop & Shop assess whether it should keep its headquarters in Quincy Center. Soon afterward, it pitched a large redevelopment for downtown, and it made a statement with its $8 million purchase of the Granite Trust building, where its Quincy offices are now located.
The downtown project will also be tracked as a test case of how to build on the post-recession trend of Americans, priced out of the housing market due to tighter lending standards, seeking rental housing with services within walking distance.
A 2011 Urban Land Institute report, which cites the Quincy Center project, estimates that 6 million new renter households will be formed in the U.S. from 2008 to 2015. This, the institute reports, will require 300,000 new rental units to be built each year, compared with 100,000 in 2010.
Experts say the trend toward rentals is particularly pronounced among baby boomers and “millenials” – those from 18 to 32. The Quincy Center project targets that demographic with plans for loft apartments.
“You can see that they’ve got a vision here based on very good research, very good accounting, and a very good understanding of coming demographics,” said Barry Bluestone, director of the Dukakis Center for Urban and Regional Policy at Northeastern University. “There are a few places, if this is carefully done, where this could, in fact, be quite feasible, financially feasible. It’s exciting to see it happening.”
Four views on whether there have been enough reforms to justify Patrick’s proposed tax increase
Globe Correspondents | The Boston Globe | February 17, 2013
Yes: Pair revenue, reform
Since 1998, the Commonwealth has reduced personal and corporate income tax rates, costing the state $2.5 billion a year — leaving little to pay current bills or deal with $80 billion in past unfunded liabilities, let alone make critical education and transportation investments for our future. Yet with the public demanding reform before revenue, the governor and Legislature have been hesitant to increase taxes.
Reform is precisely what the Commonwealth has been doing. Major changes to the public employee health-insurance system and public pensions will save billions of dollars over the next 30 years. Accountability in our K-12 schools will enhance classroom quality. The Turnpike Authority was merged into the Massachusetts Department of Transportation, and the “Fast 14” project has sped up bridge repairs.
Thousands of other efficiencies, big and small, have been implemented, from replacing police officers with civilian flaggers to moving 3 million Registry of Motor Vehicle transactions online. Operating under a new strict statewide performance management system, every executive office has been cutting costs. With this focus on efficiency, state government employment has grown by just 0.3 percent over the past two years, while total non-farm employment has grown by 1.9 percent. State government is shrinking as a share of the state’s economy.
Governor Patrick has put forward a tax package to pay for critical state needs. It can be tweaked to even better meet the criteria of sufficiency, stability, equity, predictability, and transparency. It will not undermine our competitiveness in the short-run. It will be strongly pro-growth over the long-term. Now is the time to pair revenue with reform to ensure a prosperous future for the Commonwealth. — Barry Bluestone
Barry Bluestone is the director of the Kitty and Michael Dukakis Center for Urban and Regional Policy at Northeastern University.
No: This isn’t real reform
To date, Governor Patrick’s most significant reform is allowing municipal employees to purchase state health insurance. It’s a big deal, annually saving municipalities over $100 million.
Unfortunately, the governor’s 2014 budget abandons all pretense of authentic reform. Here’s why his argument that reforms during his tenure warrant massive new tax increases fails:
The governor’s reform record is mixed. Passed with promises of $6.5 billion in savings, the 2009 transportation reform law has yielded a tiny fraction of that. Even with a sales tax boost (over $600 million annually) to support transportation reform, we still pay hundreds of employees with borrowed money.
By requiring project labor agreements and so-called “prevailing wages,” even for civilian flaggers, the governor continues to inflate transportation construction costs.
What about public pension reform? The governor’s 2011 pension reforms promised $5 billion in savings over 30 years. Some elements were desirable, including lifting the retirement age for most state workers. But the “reform” also refinanced our pension debt, paying it off by 2040 instead of 2025, costing taxpayers tens of billions of dollars.
Worse, it forces the state to postpone paying down another huge unfunded liability — our $15.6 billion liability for retired state employees’ health care coverage.
The new spending blueprint is unwise. We cannot build new rail lines with low ridership even as the MBTA confronts an $8.9 billion debt and a $3 billion maintenance backlog. And can we take seriously a $1 billion a year transportation spending plan that doesn’t fund operations, maintenance, and debt service for planned expansions?
A year ago, the governor announced that he had fixed the “structural deficit.” Today, we know that’s not true: 2014 state revenues are a billion dollars shy of programmed spending. That’s the hole any new revenues will fill. Forget the promised transit lines, bike lanes, and education funding.
The well is dry. Between 2005 and 2011, state spending has grown at almost twice the rate of personal income and more than three times faster than GDP. That is the best evidence that Patrick’s record doesn’t justify massive new tax increases. — Jim Stergios
Jim Stergios is executive director of The Pioneer Institute.
Yes: Help people thrive
SEVERE ECONOMIC downturns, such as the one we have experienced since 2008, force human services leaders to make extraordinarily tough choices. While the demand for services increases dramatically, budgets are slashed; inevitably the most needy people get hurt. In Massachusetts, health and human services programs have been cut by $2.5 billion, and 10 percent of the workers delivering care have lost their jobs. Agencies providing critical services to the poor, the elderly, abused and neglected children, and the physically and mentally disabled have been decimated. For example, the Department of Public Health budget is now 36 percent below pre-recession levels, which may in part explain recent management issues in that agency.
The Patrick administration reduced these services reluctantly; the money to fund them had disappeared. But the administration went further than simply reducing budgets. The governor understood that health-care costs were growing at an unacceptable clip, consuming dollars badly needed for infrastructure, education, and human services. He worked closely with the Legislature and the business community to produce Chapter 224, landmark legislation to save billions in health costs over the coming years, while maintaining the state’s commitment to universal health insurance. In social services, the administration’s policy of placing children and adults in community settings, if at all possible, rather than in expensive, outdated institutions, means better outcomes at lower cost.
The reality is that the Patrick administration has led major reforms within state and private human services agencies. Now the governor is challenging us with a crucial decision we must make about our state’s economic future. We must decide either to invest once again in people who are fully capable of becoming independent, self-sufficient, tax-paying members of society or to continue the dismantling of the services designed to help them to thrive in our state.
As we debate Patrick’s revenue proposals, the stakes will be very high for those who rely on human services, often for their very survival. But the stakes are high also for the rest of us, because we all benefit when a family escapes poverty or when a disabled person finds a job. The governor’s plan will permit Massachusetts to move forward with safe roads and bridges, public schools that make us proud — and it will maintain our state’s historic role in providing a helping hand to those who deserve and need it. — Philip W. Johnston
Philip W. Johnston is the former Massachusetts secretary of human services and New England administrator of the US Department of Health and Human Services. He is CEO of Johnston Associates.
No: Get fiscal house in order first
GOVERNOR PATRICK’S budget proposal perfectly illustrates one of the perils of big government; there is no incentive to rein in wasteful spending when you are using other people’s money. You can always demand more from taxpayers in the name of “shared sacrifice” or “fairness.”
There is nothing fair about the sacrifices being imposed on the working class families of Massachusetts. In addition to raising the income tax and myriad other taxes, fares, and fees, struggling families are in danger of losing 45 tax deductions they have counted on and budgeted for.
Families will sacrifice with the elimination of tax credits for their dependents, child care, foster care, and adoptions. Students will suffer when they lose tax credits for tuition, commuter fees, scholarships, and employer-provided education assistance.
We all lose with the elimination of tax credits that incentivize certain behavior, such as lead-paint removal, septic system repair, clean-fuel vehicles, renewable energy, and charitable contributions — all eliminated under this plan.
Health savings accounts allow people to save (tax free) for future health care needs. The governor wants these tax savings eliminated.
Missing in this plan is any meaningful talk of spending cuts or reforms. Apparently, we have learned nothing from the Big Dig, because under the governor’s plan, the Massachusetts Department of Transportation will be rewarded for bad fiscal behavior. The Department of Transitional Assistance lost track of 47,000 families receiving taxpayer-funded benefits and gave nearly $30 million in food stamp money to ineligible recipients. Where are the reforms? And it is safe to say the state health department warrants some reform after the state drug lab scandal.
Governor Patrick, the people of Massachusetts are taxed enough already. It’s time to get you own fiscal house in order. — Christine Morabito
Christine Morabito is president of the Greater Boston Tea Party.
By Barry Bluestone | Boston.com | February 14, 2013
In his State of the Union address, President Obama asked us to consider how to rebuild America’s middle class. He talked about the need to bring manufacturing back to our shores, provide greater fairness in foreign trade, educate our workforce to compete in global markets, and train a new generation of skilled workers.
All of these are indeed critical elements in providing American workers and their families with the types of jobs that made many of our parents “solidly middle class.” But history tells us that there was one other element in America’s transformation from a working class society to a middle class society, and it has to do with a statistic reported by the U.S. Bureau of Labor Statistics at the end of January.
According to the Bureau, the percentage of American workers who belonged to trade unions fell to 11.3 percent last year, the lowest level since the 1930s and perhaps as far back as 1918. Last year, of course, was when we saw unions being blasted across the country from Wisconsin to Illinois, and New Jersey.
In some cases, unions have not done themselves or their members proud by ignoring changes in the global economy or the patience that taxpayers have with the pace of public reform. But let us not forget how unions played a critical role in the very creation of the middle class.
Let’s begin with a simple definition of two social classes. We can define a “working class” household as one that has little income and even less economic security. In contrast, a “middle class” household has more income, but even more importantly, a modicum of economic security. In the 1930s, the Roosevelt Administration began the job of transforming America into a middle class society where a majority of Americans enjoyed higher wages and greater economic security. Unemployment insurance helped workers from falling out of the middle class the moment they lost a job. Social Security helped older workers from losing their middle class status once they retired.
Yet it was the passage of the National Labor Relations Act (NLRA) in 1935 that expanded the middle class the most by providing a set of rules that eased the ability of workers to join unions and work collectively to improve their lot. From just nine percent of the workforce in 1936, the proportion of America’s workers who were union members soared to more than 35 percent by the mid-1950s. What is more, given the spread of trade unionism, many non-union employers offered wages and benefits that were close to comparable with organized workplaces – in an attempt to discourage their workers from joining a union. Perhaps two-thirds of workers were thereby helped by the organizing drives of the 1930s, 1940s and 1950s even if half of them never paid a dollar in dues.
The big breakthrough in building America’s middle class came right after World War II when new union contracts were forged in the nation’s major industries. These new contracts had six provisions that would make it possible for workers of modest skill to join the ranks of the middle class along with those who had the benefit of a higher education. The first provision provided blue collar America a middle class wage:
AIF/COLA Clause – The annual improvement factor and cost of living escalator gave workers a wage increase each year consistent with productivity growth and protected their wages from the erosion of inflation.
The next five provided workers with a modicum of job and income security:
Fringe Benefits – Health insurance, life insurance, pensions
Seniority – Layoffs, recalls, and transfers based on years of work on the job
Grievance Procedure – A formal process for adjudicating workers’ rights at work
Work Rules – A formal set of guidelines that protected workers on the job
Union Shop Provision – A guarantee that workers would have union representation
The modern collective bargaining agreement that grew out of these principals and provisions transformed American workplaces into middle class establishments.
Times change and the spread of unionism began to wane. Imports and the introduction of new technologies reduced the need for less-skilled workers and the ranks of organized labor dwindled.
Whether a new form of unionism can replace the old, consistent with the exigencies of a global economy and whether additional worker protections like universal health care insurance can recreate the basis for rebuilding America’s middle class is an open question.
But without making it possible for the majority of American households to once again enjoy the benefits of rising incomes and greater job security, it is hard to see how we can rebuild America’s middle class.
By Louis Uchitelle | The Nation | February 5, 2013
Two-tier wage systems go way back. The Roman Emperor Marcus Opellius Macrinus, in need of a larger army but short on cash, cut the pay for new recruits, forcing them to endure the same battlefield risks as veterans, but at a lower wage. That annoyed the new warriors, and their resentment ignited an army revolt that in 218 ad cost the emperor his life.
Centuries later, two-tier wage arrangements are multiplying in America, yet without provoking the kind of public resentment that led to Macrinus’ downfall, mainly because those involved seem to have struck a deal that keeps a lid on passions. In response to persistent demands from employers for lower labor costs, some of the nation’s most prominent unions—instead of protesting or striking—have agreed to reduce the pay of newly hired workers as long as the wages of existing employees go untouched. And the new hires themselves have abstained from open protest, instead preferring the lower tier to no work at all, or to work that pays even less than a union-negotiated lower tier.
That’s Karl Hoeltge’s attitude. The 22-year-old earns $15.78 an hour on the assembly line of a General Motors factory near St. Louis, under a union contract that will cap his pay at $19.28 an hour five to six years from now. That is, if he hasn’t left by then to pursue his dream, which is to commercialize one or two of the children’s toys he designs in his off hours. Karl’s father, Gary, has worked for years on the same assembly line, and the son says he might be more reconciled to a career at the plant if he could work up to the $28 an hour his father earns. But, he says, “I’ll never catch up to my father’s pay—not if the union allows the present setup to continue.”
At the Hoeltge family dinner table, the two refrain from discussing this setback for the son—and for others at the plant in his generation—not wanting to upset the three younger siblings at the table. (At least one of them talks about following his father and his older brother into the factory, where eight-passenger vans like the Chevy Express and the GMC Savana are assembled.) They particularly avoid dwelling on the lifetime cap on Karl’s pay. Despite that ceiling, Karl might stay on at the plant if he has to. “I won’t leave GM until I have something better,” he says. “And I look all the time for something better.”
Finding something better isn’t easy in America—not when more than 20 million people are seeking employment, or hoping to move up from part-time to full-time work, from temporary to permanent jobs, or are too discouraged even to look for work, according to data from the Bureau of Labor Statistics. That labor market slackness, persisting for years, helps explain why corporate employers have gained considerable leverage over wages and benefits, even in negotiations with powerful unions like the United Auto Workers (UAW). One unspoken goal of that leverage is to roll back wages for a younger generation of hourly workers, while pacifying older ones (like Karl’s father) by leaving their pay and benefits untouched in the final decade or so of their careers.
And so it is that Karl is earning the same hourly pay—not adjusted for inflation—that his father earned when he started at the plant in 1968. And that is where Karl’s pay will remain if the two-tier system prevails and spreads. Some 20 percent of all union contracts currently specify two-tier arrangements, up from very few a generation ago, according to Glenn Perusek, director of the Center for Strategic Research at the AFL-CIO. More often than not, the tiers apply to pensions and health insurance as well as wages. Most of these concessionary agreements have been negotiated since the 1990s, with little public resistance from the labor movement (although suppressed anger at the forced retreat almost certainly contributed to the Occupy Wall Street movement). As Barry Bluestone, a labor economist at Northeastern University, sums up the situation: “There are so many pressures on labor today that the rebelliousness is gone, except maybe in the public sector.”
The retreat from the middle-class status that unions conferred on so many blue-collar workers is happening gradually. Two-tier schemes, which began to spread in the 1980s, are part of that retreat, undermining union solidarity by separating one generation from another. Older union members acquiesced partly to preserve their own pay and benefits and partly to avoid layoffs. The lower tier would be temporary, they rationalized, and in those early days almost every contract included a sunset provision that brought a flight attendant’s pay, for example, up to the standard wage rate after a certain period. Unions initially wouldn’t tolerate having some members consigned indefinitely to less pay for equal work, and corporate managers seemed to accept that resistance. The better-educated among the bosses may even have known what happened to Emperor Macrinus, and they did not want the “B-scalers” (as those in the lower tier are called) to “increase in political force as their numbers increase,” as Bluestone and a co-author, the late Bennett Harrison, explained in their 1988 book, The Great U-Turn: Corporate Restructuring and the Polarizing of America.
These days, however, the B-scalers’ numbers have risen manyfold, and their lower scales no longer merge very often with the ones above. Like the Roman legionnaires, they too could revolt—or, in their case, protest and strike to support union contracts that would meld the two tiers back into one. Instead, they too have acquiesced—as these agreements have rolled back wages by as much as $10 an hour for a younger generation in autos, steel, tires, farm equipment and aircraft production. Beyond manufacturing and airlines, there are two-tier union agreements among retail employees, nurses, supermarket clerks, and state and local government workers. A four-and-a-half-month strike involving grocery stores in southern California in 2003 and ‘04 ended in an agreement that included a two-tier system.
In a number of cases, the second tier applies not to the wages of recently hired workers, but to their pensions and health insurance, particularly the former. Fixed monthly pension payments, funded largely by employers, have given way to defined contribution plans, which are essentially interest earned on a retiree’s own savings, supplemented by employer contributions. Or the second tier consists of temporary workers brought in for months at a time to replace higher-paid union regulars who have left or retired. “Perma-temps,” as they are sometimes called, earn permanently less in wages and benefits than regular employees.
The two-tier system, in sum, has come a long way from its initial conception as temporary relief for companies facing hard times. In that early version, unions and managers agreed not only to sunset provisions, but also to limit the percentage of new hires who could be consigned to the lower wage rate. From that cautious start, the bottom tier evolved and spread, eventually becoming a permanent rollback in wages or benefits (or both), not just at endangered companies but at profitable ones as well. “If you just instruct unions not to negotiate such a contract, that is no longer a solution,” Thea Lee, the AFL-CIO’s deputy chief of staff, told me. “They are backed into a corner.”
The government avoids the subject of two-tier labor agreements in its data gathering. And the Bureau of National Affairs, a private organization (recently renamed Bloomberg BNA) with 1,900 labor contracts signed in 2010 and ‘11 in its database, does not single out every one with a two-tier arrangement. “I’m willing to bet,” says Robert Combs, BNA’s manager of custom research, “that there were many, many contracts ratified in those years that specify two-tiered wage structures.”
The tiers vary, although no one formally tracks the variations. But interviews with workers, union officials and managers, particularly in manufacturing, suggest that the lower tier in many contracts is $12 to $20 an hour, versus $20 to $33 an hour for the upper tier. New hires top out over several years at roughly the starting wage in the days when there was only one tier. And there’s another irony: among blue-collar workers, those in manufacturing have traditionally been at the high end of union wage scales, but a $12 starting wage begins to brush against the federal minimum wage (not the current $7.25 an hour, but the proposals before Congress to raise it to $9.80 over three years).
“What we are really asking Americans to do is to tough it out for a while,” says Lawrence Mishel, president of the labor-oriented Economic Policy Institute in Washington. And so far they are—but not just for a while. The Occupy Wall Street demonstrations last year seemed to suggest that people might openly resist, but that movement has faded.
In the Hoeltge household in Wentzville, just west of St. Louis and a few blocks from the GM plant, Karl is nearly a year into the job his father got him soon after he left community college, where he completed two semesters but did not graduate. Living at home, taking meals with his parents and four siblings, not dating, designing children’s toys, he has managed to save $21,000—a start, he says, but not nearly enough to go out on his own.
Until Karl makes it big as a children’s toy designer, the best alternative, he says, is to work at the factory, where he inspects and adjusts the passenger-side doors as the vans come down the assembly line. “Unfortunately, the best jobs you can get around here, other than at the GM plant, pay not much above the minimum wage,” Karl notes.
Growing up, he had planned to follow in the footsteps of his father, who has spent forty-four of his sixty-two years as an hourly worker at the Wentzville plant, currently assigned to the stamping line, shaping metal into doors, roofs and fenders. Gary Hoeltge’s $28 an hour, along with better benefits than Karl can look forward to, would have been enough for his son, even now. The second tier’s $19.28 ceiling is not. “I’m not a hateful person,” Karl said, “but I’m fairly disturbed by what is happening to me.”
Two-tier agreements are largely a below-the-radar phenomenon. Management and labor don’t call attention to them—from a public relations point of view, they’re a feather in the cap for neither—and I first ran across them almost by chance, during a reporting trip to Milwaukee in the fall of 2010. The city’s unemployment rate had peaked in January of that year at 9.6 percent, in the aftermath of the Great Recession, and had declined only gradually, to 7.3 percent, by December 2012. Elsewhere, the auto crisis had already brought a two-tier system to GM, Ford and Chrysler with the consent of the UAW, which had responded in 2007 to corporate pleas for relief from diminishing profits.
That concession drew a lot of national attention. By 2010, I found two-tier systems also in place—with much less fanfare—at three of Milwaukee’s premier companies, all of them solidly profitable: Harley-Davidson, the motorcycle manufacturer; the Kohler Company, famed for its gleaming bathroom fixtures; and Mercury Marine, which makes outboard motors and other marine engines. Of the three companies, only the 900 workers at Mercury Marine had balked, voting at first to reject a contract with a two-tier system. A few days later, the workers reversed themselves after the company announced that in light of the original vote, it would consolidate production at an existing factory in Stillwater, Oklahoma, and close the one near Milwaukee. In their panicked response, the workers approved a 30 percent pay cut for new hires as well as for veteran employees called back from layoff. And this at a company whose production workers were—and still are—members of the powerful International Association of Machinists.
If the Machinists and the UAW can’t push back against a two-tier wage system, who in organized labor can? Or as Howard Wial, director of the Center for Urban Economic Development at the University of Illinois, Chicago, puts it: “There is a real potential for a long-term downshift in wages across the country.”
By Dave Solomon | New Hampshire Union Leader | February 1, 2013
GOFFSTOWN – New Hampshire job growth has been essentially frozen for the past decade, and it’s up to the cities and towns in the state to do something about it.
That was the call to action from an expert on economic development, who warned a gathering of local business owners and municipal officials on Thursday that federal and state governments are overextended and will have little to offer in the way of economic stimulus in the years ahead.
Local leadership is critical to job growth, because “companies move to municipalities, not states,” said Barry Bluestone, founding director of the Dukakis Center for Urban and Regional Policy at Northeastern University in a presentation to a regional economic development group that embraces Manchester and 13 surrounding communities.
Bluestone was the keynote speaker at the annual meeting of Access Greater Manchester, created in 2012 as Metro Center-NH, under the leadership of the Greater Manchester Chamber of Commerce, Southern New Hampshire Planning Commission and the state Division of Economic Development.
Bluestone urged government and business leaders in the audience at St. Anselm College to take an objective look at how welcoming their communities are for development, and to awaken to the new realities of the New Hampshire economy. Job growth in the state has been anemic since the end of the 1990s, he said.
The state saw significant job growth in that decade, as the number of jobs in the state rose from 508,000 in 1990 to 627,000 in 2001, which is the same number of jobs now available 12 years later, in 2013. The number of jobs spiked close to 650,000 in 2008, before a loss of about 25,000 jobs in the Great Recession that have yet to be recovered.
“For all intents and purposes, employment has not increased in New Hampshire in a decade,” he said. “There is something that’s stalled out here. Over the next decade, you are going to be competing in a global and national market, so if you want to maintain the services and wonderful standard of living you enjoy here, you’ve got to do something.”
What does business want?
Bluestone and his associates surveyed 251 relocation specialists – the people who help companies decide where they should locate when they are starting a new business or trying to expand. He said the results of that survey show that many assumptions about what companies are looking for are simply off track, and that policymakers spend too much time on tangential issues while not paying enough attention to the things that do matter.
“When we asked about minimum wage laws, they laughed at us,” he said, suggesting they were irrelevant to the kind of companies communities need to attract. Access to rail was not an issue except for heavy manufacturing. When it comes to strong trade unions versus right-to-work, Bluestone said the issue is moot in a country where union membership is down to 11.6 percent of the work force. “No one cares,” he said.
Old perks of minimal value
Even tax incentives are of minimal value, he said, since most businesses don’t even ask for them until they’ve already decided on a particular location.
So which location factors are most important to businesses looking to move or expand? Practical things like on-site parking for employees, reasonable rental or lease rates, availability of an appropriately skilled labor force and the timeliness of approvals and appeals.
The last factor is the one that local officials can most effectively control, and which most needs their attention, he said. Being considered a development-friendly city or town will be essential to economic development in the future. That may mean rethinking zoning and land-use procedures and regulations, especially in communities still stuck in the 1980s, when controlling, not stimulating, growth was the goal.
Bluestone and his colleagues at Northeastern have developed a survey that community leaders can take to assess how development-friendly their community is, with the goal of making changes as needed. Nearly 100 communities have taken the survey, including Bow, Londonderry, Merrimack, Milford, Pelham, Rochester and Windham in New Hampshire.
He encouraged communities to create pre-approved sites for development, which the Access Manchester group plans to do through a “Ready, Set, Go” program unveiled before Bluestone’s presentation.
Communities participating in the Access Manchester initiative are Auburn, Bedford, Candia, Chester, Deerfield, Derry, Goffstown, Londonderry, Hooksett, Manchester, Raymond, New Boston, Weare and Windham.