Tag Archives: jobs

Trade Agreements: Path to Prosperity

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 Mergen_Ashley

 

By Ashley E. Mergen
Senior Manager, International IP Policy
Global Intellectual Property Center | U.S. Chamber of Commerce

 

With the all the hysteria flying left and right in this election cycle, it’s no wonder folks are second-guessing why the U.S. even pursues free trade agreements. But the overheated rhetoric of presidential campaigns is obfuscating what really is at stake- American competitiveness.

The United States is already among the most open markets in the world – and has been since the end of World War II. That openness has honed the edge of American competitiveness and helped stem the price inflation that fuels inequality. Trade agreements are a tool to ensure that U.S. products and services have the same fair and non-discriminatory access to international markets.

As the leader of the free world, the U.S. has worked to shape the rules of the road in the international economy. Free trade agreements are one of the most effective mechanisms for doing so. The alternative to U.S. free trade agreements is a global economy shaped by others who don’t have America’s interests at heart.  The world is not sitting still: The World Trade Organization counts 419 trade agreements in force around the world, while the United States is party to only 20.

It’s true that 21st century trade deals like the Trans-Pacific Partnership (TPP) Agreement and Transatlantic Trade and Investment Partnership (TTIP) are growing even more complex, especially as they tackle emerging and critical issues like intellectual property rights in digital trade or biopharmaceuticals.

But knowledge-intensive trade isn’t limited to big corporations or scientists curing cancer. It is also providing a significant platform for entrepreneurial women to connect with previously untapped markets.Take Lolita Healy, who after obtaining her first copyright at the age of 12 built a multi-million dollar empire painting designs on glassware, eventually selling 14 million products around the world. Lolita is just one example of the 40 million Americans who are employed by the creative and knowledge-intensive industries. The U.S. Department of Commerce has found that they represent over a quarter of all jobs in the economy, driving 60% of total U.S. exports.

The best part is, there are Lolita’s everywhere- from Michigan to Malaysia or Pennsylvania to Peru. This year’s International IP Index from the U.S. Chamber of Commerce estimated that economies which espouse meaningful and robust IP rights also enjoy more access to venture capital, more foreign direct investment, more R&D expenditure, more growth in high-value jobs, the list goes on…

Trade agreements like the TPP and TTIP continue this path to prosperity by ensuring innovation — the very cornerstone of the business community — remains protected as we expand markets abroad. So before you buy into the hype, take a look behind the curtain and see how trade really puts our innovators front and center on the world’s stage.

WIPP Members Speak Out on Minimum Wage

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WE-Decide-2016_Landscape_edited

WE Decide 2016, Powered by Women Impacting Public Policy (WIPP) and Personal BlackBox, is uniting women in business across the country to raise their voices and engage in the 2016 presidential election to educate the candidates, the media and voters on the issues of importance to women entrepreneurs.

This week we focusing on the minimum wage and its impact on women-owned small businesses and their workers.  We have a guest blog post by Ceil McCloy and Brenda Barwick, two women business owners and WIPP members with differing viewpoints on the minimum wage.

Share your thoughts on this topic, and many other that impact women in business, by taking our poll:  http://wedecide2016.org/get-involved/todays-quick-poll/

Ceil McCloy

Raising the Minimum Wage Stabilizes Workforce  

By Ceil McCloy, CEO / President, Integrated Science Solutions, Inc.

 

President Franklin Delano Roosevelt signed the Fair Labor Standards Act of 1938 which among other provisions established a minimum wage.  Roosevelt, when he sent the bill to Congress in 1937 stated “all our able-bodied men and women should be able to have a fair day’s pay for a fair day’s work.  In the more than 75 years since Congress first enacted a federal minimum wage, at 25 cents an hour,  lawmakers have increased it many times, reaching the current level of $7.25 an hour in 2009. And with every increase the same objections have been raised.  It will increase unemployment.  It will hurt small businesses and put them out of business. It will slow the economy. These doomsday predictions have never come to fruition.

Employers are recognizing that an increase in minimum wage is good for business. Workers earning low wages tend to be less committed to their jobs than better paid workers and are less likely to stay at their jobs. The accommodations and food services sector, with a majority of minimum wage workers, has an annual turnover rate of nearly 63 percent, while “limited service restaurants” (fast food restaurants such as McDonald’s) have a turnover rate of well over 100%. The retail trade, which employs cashiers, customer service representatives, stock clerks and other low-wage workers, has a turnover rate of nearly 50 percent.  Employee turnover forces businesses to constantly find and train new workers, costing firms significant amounts of money and time. In the fast food industry, the cost of turnover is approximately $4,700 each time a worker leaves his or her job. Studies show that higher wages can substantially reduce turnover and the costs associated with replacing lost workers. The benefit from lower turnover explains why large companies as well as many small businesses have chosen to invest in higher wages as part of a highly competitive business strategy.

Job loss is often stated as a reason not to increase the minimum wage.  This is simply not true.  As Goldman Sachs analysts (2016) recently noted, citing a 2010 study by University of California economists that examined job-growth patterns across every border in the U.S. where one county had a higher wage than a neighboring county, “the economic literature has typically found no effect on employment” from recent U.S. minimum-wage increases.  This report’s findings mirror decades of more sophisticated academic research, providing simple confirmation that opponents’ predictions of job losses when minimum-wage increases are not rooted in facts.

Can raising the minimum wage help the economy? Yes!  Research has shown that raising the minimum wage boosts consumer spending, increasing the demand that drives economic growth. A 2011 study by the Chicago Federal Reserve Bank found that minimum wage increases raise incomes and increase consumer spending.  The authors examined 23 years of household spending data and found that for every dollar increase for a minimum wage worker results in $2,800 in new consumer spending by his or her household over the following year. A 2009 study by the Economic Policy Institute estimates that President Obama’s campaign to raise the minimum wage to $9.50 by 2011 would inject $60 billion in additional spending into the economy.

We should enact legislation to increase the federal minimum wage and peg increases to the annual inflation rate.

brenda jones

 

Econ 101: Free Markets Raise Wages, Not Government

By Brenda Barwick, APR, President of Jones PR and Oklahoma Chair of Maggie’s List.

 

One of the biggest misconceptions about conservatives on the issue of minimum wage is that we want the lowest wage, when in fact we want to pay our people as high as possible.  One of the principles that makes America unique from almost all other countries is that our economy was founded on a free market system, or simply, supply and demand.

An economy with minimal government regulation allows for businesses to grow and prosper naturally, which results in wage growth.  For examples of where market forces have dramatically increased base wages, look no further than some of America’s cities that have strategically replaced traditional low-paying industry jobs by recruiting high-tech and health-sciences companies with higher wage positions, resulting in greater prosperity and transformational change.

Federal mandates prohibit the free market from functioning properly as intended.  Government interference is particularly disruptive and harmful to small business owner’s ability to make the best decisions for her employees.  Business owners and managers know their business better than anyone else and are naturally incentivized to see their employees succeed.  There should be a floor for common decency and respect, but it is all together different to mandate high wages that business owners cannot meet.

Now that it is summer, most of us reading this blog cannot make up for a $15 mandatory increase when we have budgeted $8 or $10 for a summer position.  We all remember the joy and excitement of our first job in high school or college where we learned basic job skills.  We need to ensure teens and young adults have the same opportunities we enjoyed and inspired us to strive beyond entry-level jobs so we can make a living wage for our families.  By taking this opportunity away from young ambitious Americans by pricing them out of the marketplace, America’s future could be comprised of a workforce who never learned basic job skills before they arrive at their first real job.

The most prosperous path forward for all Americans of any age is to allow the free market to work properly. This system provides boundless opportunities for all Americans who desire to work and contribute to our society.  Give our young people the same opportunities that benefited and prepared us for prosperous careers.

Let us know what you think! Take WE Decide 2016’s minimum wage quick poll here:

http://wedecide2016.org/get-involved/todays-quick-poll/ 

A Scorecard That Matters

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WG Blog

By Sydney Ringer, WIPP Government Relations Intern

Earlier this year, Dell released their 2015 Global Women Entrepreneur Leaders Scorecard, a new data-driven diagnostic tool that identifies the impediments to high-impact entrepreneurship. It also introduces steps that can be taken to improve the conditions for high-impact female entrepreneurship development. Countries were rated on five categories: business environment, gendered access, leadership and rights, pipeline for entrepreneurship, and potential entrepreneur leaders. The United States, France, the United Kingdom, Sweden, Australia, and Canada are at the top of the list.

While the United States was at the top of the rankings system, our rating was still only 71/100 across the categories. Only 13% of start-ups have women on their executive team, and just 3% of start-ups with women CEOs received venture capital funding in 2014.[1] According to Dr. Ruta Aidis, the project director, “if women entrepreneurs were starting growth-oriented businesses at the same rate as men in the United States, we could potentially have 15 million more jobs in the next two years”.[2] The Scored is another reminder of just how challenging it can be for women to succeed even today, and even in countries like the United Sates.

First, female role models in business and government are critically important. In the U.S. only 22% of the female population knows an entrepreneur despite 46% of women believing they have the skills necessary to start a business. Women entrepreneurs can leverage their success to provide real business insights on how to encourage women to start their own businesses. Once Women decide to start their own business they have modest aspirations because access to capital is still a huge barrier. Women-owned companies are 50% less capitalized than their male-owned counterparts.

While this report demonstrates all the growth the United States and other countries still need to do, it also presents some interesting ways to encourage women entrepreneurs. On the international level, the International Trade Centre launched a global initiative to increase the proportion of public procurement contracts being awarded to women owned businesses. The study also suggests corporations diversify their leadership and increase the number of women-owned business vendors in their supply chain.

The media can also play an important role as well. Right now global media only features women as subjects in print, radio and television 25% of the time. Seeing more articles featuring women as the top story on their homepage could inspire women to follow in their footsteps.

Every country in the study, even the top rated, has room for improvement. More than 70% of the countries still rated scored less than 50 out of 100. Despite challenges, women-owned businesses are growing, but they would be growing at an exponentially faster rate if they got some encouragement from their governments, corporations, media, and other entrepreneurs.

[1] CNN Money, “The Best Country For Women Entrepreneurs.” 2015. Available online at http://money.cnn.com/2015/06/30/smallbusiness/women-entrepreneurs-dell/index.html?category=smallbusiness

[2] “Global Women Entrepreneur Scorecard Executive Summary”. 2015. Available online at http://i.dell.com/sites/doccontent/corporate/secure/en/Documents/2015-GWEL-Scorecard-Executive-Summary.pdf

Time for Congress to Move a Neutral Net into Drive

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WIPP infographic II

Capital investment is a solid predictor of economic health. That’s why recent news in the communications policy arena deserves Congress’ attention.

Last week, a new regulatory regime over the Internet took effect. But before these rules came to life, a half-dozen small Internet providers in the Midwest, South and Pacific Northwest told federal officials that they had been forced to cut back on expanding faster broadband service because of the FCC’s recent decision to begin micromanaging the Internet.

All six of these Internet providers specialize in serving small towns and underserved areas; none have the size or scale to accommodate the new regulations’ expenses without budget cuts elsewhere. Moreover, their statements were made under threat of perjury.

For women in particular, this issue should raise serious concerns. Almost half of women-owned businesses are home-based. Anything that slows home broadband deployment has a potential to impact the full economic participation of women.

These verified reports about higher regulatory costs and less money for investment are a clear “canary in the coal mine” warning to Congress about the FCC’s decision to regulate the Internet with Title II regulations written in 1934. That 3-2 party line vote on February 26 overturned decades of successful experience about the benefits of “light touch” rules for the Internet.

Prior to that ill-fated FCC vote, federal Internet policy was both an area of broad agreement and a shining example of successfully encouraging an important new industry. The lack of federal micromanagement that was a hallmark of federal policy since Bill Clinton’s Presidency was key to unleashing a tidal wave of communications investment — $1.3 trillion since 1996 and $75 billion just in 2013.

The results speak for themselves, especially when compared with other countries’ experiences. The U.S. has a huge lead over Europe in both fiber optic deployment and high-speed 4G LTE broadband. Americans spend more time talking on their mobile phones than people in any developed country in the world.

This investment also produced jobs – lots of them. The growth of the mobile app economy, which developed because of America’s high-speed wireless networks, sustains more than 750,000 U.S. jobs, according to the Progressive Policy Institute.

The FCC’s decision to regulate the Internet as a public utility with outdated Title II rules undercuts the very policies that helped spur this success. The FCC’s action is as inexplicable as it is wrongheaded.

Indeed, the Commission’s efforts to explain this action border on the comical. As Hal Singer noted in a recent Forbes commentary, the FCC’s own economic analysis of its action is almost amusing. For example, the agency claimed that the broadband industry’s strong record of investment in 2010 showed that its regulations encourage investment, despite the fact that the Commission’s vote on a more reasonable set of Internet rules occurred on December 21, 2010.

Ultimately, the key reason that Congress must update America’s communications laws is to protect the people who lost an opportunity for better Internet service, because the FCC’s action added pointless new expenses and legal uncertainties to broadband deployment.

The 8,000 St. Louis-area residents served by Wisper ISP, a Missouri-based Internet provider, have felt the negative impact of these utility style regulations. As a result of the FCC’s decision, Wisper estimates that compliance costs will grow to 10% of its operating revenue. It has already had to cut investment, resulting in what the company calls “slower broadband speeds, less dense coverage, and absence of expansion into new areas.”

It is a testament to the bipartisan, light-touch policies implemented back when Internet access meant a 56 KB modem that consumers enjoy so much today. Yet, at just the time when the United States was poised to run the table in a 21st century economy, the FCC pulled the rug out from under small businesses. The FCC’s February vote, and last week’s rules enactment, undid the phenomenal success of the modern Internet.

It is time for Congress to set things right again. We hope that members of both parties come together to enact common-sense legislation that both protects the Internet and reinstitutes the wise telecom policy that has brought us the Internet we use and enjoy today.