Lead or be left behind
One of the most important things that affects our quality of life is our ability to find a good job.
Everyone knows that it has been difficult for the middle class to raise their standard of living over the last 20 years. Many of the area's traditionally higher-paying jobs in manufacturing and mining have been eliminated, real estate values have tumbled and these things have all contributed to this dilemma. The unemployment rate has been high and many people have either retired early or just given up looking for a job.
Too many of today's jobs have been in the lower-paying service areas instead of manufacturing. Today, we have the best opportunity to change these facts in our favor if Washington and Harrisburg get out of the way.
We have tremendous opportunities because of the Marcellus shale gas that is located in our area. Not only is this creating jobs in the gas fields, but many others in housing and food services. The addition of these jobs combined with the increased spending of royalty income creates additional jobs in retail, leisure and other areas of the economy.
It takes additional employees to make these consumable goods and supplies. There has been a lot of information in the news about a possible new processing plant in the Beaver area of Pittsburgh. This could produce thousands of construction jobs and then maybe 10,000 permanent employee positions.
Often, transportation, packaging and other support companies locate near major factories.
Our local energy sources could spur many more manufacturing jobs for our area. U.S. companies now pay about 40 percent less for natural gas than companies in other countries. The natural gas can also be used to generate electricity on a cost effective advantage.
Many companies have turned to China for cost savings over the last 15 years. Their electric costs have increased by 66 percent since 2004, while natural gas has doubled there. This starts to tip the scales in our favor.
China has had a huge cost advantage on us in labor expenses. In 2001, the average wage was 58 cents per hour. Next year, it is projected to hit $6.15.
Because the U.S. productivity rate is three times as high as China, we can be very competitive on wages. Finished products destined for the U.S. market will have lower shipping costs and there is no fear from currency exchange rates. Nationalization and government interference is also much less of a concern.
What do our government units need to do to encourage this industrial expansion, not create unnecessary road blocks?
Our tax code needs to be simplified and changed to encourage investments in America.
U.S. companies have trillions of dollars overseas earnings sitting out of the country. This money was not generated in the U.S. and the companies are following the law. The U.S. tax rates to bring this money home are the highest in the world. The government will not collect on this money unless there is tax reform. With fair rates and proper incentives, this money could construct major factories in the U.S.
For America to become the major manufacturer that we were years ago, we need to reduce regulations.
We all want our drinking water to be safe and to breathe clean air, but regulations can go too far.
We also have to quit penalizing people for taking risks by redistributing their wealth.
We need infrastructure in roads, bridges and river routes to be updated. We need to have an education system that produces skilled and motivated workers. The way we maintain and improve our quality of life is to be more productive than the rest of the world.
Workers in this area in the mines and mills traditionally had a strong work ethic. Today's workers could learn from these past residents.
We have to make the Mid-Mon Valley area one where companies want to locate.
We are at the crossroads of the nation. Large parts of the U.S. population are within a two-day drive of our area. We need to be a hub of the gas industry and take advantage of research done at area universities.
We need to be pioneers in fields such as 3-D printing that will be one of the next major changes in manufacturing. This could lead to people living much longer where it won't be unusual for people to be 100 or even 110 and much healthier.
The world will not stand still.
We can join, lead or be left behind.
We need our government leaders to stop kicking the can down the road and make changes for our children and grandchildren. We cannot leave a legacy of debt and entitlement. This country has been a limping leader that needs to regain its place at the front of the line.
It can happen and all of our financial lives will benefit.
Gary Boatman is a certified financial planner and a local businessman who serves as president of the Monessen Chamber of Commerce.