The Realities of Raising the Minimum Wage

Earlier in 2013, questions about raising the minimum wage began to sweep across the nation as fast food workers in New York were pushing for $15 per hour. Although New York is an expensive city to live in, it causes a ripple effect throughout the nation about raising the wage across the board.

While everyone would like more money, is it sustainable in today’s economy to boost the minimum that employers have to give to staff?

Sounds Good, for a Single Employee

What would the impact be if minimum wage was to be bumped up by 10-percent for a single employee? This means that anyone getting such a low pay would receive $7.98 per hour instead of $7.25. If this employee is paid bi-weekly, he or she would get an extra $58.40 on the gross income.

After taxes and other government fees, this amount could be around $45.00. Over the course of a month, the employee would make around $90 extra to be put towards various bills.

Compensation of Wages Through Income

In order to pay that employee the extra $116.80 per month, that money has to come from somewhere. Although larger corporations are able to compensate given the sheer income versus employees that are actually getting minimum wage, smaller businesses may have a harder time.

If a small business has three full-time employees at minimum wage, that is an extra $350.40 that needs to be budgeted. The daily income would have to increase by $17.52. That may not sound like much to some organizations, but it could be quite monumental for small businesses that are scraping by as it is. This isn’t putting into account the $9 per hour wage that is being currently suggested.

Could Micro-businesses Fail?

According to the Bureau of Labor Statistics’ Consumer Price Index for Urban Consumers, an increase of 2.6-percent to the average employee would only cost an average of 0.03% to be covered by average income of businesses. The keyword in this last sentence is “average.” What about those businesses that fall below the average?

Between recent insurance adjustments and a proposed wage increase, some of the smaller operations may have a much harder time to recuperate from such expenses. Is this conducive to perpetuating the economy, or will these smaller businesses be provided with tax breaks in order to sustain themselves?

How Much is Too Much?

The proposed increase earlier in 2013 was a hike of more than 100-percent. Although this is not feasible for much of the country, supporters in New York were pushing as hard as they could for the $15 per hour amount. If the movement had been successful, small businesses that paid minimum wage would not be able to sustain such an increase. The labor force that was pushing for this hike in the wage obviously didn’t see the ramifications it would have to a vast collection of services, educational facilities and the millions of other jobs that couldn’t afford to pay experienced personnel $15 per hour.

Although most small business could sustain an increase such as $17 per day, it still puts additional strain on a company that is also faced with insurance adjustments and a poor economy. The proposal of “trickle-down economics” in the past did not work as evident in our current situation. Greater effort is needed towards creating a sustainable future before there is no future to sustain.

Author Bio: This is a guest post by Liz Nelson from WhiteFence.com. She is a freelance writer and blogger from Houston. Questions and comments can be sent to: liznelson17 @ gmail.com.

Siemens Gets World’s Largest Order for Onshore Wind Turbines in Iowa

Back in May, MidAmerican Energy Company had announced their intention to invest $1.9 billion for adding 1,050 megawatts of wind energy generation capacity in Iowa. Now the company has finalized the project by placing the world’s largest order for onshore wind turbines with Siemens.

Siemens Wind Turbines

Siemens Wind Turbines (photo – siemens.com)

Siemens will supply MidAmerican Energy with 448 wind turbines of type SWT-2.3-108.

Each of the turbines will have a nominal rating of 2.3 MW and rotor diameters of around 354 feet. If you line them up end-to-end, they would cover a distance of 44 miles.

These 448 turbines will be installed in five different wind projects across Iowa, including:-

- 500-megawatt Highland wind project;

- 250-megawatt Lundgren wind project;

- 138.6-megawatt Wellsburg wind project;

- 117-megawatt Macksburg wind project; and

- 44-megawatt Vienna II wind project

The five projects combined will produce enough renewable energy to power the equivalent of 317,000 average Iowa households, and the company is not passing on the cost of the investment to its customers.

On the contrary, the huge influx of clean energy will help stabilize electric rates, and they actually expect a rate reduction totaling an annual $10 million by 2017. When the five wind projects become operational in 2015, MidAmerican Energy expects to be able to start off with a $3.3 million rate reduction.

The economic development and job creation resulting from the project is also going to be significant.

For starters, it helps retain the 500 Siemens jobs at the manufacturing facility in Fort Madison, Iowa where the company plans to produce the rotor blades.

Iowa Governor Branstad said in a statement that it is great to have an Iowa-based energy company placing the world’s largest onshore order for wind turbines in a facility that has produced more than 9,000 blades since the plant began operations in 2007.

The nacelles and hubs for the wind turbines will be assembled at the Siemens plant in Hutchinson, Kansas, and this will help retain another 300 jobs.

The project will additionally help create 1,000 construction jobs during the two-year period while the five wind projects are being built, and another 40 permanent MidAmerican jobs subsequently.

Local governments in Iowa will collect an additional $360 million in property tax revenues over the next 30 years, and the landowners themselves will collect an additional $3.2 million per year.

Benefitfocus to Create 1200 High-Tech Jobs in South Carolina

Benefitfocus, which offers a cloud-based platform and solutions for employee benefits management, is breaking ground on an expansion project of its campus on Daniel Island, which is a part of Charleston, South Carolina.

Benefitfocus Inc., South Carolina

Benefitfocus Inc., South Carolina (photo – benefitfocus.com)

Benefitfocus is expanding from 13 to 40 acres, and the construction will nearly triple the size of the company’s headquarters to almost 500,000 square feet.

As part of the expansion, Benefitfocus announced plans to create 1,200 new high-tech jobs.

In the first phase of the expansion, the company will add a 145,000-square-foot Customer Success Center that will be operational in the first quarter of 2015.

South Carolina Governor Nikki Haley, who will attend the groundbreaking ceremony on Tuesday morning, said in a statement that Benefitfocus is an excellent example of innovation in the state, and added that the announcement highlights the entrepreneurial spirit that keeps South Carolina leading the way for the technology industry on the East Coast.

According to the Post and Courier, Benefitfocus is investing $60 million and is receiving an incentives package of $30 million provided it meets the capital investment and job creation goals.

Shawn Jenkins, president and CEO of Benefitfocus, said in a statement issued by the company that they were committed to the Charleston community and especially to their Daniel Island neighbors. He said they believe the new campus will add to the vitality of the region as the company continues to attract world-class engineering talent.

Berkeley County Supervisor Dan Davis said the announcement by Benefitfocus is a major headline for the region and the state.

Charleston Mayor Joseph P. Riley, Jr. noted that while Charleston’s economy has enjoyed many years of steady growth in the tech industry, this announcement by BenefitFocus represents the single largest combination of job creation and capital investment in Charleston’s history.

Benefitfocus, Inc. (NASDAQ: BNFT) was founded in Mount Pleasant, South Carolina in 2000. By the time they moved to the Daniel Island campus in 2006, BenefitFocus already had 230 employees, and expanded rapidly after moving into the new headquarters.

Last year, Benefitfocus added a new Design and Engineering building, and this year in September the company went public with an IPO that raised $70.6 million.

GM Announces $1.3B Investment in MI, OH, IN Plants

General Motors Co. (NYSE:GM) announced an investment of nearly $1.3 billion across five manufacturing locations in Michigan, Ohio and Indiana that will help create and retain 1,000 jobs.

GM's $1.3B investments in MI, OH, IN

GM’s $1.3B investments in MI, OH, IN (photo – gm.com)

The investments are being made to produce fuel-efficient engines and transmissions, streamline logistics and enhance vehicle quality.

This latest announcement brings GM’s investment in its U.S. facilities in 2013 to $2.8 billion.

Since 2009, GM has announced a total of $10.1 billion in investments for its U.S. operations, in the process creating and retaining more than 26,500 jobs.

The breakup of the latest investment in Michigan is as follows:-

Flint Assembly Plant, Flint, MI – $600 million

Romulus Powertrain Operations, Romulus, MI – $493.4 million

Detroit-Hamtramck Assembly, Detroit, MI – $121 million

The Flint Assembly Plant will get facility upgrades, including a paint shop. The Romulus Powertrain facility is getting $343.4 million for new equipment to produce an all-new 10-speed automatic transmission, and another $150 million to add capacity for a V6 engine. The Detroit-Hamtramck Assembly is getting a new logistics optimization center.

This brings GM’s total 2013 investment in the Flint Assembly Plant to $815 million. Investments announced for the Romulus Powertrain Operations this year add up to $498.4 million, and Detroit has received $121 million.

The Bedford Castings facility in Indiana is getting $22.6 million for producing components for the aforementioned new 10-speed transmission, and another $6.6 million for producing components for an existing six-speed transmission.

The Toledo Transmission Operations in Ohio is getting $30.6 million to add capacity for a six-speed transmission and tooling for a new variant.

Mark Reuss, GM’s executive vice president and North America president, said GM is committed to a strong American manufacturing base and creating jobs in dozens of communities throughout the country. More importantly, said Reuss, these investments add up to a higher quality and more fuel-efficient vehicles for GM customers.

UAW Vice President Joe Ashton, who leads the union’s GM Department, said this announcement was a win for American workers.

He said the UAW was proud to be a part of this successful collaboration with GM that has helped rebuild the nation’s economy, created good paying union jobs in communities across the country, and brought manufacturing that had been moved overseas back to the U.S.

Minnesota Creates $6.7M Angel Loan Fund To Help Startups

The Minnesota Department of Employment and Economic Development (DEED) has established a $6.7 million Angel Loan Fund that will provide no-interest loans to startup businesses.

Minnesota business startup

Minnesota business startup (photo – mn.gov)

The Angel Loan Fund will be administered by DEED and is housed under the agency’s State Small Business Credit Initiative (SSBCI).

The Angel Loan Fund will use federal dollars already allocated to SSBCI. DEED repurposed underutilized funds and obtained a waiver from the federal government.

The SSBCI has four programs including the Capital Access Program, Emerging Entrepreneurs Fund, Small Business Loan Guarantees, and now the Angel Loan Fund.

Startups may seek loans of up to $250,000 from the Angel Loan Fund for everything from startup costs and working capital to equipment purchase, construction, franchise funding, inventory financing, etc.

However, the fund has been designed to serve as a funding option for businesses that are certified under the state’s Angel Tax Credit Program. Applicants seeking funds from the Angel Loan Fund will therefore be required to first seek certification under the Angel Tax Credit Program.

This tax credit program was launched in July 2010, and has already delivered $137 million in assistance to help hundreds of startup businesses.

Minnesota Governor Mark Dayton, who did two stints as Minnesota’s commissioner of economic development, said in a statement that entrepreneurs who want to start new businesses and create jobs should have access to as much help as the state can reasonably provide.

The current DEED Commissioner Katie Clark Sieben said that businesses are the lifeblood of Minnesota’s economy, but many in their early stages struggle to access capital from conventional funding sources. Commissioner Sieben said this fund will help these businesses leverage new funding and support their success in a competitive business environment.

The SSBCI has a target of attracting $10 in private investment for every dollar provided to projects. At present, the SSBCI programs are expected to spur $150 million or more in lending to small businesses in Minnesota, and will help create 3,000 new jobs statewide.

DEED estimates that this new investment may leverage private investments to the tune of up to $261 million for small businesses in Minnesota over the next three years.

Illinois Manufacturing Lab Starts Off With 10 Pilot Projects

Officials from the University of Illinois and UI LABS joined Gov. Pat Quinn for the launch of the Illinois Manufacturing Lab (IML) at the Chicago headquarters of Gold Eagle Co.

Illinois Manufacturing Lab launch event

Illinois Manufacturing Lab launch event (photo – Gold Eagle Co)

IML is a public-private initiative supported by UI LABS and the University of Illinois, and will help small and medium sized manufacturers implement advanced manufacturing technology applications.

IML brings together research capabilities with technical resources and commercialization expertise. Governor Quinn said IML will help Illinois remain a national leader in making quality products and creating good jobs.

As a start, the Lab is working on ten pilot projects to solve manufacturing challenges at ten Illinois companies. These projects fall into three categories, including computational fluid dynamics (CFD), finite element analysis (FEA) and virtual machining.

One of the ten projects is for Gold Eagle Co., which produces and distributes aftermarket fluids and additives that help protect and enhance engine performance. Gold Eagle currently needs around a million bottles every week at its Chicago manufacturing facility.

IML will work with Gold Eagle on enhancing the productivity of the company’s bottle manufacturing using advanced manufacturing technologies.

Marc Blackman, president and CEO of Gold Eagle Co., said IML’s expertise and resources will help Gold Eagle increase productivity, which in turn will strengthen the company’s competitive advantage and spur new opportunities for growth in Illinois.

University of Illinois President Robert Easter said public-private partnerships such as the IML are the key to progress and economic growth, forging collaboration for harnessing the University’s research capabilities to help solve real-world challenges.

The Chicago-based UI LABS is also a research, training, and commercialization center that connects the University of Illinois with state and industry leaders.

UI LABS Board Chairman Warren Holtsberg said IML’s pilot projects are an important part of UI LABS’ broader efforts aimed at spurring job creation and economic development in Chicago, the State of Illinois and the entire Midwest region.

IML is funded through matching contributions from the State of Illinois and the University of Illinois. IML will be leveraging the UI LABS platform, and will work closely with other partners including the Illinois Department of Commerce and Economic Opportunity (DCEO) and the University of Illinois’ National Center for Supercomputing Applications (NCSA).

New Zealand Lands Avatar Sequels With Enhanced Film Incentives

The Government of New Zealand has signed a Memorandum of Understanding with Lightstorm Entertainment Inc and Twentieth Century Fox Film Corporation for the filming of three Avatar sequels.

Avatar sequels announcement in NZ

Avatar sequels announcement in NZ (photo – Wellington Mayor)

New Zealand Minister for Economic Development Steven Joyce and Minister for Arts, Culture and Heritage Christopher Finlayson signed the MOU on behalf of the government with Avatar Director James Cameron and Jon Landau.

The combined production spending on the three sequels is expected to reach at least NZ$500 million (US $413 million), including live action shooting and visual effects.

The NZ government recently hiked the screen production incentives it offers for international productions from 15 to 20 percent. For Avatar, the government is willing to add another five percent and make it 25 percent of the Qualifying New Zealand Production Expenditure (QNZPE).

As per the MoU, this additional five percent will be provided to Lightstorm and 20th Century Fox only if they undertake activities that bring significant economic benefits for New Zealand.

Economic Development Minister Steven Joyce said the Avatar sequels will provide hundreds of jobs and thousands of hours of work for the screen sector and for jobs right across the economy. Around 90 per cent of live-action crew jobs are likely to be filled by New Zealanders.

The film production work will be based out of Wellington, where the announcement was made. Wellington Mayor Celia Wade-Brown said this was an early Christmas present for the creative communities in Wellington and New Zealand.

Apart from the direct economic impact of half a billion dollars, the Mayor said the wider effects would be substantial. She added that the films define New Zealand as a good place to visit and great people to do business with.

The first Avatar movie generated around NZ$100 million in spending for Wellington and more than NZ$307 for the New Zealand economy. Spillover effects such as the establishment of the Matakina 3D breast cancer detection imaging technology have been attributed to the development work at Weta Digital, the Wellington-based special effects company which handled the work for Avatar.

The three Avatar sequels are scheduled for back-to-back Christmas releases from Dec 2016-18.

Media reports in 2011 had indicated that the Avatar sequels may be produced in the United States instead of New Zealand, and anticipated the creation of more than 700 jobs. The Santa Monica, California-based Lightstorm Entertainment even established a new studio in Manhattan Beach, CA that would have been useful for producing the Avatar sequels.

Cisco Canada to Invest $4B In Ontario Operations With 1700 New Jobs

Cisco Canada announced that it is collaborating with Ontario on the largest-ever job creating investment in the history of the Canadian province.

Cisco $4B investment in Ontario

Cisco $4B investment in Ontario (photo – ontario,ca)

The 10-year agreement signed between Ontario and Cisco was announced by Ontario Premier Kathleen Wynne and Cisco Canada President Nitin Kawale.

Under the terms of this agreement, Cisco will invest $4 billion over the next ten years to make Ontario one of its global R&D hubs for next-generation technologies.

Out of this $4 billion, a total of $2.2 billion is being allocated just for wages.

Over the next six years, Cisco will create 1,700 new jobs to take their workforce in Ontario up to 3,000.

A majority of the new hires will be for R&D positions in Ottawa and Toronto, and the company is looking towards fresh graduates whom they want to mentor as the next generation of talent in Ontario.

Over the next ten years, the total number of Cisco jobs in Ontario could potentially increase to 5,000.

The Ontario Government is supporting Cisco’s expansion by providing the company a $220 million grant that is contingent upon Cisco meeting its investment and job-creation plans.

The agreement is not just about creating jobs. By partnering with Cisco, the province aims to demonstrate a strong commitment towards fostering innovation, and bringing new technology to market through R&D.

Premier Kathleen Wynne said this announcement was about supporting the province’s talented technology workers, and together show the world what Ontario can do.

Dr. Eric Hoskins, Ontario Minister of Economic Development, Trade and Employment, said they’re sending a message to the world that Ontario is the best place anywhere for businesses to innovate, grow and create jobs.

Cisco Canada President Kawale said this marks a significant milestone for Cisco Canada and the Province of Ontario. He said the announcement builds on their existing partnership and mutual commitment to drive productivity and economic opportunities through innovation.

He said that together with the Province, Cisco will create high value jobs that will stimulate the economy. Kawale added that the initiative ensures that Ontario continues to be leader in the ICT industry with a vast talent pool representing Canada’s next generation of innovation.

Cisco products and services in Canada are provided by Cisco Systems Canada Co., a wholly owned subsidiary of San Jose, California-based Cisco Systems, Inc. (NASDAQ: CSCO).

New Sims Recycling Facility in NYC is a Model of Sustainability

Mayor Michael R. Bloomberg and other local officials announced the opening of the Sunset Park Material Recovery Facility that will serve as the principal recycling facility for all the curbside residential plastic, glass and metal recyclables from New York, NY.

Sims recycling facility, NYC

Sims recycling facility, NYC (photo – simsmunicipal.com)

The waterfront facility has the capacity to process 1,000 tons of recyclable material every day.

The recyclable material will be brought in by barge, and the renovated freight rail on the Brooklyn waterfront will be used to ship out the processed recyclables.

This will help eliminate an annual 150,000 truck trips and 240,000 annual miles of Sanitation Department vehicle travel on the City’s streets.

The Sunset Park facility, along with a series of recycling initiatives the City has launched recently, are aimed at increasing the amount of plastics, glass and metal recycled in New York City by 50 percent over the next five years.

Sims Municipal Recycling built the plant on a 11-acre site on the 30th Street Pier in the South Brooklyn Marine Terminal in Sunset Park, Brooklyn over the last three years, and they will also be operating it.

The design and the construction of the Sims facility incorporate several sustainability features that were good enough to help it win the NYC Excellence in Design Award back in 2010.

The buildings are entirely made of recycled steel from American steel plants, and sections of the site have been raised by four feet using mole rock from NYC tunneling projects mixed with recycled glass aggregate (RGA).

This feature of the construction saved the buildings and equipment on the elevated site from Hurricane Sandy, and the site is now proven to be protected from storm surges and sea level rise.

Ponds, bio-swales and other landscaping features manage storm water on-site. Part of the power consumed by the facility is generated by on-site renewable sources, including a 600 kW solar (photovoltaic) installation and a 100 kW wind turbine.

Three reefs have been built by the City at the western end of the pier, providing new habitats for marine life. Also, the Sims recycling facility complex includes a Recycling Education Center that is set to be completed next year and will be open to public and school groups.

New York City Economic Development Corporation (NYCEDC) President Kyle Kimball said the EDC is proud to have helped facilitate the creation of this cutting-edge facility, which he said would strengthen New York’s position as a model of sustainability for other cities and generate both environmental and economic benefits for New Yorkers.

Boeing Relocates Research Jobs to AL, MO, SC

Boeing (NYSE: BA) announced a restructuring of its BR&T (Boeing Research & Technology) unit with the establishment of technology research centers in five states.

Boeing

Photo – boeing.com

Boeing is establishing research centers in Huntsville, AL; Southern California; St. Louis, MO; North Charleston, SC; and in Seattle, WA.

As the centers are established, BR&T will add 300 to 400 jobs each in Alabama, Missouri and South Carolina.

At the same time, the number of BR&T jobs in Washington will be reduced by 800 to 1,200, and BR&T jobs in California are likewise expected to be reduced by 200 to 300.

Washington Governor Jay Inslee said in a statement that he was disappointed by Boeing’s plans to move research and technology jobs out of Washington State and establish research centers around the country.

Alabama Governor Robert Bentley issued a statement in which he noted that Boeing has been in Alabama for over 50 years, and this latest news was a continuation of the great partnership between the State of Alabama and Boeing.

This announcement that Boeing is relocating research jobs out of Washington coincides with the news that contract negotiation talks between the Machinists Union (IAM District 751) and Boeing have failed.

After meetings on Dec 10 and 11, the union made Boeing an offer, and Boeing’s counter-offer made on Dec 12 was rejected by the union.

If the union had accepted the modified contract, Boeing would have terminated its site selection process for the 777X project and would have announced that both the 777X full assembly and carbon fiber wing assembly facilities would be built in the Puget Sound area.

Boeing said they have received proposals for the project from 22 states, many of which have submitted multiple sites for consideration. Boeing is now looking at a total of 54 sites for the 777X, including Huntsville, St. Louis and North Charleston where the new BR&T technology research centers are being established.

The Huntsville research center will focus on simulation and decision analytics, and on metals and chemical technology. The St. Louis center will focus on systems technology, digital aviation and support technology, and on metallics and fabrication development. The North Charleston center will focus on manufacturing technology.

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