Tag / federal government

by Frank Maduri

Minimum Wage Debate: A Six Month Review – Follow Up

The debate surrounding the minimum wage increase has been extraordinarily divisive among the American general public. I have covered this issue from a variety of aspects, particularly surrounding the referendum vote affirming a minimum wage increase in my home state of New Jersey in January.

 

Now, six months later, I will again follow up on this contentious subject and as I have done in the past, I will analyze the data available to measure the impact on the job market in those states which increased wages.

 

The Data: Six Months Later

 

The report from the Center for Economic & Policy Research is very promising. There were no job losses in most states which raised the minimum wage, and if you do not recall from my earlier coverage, 13 states raised that wage for the workers in their respective states.

 

In fact, all but 1 state of the 13 states saw job growth within the first 5 months of the passage of the minimum wage increase. The states that raised the minimum wage had better job growth than those that did not raise the minimum wage.

 

Furthermore, the top 10 states for job growth feature 4 states which raised the minimum wage: Florida, Washington, Oregon, and Colorado. This data is exciting for the proponents of the minimum wage increase and will help their cause to gain traction on the national level.

 

Conversely, the data in this report will be largely damaging to those factions which continue to oppose the increase in the minimum wage from being approved in other states or on the federal level.

 

However, the detractors will most probably point out that the economy needs to fill higher paying jobs at a much more prevalent rate in order to fully bounce back. This statement would be rather accurate given the current state of the economy.

 

The factions who strongly defend the minimum wage increase would argue that the economy and job growth usually always starts from the bottom and progresses up the salary chain. Therefore, the gains made in the minimum wage jobs, they would argue, are an indication of future job growth of higher paying positions. These factions would use the data from this report to illustrate a trend in overall job growth in the 13 states with raised minimum wages which have also seen stronger job growth across the salary spectrum.

 

The Garden State Blues

 

My home state, New Jersey, has the worst job growth of the states that raised the minimum wage and is the worst state overall for job performance with a decline in net hiring of .56%, according to the Center for Economic & Policy Research.

 

The national labor force participation rate is declining, and New Jersey has been impacted by that unfortunate pattern in the labor market as well. The labor force participation rate is the amount of people who live in a particular state who are within the legal working age and that are gainfully employed.

 

The labor force participation rate in New Jersey was 63% in January 2014, the lowest rate since June 1983, during that horrible recession. In New Jersey and across the nation the share of people in their prime earning years that are employed is declining.

 

New Jersey is suffering for multiple reasons, the taxes on businesses coupled with the high standard of living have caused companies to either leave the state or hire less people. The cutbacks in hiring are due to the fact that the labor force here needs higher wages in order to meet the cost of living. It creates a vicious cycle.

 

In another report I reviewed, a study of major metropolitan areas and their respective job growth versus population size, I found that both New York City and Philadelphia finished in the bottom for job growth given that measurement. New Jersey relies on both of those cities to employ large amounts of their residents, which is obvious when you look at the bedroom communities that have sprouted up in New Jersey near those two major cities in the past.

 

That metric, the labor force participation rate, has everyone, including the White House, concerned about the job market in the near term. A member of the White House staff confirmed that they have to do more to assist businesses to enable them to create more jobs that are higher paying to improve the participation rate.

 

Stigma

 

I poured through several reports and data, but the biggest issue with the labor force participation rate is the stigma involved in society over the perception of those who are long term unemployed.

 

The studies I reviewed displayed a growing misconception by hiring managers and large and small corporations that the members of the labor force who have been unemployed for a long period of time cannot adequately fulfill the duties of the respective job which is currently open.

 

Several labor market analysts and those within the federal government who analyze job market trends disagree with this assessment, and acknowledge that the American economy still has a huge issue with long term unemployed people who are in their prime earning years. That figure stands currently at 35%, so for all the news that the job market is improving, that statistic is particularly alarming and damaging to our economy.

 

The debate within these circles and within the federal and state governments will shift in the coming months into a new focus: how to reverse that mindset and reverse the downward trend in the stagnant hiring of the long term unemployed. Many options are being discussed including potentially incentivizing the process for companies that do hire those individuals who have been out of work for a prolonged period of time.

 

Outlook

 

This report on the minimum wage increase certainly casts some light on the Congressional Budget Office (CBO) report which I think was too quick to “jump the gun” on the effects of the minimum wage on job growth. That report, in summary, basically maintains that minimum wage increases would have little to no positive impact on the creation of jobs.

 

The outlook for the proponents of the cause to get the federal government to raise the minimum wage is, in my opinion, strengthened by the data in the report from the Center for Economic & Policy Research. The groups in favor of this measure have a petition launched on the White House website if you would like to lend your support to this cause.

 

The growth of jobs overall is obviously the much larger issue here, and it will be interesting to see how the government and the business community will address the labor force participation issue in the future. It is becoming increasingly clear that something has to be done to employ more people in the prime of their respective careers, the overall improvement of our economy depends upon it.

 

(Statistics, rankings, and some background information courtesy of the Congressional Budget Office, Office of Management & Budget, Center for Economic & Policy Research, The Fiscal Times, and Forbes.com )

 

 

 

 

 

 

 

by Frank Maduri

The E.P.P. and Green Products Marketing

The issue of environmental protection is one in which we all have a vested interest. The federal government and their respective agencies and entities are enormous purveyors of a huge range of products for use within their operation.

 

The Environmentally Preferable Purchasing (E.P.P.) program was started by the federal government under the umbrella of the Environmental Protection Agency (E.P.A.) to oversee the purchase of “green” products. The E.P.P. program was designed to improve the compliance of the federal government agencies with regard to the purchase of environmentally friendly products.

 

The E.P.P. program was started in 1993 with the following main functions:

  1. Find and Evaluate green products and services
  2. Identify Federal green buying requirements
  3. Calculate the cost and benefits of purchasing choices
  4. Manage the green purchasing processes

(www.epa.gov/epp)

 

The role of the E.P.P. is very important because the federal government is such a huge entity requiring a wide variety of products within its operation.

 

In fact, the Federal government is the largest purveyor of goods and services in the U.S. with spending on goods and services totaling
$350 billion per year (www.epa.gov).

 

 

The Five Guiding Principles

 

The central components of the E.P.P. program were divided into five principles to streamline the focus for the other federal government entities to consult the system when making decisions on product purchasing.

 

The 5 Guiding Principles of the E.P.P. program are:

  1. Environment + Price + Performance
  2. Pollution Prevention
  3. Life Cycle Perspective/ Multiple Attributes
  4. Comparison of Environmental Impacts
  5. Environmental Performance Information

(www.epa.gov/epp)

 

These five principals must be given consideration by the federal procurement or purchasing agent when making a decision on a product or a service. In my own experience with marketing “green” products to the federal government, I have found that all of these principals are important.

 

However, the two principals that I found to be the mitigating factors are: price = performance, and the life cycle perspective/multiple attributes principal.

 

The environmental protection of a product could be great, but if it has performance differentials that lag behind the “non-green” or standard product alternative, that is a big issue.

 

The sensitivity to a given price point is always a consideration with green products. It can have a great environmental protective quality, and it could be an efficient, high performance product as well. The price has to be in line with the other products available on the market; if the price point is too high then it is going to be problematic to sell to the federal government.

 

Furthermore, the life cycle perspective/ multiple attributes principal is a critical component to federal government purchasing decisions. In my experience, the requests from federal entities were made for information on the performance of our product throughout its life cycle.

 

The federal procurement officers wanted to see data on how the product performed in certain conditions over certain intervals of time (30 days, 60 days, 120 days etc.) and during certain weather conditions.

 

They would study or inquire as to whether the product could do multiple green functions, for instance, if the product could be used on both land and water. The products with versatility and multiple uses, or attributes, will fare better in potentially gaining a federal government sales order.

 

Executive Order 13514

 

The E.P.P. program was given further significance with the implementation of Executive Order 13514, which essentially orders federal agencies to use sustainable practices when buying products or services (www.epa.gov/epp).

 

In my own experience in the green products area, working for a distributor, this executive order changed everything when dealing with the various federal government agencies. I could sense a change in the approach of the procurement officers that they felt it was important for them to take a more comprehensive look at the green product alternatives available.

 

The cost benefit analysis was, and always will be, an important factor in the decision making process as well. The difficulty with certain green alternatives is that their price point may be higher than a standard product with no environmental benefit.

 

The reasons for this higher price level are variable but could include the sourcing of certain commodity ingredients which are made from sustainable sources. Due to limited supply those ingredients will be more expensive, thus driving up the cost of the finished green product.

 

Role of E.P.P. and small businesses

 

The role of the E.P.P. can be very helpful to small businesses which are attempting to gain a foothold within a federal government agency. Any small business that is trying to market products to the federal government has to be familiar with the Federal Acquisition Regulation (FAR) guidelines.

 

The FAR guidelines are a uniform policy for the acquisition of supplies and services by federal agencies (www.epa.gov). Two important decisions occurred which provided further credence to the E.P.P. program and FAR:

 

  • In 2007: The Secretary of Agriculture announced that procurement preference be afforded to biobased products within certain designated items (www.epa.gov/epp)
  • In 2008: The Department of Agriculture published rules designating 27 biobased products for federal preferential procurement within the following areas: personal & facility cleaning products, greases, oils, lubricants, and construction products (www.epa.gov/epp)

 

In the event, you were a small business with production and/or distribution rights to any of the above mentioned products, then your business had a good chance to make a sale with the federal government.

 

The E.P.P. program has a great section of the website called Information for Vendors which provides valuable information to businesses who are looking to market green products or services to the federal government (www.epa.gov/epp).

 

This section of the website contains critical information on how to sell green products to the federal government. The section also provides a link to U.S. Business Advisor, which lists all the information on federal agencies: contact information and current procurement opportunities.

 

The benefits for a small business to work with E.P.P. are numerous and should be a strong consideration if you are in the green products market, or if you are looking to gain entry into this very important market.

 

The E.P.P. program was introduced to increase the availability of green products into the operations of the federal government. The goal being to minimize the environmental impact of their activity and to create opportunities for small businesses to partner with the federal government to implement these new products or services.

 

I think we can all agree that the focus on bringing more sustainable products into the marketplace is a very positive development for our future. I encourage you to visit their website www.epa.gov/epp for more information.