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Wealth Matters: What the Small Player Can Expect When Using a Lobbyist

January 25, 2013 by Leave a Comment

Few small-business owners — the kind of people who accumulate wealth through a service or manufacturing business and are working at it every day — have the deep pockets of a major corporation. Consider what Amgen, the world’s largest biotechnology company, did to help win an exemption in the so-called fiscal cliff bill to extend its patent on a profitable dialysis drug for two more years at a great cost to Medicare. It sent its 74 lobbyists in Washington to meet with — and direct contributions to — a host of politicians who worked in its favor.

But even if small businesses can’t buy the kind of influence that a huge company like Amgen, that does not mean they cannot buy influence at all. Still, as in other aspects of life, you get what you pay for.

Entrepreneurs would want to hire a lobbyist for a fairly straightforward reason: they have an issue they want addressed or changed and they have reached the point where they feel they need to act. What is more difficult is acting on that impulse effectively, knowing it could cost a lot of money.

Lawrence E. Scherer, a founder of State and Broadway, a lobbying firm in New York, said a typical retainer for a small-business client would be around $5,000 a month, but the assignment could last for a year or more. Suri Kasirer, once an aide to former Gov. Mario Cuomo of New York and president of Kasirer Consulting, said her typical retainer was $10,000 to $20,000 a month, with a three-month minimum.

“For small-business owners, the idea of having a lobbyist interact with a government is so novel and so out of their scope that $5,000 a month could seem daunting,” Mr. Scherer said. “But as government has more issues in front of it, it could be a cheap date.”

People who have success lobbying state and local governments — since the federal government is beyond the budget of individuals — tend to fall into three categories: they want something changed, they want something new or they want access.

Avik Kabessa, chief executive of Carmel Car and Limousine Service in New York City, said he became part of a group of livery car owners in 2008 that lobbied the state to establish a workers’ compensation fund for livery drivers and to repeal a sales tax on livery fares.

He said it took a year and a half for the lobbying effort to work. The costs were split among members of the group, called the Livery Round Table. (Livery companies fall between higher-end black car and limousine services and city taxis.)

“I wish we had the expertise, knowledge and contacts to have been able to do this ourselves,” he said. “But just as you would go to a doctor when you’re sick, you go to a lobbyist for your legislative affairs.”

Ms. Kasirer is working on a similar case with a group of small-business owners who do not often work well together. She is representing seven expediters — companies that are paid by contractors and developers to get various building permits in New York City. She said new rules could end their business.

“We were approached by a few of them, and we said, ‘Let’s get as many of them together as we could,’ ” she said. “They realized that ultimately they could be put out of business or their business could be so severely handicapped that they would have to lay off people.”

For small-business owners, forming an ad hoc group and putting aside any competitive business interest to get something greater for their industry is important. So, too, is having the patience and the willingness to accept something short of their goal and then go back for more.

Domenic Rom, a senior vice president at Technicolor, a postproduction company for film and television, became part of a group of similar companies that wanted to lobby for a tax credit. While New York offered tax credits for shooting a film or television show in the state, it did not offer similar credits to the postproduction part of the industry, which includes editing, sound design and adding computer-generated effects.

Mr. Rom said the 14 companies created the Post New York Alliance and each paid $5,000 in dues. They began lobbying in 2009, working with Mr. Scherer. By the next year, they received a 10 percent tax credit for postproduction work.

Article source: http://www.nytimes.com/2013/01/26/your-money/what-the-small-player-can-expect-when-using-a-lobbyist.html?partner=rss&emc=rss

Filed Under: Your Money Tagged With: , ,

Economix Blog: Employed Women, Dropping Out of the Labor Force

December 7, 2011 by Leave a Comment

In Friday’s jobs report coverage, we noted that the unemployment rate fell partly because 325,000 people dropped out of the labor force — that is, they were not even looking for work. Closer analysis reveals that the entirety of that decline was due to the departure of women — and particularly employed women — from the labor force.

In the month of February, the number of men in the labor force (working or actively looking) rose by about 23,000. By contrast, the number of women in the labor force fell by 339,000. (The numbers do not add to a 325,000 net loss because of rounding.)

Even more peculiar is what these lost female workers did before they dropped out.

Typically when we think of workers dropping out of the labor market these days, we think of workers who have been unemployed for a while and have simply given up looking for a job. But last month, almost all of the net loss of women from the labor force was accounted for by women who had jobs right before they dropped out.

Here is a pie chart for the 3,893,000 women who left the labor force in November — the gross number, so not subtracting those who newly entered the job market — sorted by how those women were categorized the month before:

DESCRIPTIONSource: Bureau of Labor Statistics

Now the numbers are volatile, so take this with a grain of salt. We also do not know why so many women left their jobs to drop out of the labor force. Probably some of them were going on maternity leave, and some quit their jobs for other reasons.

I would guess that most of them, though, were laid-off workers who had not yet started looking for a new job. After all, state and local governments are shedding workers in large numbers, and most state and local workers are women.

Article source: http://feeds.nytimes.com/click.phdo?i=7644e4bef6b8c929721c014571bd2d33

Filed Under: Economy News Tagged With: , ,

U.S. Posts Stronger Job Growth in July

August 5, 2011 by Leave a Comment

The July gain, of 117,000, is hardly robust enough to produce a substantial change in the employment picture. Still, it is better than the previous months, whose job gains were revised slightly upward to 46,000 in June and 53,000 in May.

After the early morning announcement, stocks see-sawed throughout the day, with investors vacillating between encouragement that the jobs number was not worse and disappointment that the world’s economies are not on firmer footing.

Europe, in particular, is struggling to control a debt crisis that began in its smaller countries and now threatens the much bigger economies of Italy and Spain. A flurry of phone calls among European leaders led to announcements in Italy and elsewhere that reforms would be speeded up. Those who have been waiting for the United States economy to kick into high gear took little comfort in Friday’s jobs report from the Labor Department. Companies added 154,000 jobs in July, but state and local governments continued to backslide, shedding 39,000 jobs. The unemployment rate slipped a notch to 9.1 percent, from 9.2 percent in June, but that was mainly because some people had simply given up looking for work.

The news tempered, but did not silence, talk of a double-dip recession. “It gives us some temporary relief,” said Nigel Gault, chief United States economist at IHS Global Insight. “I suspect, though, that relief will probably not last too long as people refocus on what they think will happen in the future.”

Indeed, economists are now worried about the reduction in government spending outlined in the Congressional deal earlier this week to raise the country’s debt ceiling. Deep divisions remain between the two political parties on how to cut spending further at a time when many analysts worry that the economy can ill afford it.Speaking at the Washington Navy Yard as he announced new programs for returning veterans of the Afghanistan and Iraq wars, President Obama called for Congress to extend the payroll tax credit and emergency unemployment insurance, measures that are scheduled to expire at the end of this year.

“There’s no contradiction between us taking some steps to put people to work right now and getting our long-term fiscal house in order,” Mr. Obama said. “In fact, the more we grow, the easier it will be to reduce our deficits.”

Other signs that the recovery has slowed to a crawl are mounting. The Commerce Department reported earlier this week that consumer spending, which accounts for up to 70 percent of economic activity, actually declined in June for the first time in nearly two years. A closely watched survey of manufacturers showed that employment in July grew at a slower rate than in June and that new orders of factory goods actually fell. Companies like Merck, Cisco and Boston Scientific have all announced layoffs in recent weeks. Housing prices are still extremely weak.

Jan Kokes, president of Kokes Family Home Builders, which creates residential communities for 55-and-over buyers in Ocean County, N.J., said that his staff had shrunk from a peak of 220 in 2007 to 87 now. With average home sales down from 200 a year to just 30, he said, he has no plans to hire. “There really aren’t any jobs in the construction industry right now,” he said.

The typical precursors to increased hiring remained sluggish. Average weekly hours worked, which tend to rise as a sign that employers are maximizing their current staff, were flat in the latest month, and average weekly earnings nudged up only slightly.

In temporary work, which often ticks up as employers prepare to expand, there were no job addition in July.

Tig Gilliam, chief executive of the Adecco Group North America, said that while information technology, engineering and some other industry sectors were seeking more temporary workers, some others, like government and the mortgage industry, were not. “It’s the story of growers and shrinkers,” Mr. Gilliam said.

Article source: http://www.nytimes.com/2011/08/06/business/economy/us-posts-solid-job-gains-amid-fears.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Budget Cuts Raise Doubt on Course of Recovery

April 12, 2011 by Leave a Comment

Economic conditions can determine the outcome of elections, and growth remains tepid and tentative just 18 months before voters decide if the president gets a second term.

The proposed federal spending cuts, which were decided late Friday, do not amount to much by themselves, about 0.25 percent of annual domestic activity. But they join a growing list of minor problems impeding growth, economists said, including higher fuel prices and bad weather, Europe’s creeping malaise and the effect of the Japanese earthquake.

The impact of those problems, combined with growing cuts in spending by federal, state and local governments, has led some experts who had forecast that the economy would expand by more than 4 percent in 2011 to retreat toward a 3 percent growth rate. And it raises the question of how many more small cuts the president can afford.

Diane Swonk, chief economist at Mesirow Financial, a Chicago investment firm, said she had cut her forecast for 2011 to 3.3 percent, from 4.2 percent. And if growth falls below 3 percent, she said, “You’re just running on a treadmill. You’re not getting anywhere.”

There are reasons for optimism. The Federal Reserve and private forecasters say that the economy’s vital signs are getting steadily stronger. Factories are expanding production; people are buying more cars. Leading forecasters like the firm Macroeconomic Advisors of St. Louis to predict that growth will accelerate after the first quarter.

Moreover, supporters of the cuts say that reduced government spending will stimulate economic growth, not damp it — and that the president could be among the political beneficiaries.

As the government spends less it borrows less, and companies can borrow more. As the government collects less money in taxes, companies may increase spending and investment.

“This cut combined with other cuts in entitlement reform will give the economy and businesses and investors some positive news on the fiscal front in Washington,” said Chris Edwards, director of tax policy studies at the Cato Institute, a libertarian think tank that favors even larger reductions in the federal spending.

There is also the potential that the budget deal will serve as a precedent for a broader deal on long-term spending. Economists say that such a deal would have immediate economic benefits, soothing the nerves of foreign investors who may be fretting about the government’s ability to confront its problems.

“I think the cuts are perfectly digestible in the context of the current expansion,” said Mark Zandi, chief economist of Moody’s Analytics. “And if out of this process it appears that we’ve made a good step toward fiscal discipline and laid out a mechanism for the main event, then it could be a plus.”

Mr. Zandi warned this year that a Republican plan for about $60 billion in cuts would do significant damage to the economy. He said that his views had moderated not just because the parties agreed to make smaller cuts, but because of recent declines in unemployment, to 8.8 percent in March, and 12 consecutive months of private sector job growth.

But the International Monetary Fund took a bleaker view Monday, predicting that the American economy would expand by a lackluster 2.8 percent in 2011, and a barely better 2.9 percent in 2012.

The I.M.F., which provides financing to governments, said in its annual report on the world’s economic outlook that the United States was at risk of cutting government spending too quickly.

It said that the cuts proposed by the Obama administration for 2012 and 2013 “will be challenging to implement, especially in an environment of weak growth and unemployment.” Cuts should be made more gradually, it said.

The report also said the United States needs to increase exports and that, in turn, depended on the willingness of other nations to let their currencies float freely.

“It has to come from exports for the United States to be able to sustain growth,” said Olivier Blanchard, one of the authors of the report. “Something needs to happen in the rest of the world, and it is not happening, or it is not happening fast enough.”

The I.M.F. warned that the world economy was growing on an unsustainable basis because developed nations were borrowing too much and developing nations were relying on exports paid for with that borrowed money, rather than taking steps to build sustainable domestic consumption.

“We are warning the emerging market countries that they may be getting to the point where things are too good,” Mr. Blanchard said.

The Obama administration has made increasing exports a central tenet of its economic strategy, and it has pushed for efforts by the I.M.F. and other international bodies to loosen the monetary policies of nations like China.

Natalie Wyeth, a Treasury Department spokeswoman, said the administration also was committed to reducing the federal debt.

“We will meet our commitments to the G-20 in Toronto and look forward to working with Congress to establish a credible, multiyear path to ensure our fiscal sustainability while delivering strong economic growth,” Ms. Wyeth said.

Article source: http://feeds.nytimes.com/click.phdo?i=9ca26cb1ff3119132320c067197c3f58

Filed Under: Business News Tagged With: , ,