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Governor Initiates Regulatory Overhaul; Which Rules Would You Change?

Posted by John Regan on Mar 31, 2015 2:09:00 PM

Associated Industries of Massachusetts (AIM) will support the Baker Administration’s newly announced regulatory reform initiative by collecting information from Bay State employers about regulations that needlessly impede economic growth.

Baker2014AIM President Richard C. Lord said the association has established a Web page that allows employers to report regulations that are inefficient, ineffective or outdated. The association will forward all of the information it receives to state officials as they conducts their yearlong regulatory review.

“The 4,500 employer members of Associated Industries of Massachusetts (AIM) unequivocally support regulatory reform. One of the key objectives of AIM’s long-term economic plan, the Blueprint for the Next Century, is for Massachusetts to develop a world-class state regulatory system that ensures the welfare of society in a manner that meets the highest standards for efficiency and predictability,” Lord said 

“AIM has collected a rich library of evidence over the years from employers about regulations that work and those that do not. We expect to add to that body of information and share it with the administration and the Legislature as we work together to make the vision of effective regulation a reality.”

Governor Charles D. Baker signed an executive order today initiating a comprehensive review process for all regulations enforced by the Executive branch and leaving in place the regulatory moratorium announced by the administration earlier this year. The order requires state agencies to ensure that existing regulations are clear and concise and that any newly proposed regulations are measured for their potential impact on businesses of all sizes.

The administration will encourage public input on proposed regulations. Business and competitiveness impact statements will be made available on the commonwealth’s Web site.

Baker identified regulatory reform as an economic priority during a speech to the AIM Executive Forum last November.

“This will be an intensive process that ultimately makes Massachusetts a more efficient and competitive place to live and work, while driving economic growth,” the governor said in a statement today.

Added Secretary of Administration and Finance Kristen Lepoere: “We will ensure that all regulations administered by the Executive Department benefit the Commonwealth without undue burdens or costs and serve a legitimate purpose in making Massachusetts a safe, healthy, and effective place to do business.”

AIM’s Blueprint for the Next Century offers several suggestions for improving the state regulatory environment:

  • The governor should appoint an independent ombudsperson to review comments, suggestions and complaints from employers about ineffective state regulations and/or the manner in which those regulations are enforced. The ombudsperson would have the authority to determine which regulations and/or enforcement issues represent real impediments to growth and recommend changes to the Legislature or the executive branch.
  • Encourage regulators and employers to adopt “smart partnerships” to ensure that government-business interactions solve problems instead of propping up bureaucracies.
  • Engage willing employers who are global leaders in productivity and process improvement to streamline the operation of state government agencies. General Electric, an AIM member, provided just such a service for the New York State Highway Department at the request of Governor Andrew Cuomo. GE Capital used its expertise in lean process to help the Highway Department reduce the processing time for curb-cut requests from 70 days to three days.

Please contact Brad MacDougall, Vice President of Government Affairs at AIM, bmacdougall@aimnet.org, with questions or comments.

Topics: Business Regulation, Regulation, Charlie Baker

Desalitech, Hollingsworth & Vose, Massport Win 2015 AIM Global Trade Awards

Posted by Kristen Rupert on Mar 26, 2015 12:20:00 PM

A seventh-generation family owned manufacturer, an Israeli maker of water-treatment systems and the operator of Logan Airport were named winners today of the 2015 AIM International Business Council Global Trade Awards.

Hollingsworth & Vose Company of East Walpole; Desalitech, which maintains its North American headquarters in Newton; and Massport will be honored during the Associated Industries of Massachusetts Centennial Annual Meeting on May 8 in Boston.  The meeting will include a keynote address by Governor Charles D. Baker.

The Global Trade Awards, now in their twentieth year, recognize Massachusetts companies and public agencies of all sizes that have demonstrated excellence in international trade.

“Massachusetts companies are key players in the global economy, offering innovative products and services produced in Massachusetts to markets across the globe,” said Richard Lord, president and CEO of AIM.

“From providing access to overseas markets with non-stop flights from Boston to offering new environmentally sensitive technologies and products that are critical to a variety of businesses, local companies have developed strategies to be successful globally.”

2015 Global Trade Award winners are: 

Diplomat’s AwardDesalitech, Newton

DesalitechFounded in 2008 in Israel, Desalitech produces high-efficiency water treatment systems to address the global challenge of water scarcity.  The company's ReFlex (TM) Reverse Osmosis products feature patented technology that typically reduces water-treatment waste by 50-70 percent and energy consumption by up to 35 percent, saving significant operating costs for industrial and agricultural operations around the world.  Desalitech systems are used for industrial water purification by Coca Cola in Asia, consumer-product manufacturing in Mexico, and beverage production in Africa. In Singapore and Israel, Desalitech products are used for water recycling.

Ambassador’s Award - Massport, Boston

MassportMassport, an independent public aviation and port authority, owns and operates Boston Logan International Airport, Hanscom Field and Worcester Regional Airport. Logan has added 19 new international non-stop flights during the past eight years, connecting the business community with clients and prospects overseas.  New flights carry executives, tourists, university professors, hospital researchers, technology entrepreneurs and students from the commonwealth to fast-growing, emerging economies in Latin America, Asia and the Middle East.  Increased international service also makes it easier for foreign companies and executives to visit and invest in Massachusetts.

Chairman’s Award - Hollingsworth & Vose Company, East Walpole

HollingsworthHollingsworth & Vose Company is a global manufacturer of advanced materials used in filtration, battery and industrial applications.  H&V's Massachusetts-made products can be found in filters for clean rooms, hospitals, computers, commercial buildings, homes, cars, trucks and heavy duty equipment, and also in batteries used in telecom and hybrid vehicles.  Family-owned for seven generations, the company's origins can be traced back to 1728 when an "Act for the Encouragement of Papermaking" was passed by the General Court of the Massachusetts Bay Colony. The company operates 13 manufacturing plants in North America, Europe, India and China, supplying customers in over 75 countries. 

The AIM International Business Council helps Massachusetts employers engage in international trade and expand their global business activities. 

AIM 2015 Annual Meeting

Topics: International Trade, AIM International Business Council

Video Blog | Lt. Governor Polito Discusses T, Budget

Posted by Christopher Geehern on Mar 25, 2015 9:43:03 AM

Massachusetts Lt. Governor Karyn Polito discussed the state budget, the MBTA and other topics yesterday with moderator R.D. Sahl at a forum in Boston sponsored by Associated Industries of Massachusetts, Denterlein and NAIOP Massachusetts.

Topics: State Budget, Lt. Governor Karyn Polito

Job Growth Accelerates Statewide

Posted by Andre Mayer on Mar 13, 2015 1:34:32 PM

Metropolitan areas across the state outpaced Greater Boston in employment growth during 2014, the Massachusetts Executive Office of Labor and Workforce Development reported Thursday. Barnstable (+3.6%), Leominster-Gardner (+2.7%), New Bedford (+2.5%), Pittsfield (2.5%), and Worcester (+2.2%) all saw higher rates of job creation than the aggregated Boston statistical area (1.9%); the only laggard was Springfield (+1.4%).  

A similar pattern prevailed among the divisions within Greater Boston. While the Boston-Cambridge-Newton core added jobs at a 1.8% rate, matched by Lowell-Billerica-Chelmsford, employment in the other seven divisions grew faster: Lawrence-Methuen and Lynn-Saugus-Marblehead, 3.3%; Peabody-Salem-Beverly, 2.7%; Brockton-Bridgewater-Easton, 2.5%; Haverhill-Newburyport-Amesbury and Taunton-Middlebourough-Norton, 2.3%; and Framingham, 2.1%.

Compared to most other states, Massachusetts added jobs quickly coming out of the Great Recession. The Boston area led the way, along with other tech- and services-heavy east- and west-coast cities. By 2014, however, solid employment growth had taken hold across the country – and across Massachusetts. 

(These figures, developed by the Bureau of Labor Statistics of the U.S. Department of Labor, reflect revised metropolitan area definitions based on commuting data from the 2010 census.)

Topics: Massachusetts economy, Jobs

Strong Employment Report May Signal Pressure on Wages

Posted by Andre Mayer on Mar 10, 2015 1:47:00 PM

Massachusetts added only 2,600 jobs in January but the unemployment rate dropped two-tenths of a point to 5.1 percent, a point below its level of last January, according to a preliminary report released today. The state unemployment rate is at its lowest level since May 2008.

Although the U.S. has seen consistently high levels of net job creation during the past year, the nation’s unemployment rate remains above the state’s: 5.7 percent in January and 5.5 percent in February.

Employment grew over the year in all sectors except Manufacturing (-1.0%). The largest gainers by percentage were Construction (+3.8%) and Information (+2.6%); by jobs added, Education and Health Services (+16,800) and Professional, Scientific and Business Services (+12,800) led the way.

Total employment in Massachusetts is at an all-time high, and the unemployment rate is at a level last seen before the Great Recession (although the economy was weakening in May 2008). Alternative measures of unemployment counting involuntary, part-time and discouraged workers are likewise at or near pre-recession levels.

The major remaining “deficits” are overall workforce participation, partly attributable to aging, and wages, which have had weak growth at best. The signs point to labor shortages ahead, and upward pressure on pay – especially in a state like Massachusetts with relatively slow population growth.

State reports will “catch up” with the national data next week, when we will see a Massachusetts report for February incorporating annual revisions. The revisions will show somewhat lower job growth (60,700 versus 68,000) and lower monthly unemployment rates in 2014 compared to initial reports. The household survey, the basis of the unemployment rate, shows a gain of 97,800 jobs on the year.

The federal Bureau of Labor Statistics develops the national and state data; the Massachusetts report is released by the state’s Executive Office of Labor and Workforce Development.

Topics: Massachusetts economy, Jobs, Unemployment

What is the Real Cost of Your Products?

Posted by Matthew Gardner on Mar 5, 2015 9:00:00 AM

Editor's note - Matthew Gardner is Managing Partner of Sustainserv, Inc., an international consultancy helping clients develop sustainability strategies, programs and communications.

What are the environmental impacts associated with the products your company provides to its customers?

MosiacA growing number of companies are seeking to understand, document, and in some cases, take responsibility for the entire range of environmental impacts that their products have, from the extraction of raw materials, to manufacturing, to distribution of the product, to usage, to the end of the product’s usable life. It’s a far different approach than evaluating the cost of a product only to the point when it leaves the factory and reaches the customer.

Why would a company broaden its view of environmental impacts?

  • The company may want to market a product as “eco-friendly,” or “green,” promoting the fact that it offers environmental benefits over other products.
  • The company may wish to understand the factors that contribute to not only the cost of manufacturing a product, but to the total cost of ownership of that product – another potentially favorable angle from which to market.
  • There is increasing interest among employers in formal environmental certifications for some types of products, and these certifications often require formal accounting methodologies (e.g. ISO 14040/14044). 

Life Cycle Analysis (LCA) is a sophisticated method in which material and energy inputs to a product are cataloged, and the environmental impacts calculated, scaled and weighted into an overall environmental profile. By understanding how a product is used in the “real world,” and what its typical disposition is at the end of its life, you can develop a quantitative picture of the relative impact of the manufacturing process versus the use phase versus the end-of-life stage and see where the largest opportunities for improvement may lie.

For example, LCA can quantify whether there are energy and environmental benefits to using recycled versus virgin materials in a product. Those same approaches can uncover parasitic energy losses in electronics, or identify opportunities to show end-users how to use products more efficiently to lower their operational costs.

One of the criticisms of LCA is that comprehensive and rigorous reviews can be complicated and time consuming (read: expensive), especially when analyses related to toxic materials and ecosystem impacts are included. Sometimes the level of detail required by the ISO standards don’t provide results that justify the time and expense required.

There are alternative and cost-effective approaches to Life Cycle Analyses called “screening” LCAs. The idea is that smart, informed approximations regarding materials used and processes employed enable the user to focus efforts on alternative design or manufacturing approaches that address the stages that are of most concern. 

Register for the AIM Sustainability Roundtable

Topics: Environment, Energy, Sustainability

Budget Proposal Targets 'Unsustainable' Spending Growth

Posted by Brad MacDougall on Mar 4, 2015 3:40:55 PM

What does the proposed state budget filed today by Governor Charlie Baker mean for Massachusetts employers?

Baker2014The bottom line is pretty simple – state spending is growing at twice the rate of tax revenue and that trend is unsustainable. The new administration must therefore make difficult choices to close a projected $1.5 billion budget shortfall for next fiscal year just weeks after addressing an unexpected $750 million gap in the current budget.

It's something that that the CEO of almost every member company of Associated Industries of Massachusetts has had to do at one time or another.

Secretary of Administration and Finance Kristen Lepore said the administration will not raise taxes or fees, nor tap the state’s rainy day fund, meant for fiscal emergencies. At the same time, the allocation of scarce budget resources provides an insight into the new governor’s long-term priorities, from having state employees pay an increased share of their health insurance premiums to increased aid to cities and towns.

“For two consecutive years, our spending growth has outpaced our revenue growth. After over $1 billion in budgetary reductions last year, state spending still grew at 7.8% more than the year before, while tax revenue only grew at 4%. This is simply an unsustainable path for Massachusetts - we must live within our means,” the governor said in his budget message.

“This proposal keeps spending growth around 3%, and allows us to begin to address long-term structural changes and reduce our reliance on one-time revenue. We protect our rainy day fund, because in a largely healthy economy it is clear our issues are based on a need to prioritize spending and make state government more efficient. We also avoid layoffs through an early retirement package that will reduce the size and cost of the state workforce.”

Fiscal discipline and predictability are welcome themes for Massachusetts employers who, according to the Massachusetts Taxpayers Foundation, pay approximately $150 million more in taxes each year than they did a decade ago. CEOs expect the government to conduct its financial affairs in the same responsible manner as the corner grocery store, the young biotechnology company or millions of citizens managing the household budget.

“The 4,500 member companies of Associated Industries of Massachusetts typically pay more attention to the budget as a proxy for the ability of state government to manage its affairs, rather than to individual line items,” said John Regan, Executive Vice President of Government Affairs at AIM.

“The governor’s proposed budget takes constructive steps toward ensuring that the commonwealth lives within its means.”

The projected shortfall for Fiscal Year 2016 is driven by two factors, according to the Taxpayers Foundation.

The first is a significant increase in costs for items and programs considered nondiscretionary — such as Medicaid, the state-federal health program for poor and disabled people, and pensions — just to keep the same level of service next year. The second is the state’s heavy reliance on one-time sources of money — pots of cash that are tough or impossible to tap again — this fiscal year.

Those sources of money total about $1 billion and include tax settlements with corporations, a temporary diversion of tax revenue intended for the state’s rainy day fund, and casino licensing fees.

Here are the key elements of the Baker budget proposal:

  • A $34 million increase, or 3.6%, in unrestricted local aid to $980 million
  • A $105.3 million increase in Chapter 70 funding, which increases funding for all 321 school districts
  • A phase in of the Earned Income Tax Credit to 30% of the federal limit while phasing out the Film Tax Credit
  • Funding local aid by 75% of revenue growth, a 3.6% increase
  • Increasing transportation spending by 20%, including $187 million, or a 53% increase, in direct aid to the MBTA
  • An early retirement incentive program to responsibly reduce the state’s administrative spending 

Topics: Budget, Taxes, Charlie Baker

Snow Can't Chill Employer Confidence

Posted by Andre Mayer on Mar 3, 2015 9:00:00 AM

Epic snow and cold did little to chill the optimism of Massachusetts employers as business confidence surged in February for a sixth consecutive month.

BCI.February.2015The Associated Industries of Massachusetts Business Confidence Index (BCI) rose 1.7 points to 59.8 on a 100-point scale - a total gain of 9.8 points since the same month in 2014. The increase reflects growing employer bullishness about the state and national economies, as well as their own growth and hiring plans.

“A year ago the Index was at an even 50, which is neutral on our scale,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.

“Since then, employers have concluded that economic growth, though uneven, is well established and sustainable. As a result, the Index is at its highest level since October 2006 (59.9), before the Great Recession, and is approaching 60 – a reading we have not seen in 10 years (62.3 in February 2005).”

The AIM Index, based on a survey of Massachusetts employers, has appeared monthly since July 1991. It is calculated on a 100-point scale, with 50 as neutral; a reading above 50 is positive, while below 50 is negative. The Index reached its historic high of 68.5 on two occasions in 1997-98, and its all-time low of 33.3 in February 2009.

Analysts say the confidence numbers foreshadow accelerating economic growth in 2015. Employer confidence about conditions six months from now rose two full points to 62.1 in February, while readings of sales and employment activity also increased.

“For the previous six months, employers who report adding staff outnumber those with decreases by about two-to-one (31% - 16%), but for the next period the ratio is better than four-to-one (37% - 8%),” said Michael A. Tyler, CFA, Chief Investment Officer, Eastern Bank Wealth Management, a BEA member.

“A determination to bring on additional personnel is in itself a very strong indication of employer confidence.”  

The sub-index for national conditions, a laggard through the recovery, is now well above 50, at its best level since August 2007, before the recession. The indicator of state conditions is just below 60, at its highest point since December 2000, before the prior downturn.

“Massachusetts employers believe that business conditions are generally good, and will continue to improve,” said Fred Breimyer, regional economist at the FDIC.

“Their optimism, though certainly restrained by the experience of severe recession, is now firmly established, and amply supported by trends in the economy.”   

Topics: AIM Business Confidence Index, Massachusetts economy, Jobs

Closing the Skills Gap in Manufacturing

Posted by Jack Healy on Mar 2, 2015 8:00:00 AM

Editor's Note - Jack Healy is Director of Operations at the Massachusetts Manufacturing Extension Partnership.

manufacturingA study of manufacturing enterprises in North Central Massachusetts, conducted by RTI and the Massachusetts Manufacturing Extension Partnership (MassMEP), found that 69 percent of manufacturers indicated a "lack of qualified job candidates was their biggest barrier to growth." While the North Central area is a perennial labor surplus area, the lack of qualified candidates with the necessary manufacturing skills comes as no surprise.

A preliminary survey of manufacturers in western Massachusetts found this barrier to growth to be even more onerous – 77 percent of the manufacturers contacted indicated that the lack of qualified candidates was a barrier to growth.

There has been a significant downsizing of low-tech manufacturing jobs caused by the 2009 recession resulting in numerous people desperate for jobs. Ironically, the study also shows there are Massachusetts manufacturers desperate for qualified workers to fill the jobs they already have available.

The Boston Consulting Group (BCG) in their report, "U.S. Skills Gap – Could it Threaten a Manufacturing Renaissance," observed, "The real problem is that companies have become too passive in recruiting and developing skilled workers at a time when U.S. education systems have moved away from a focus on manufacturing skills in order to put greater emphasis on other capabilities. Over the long term, therefore, serious skills shortages could develop unless action is taken."

The BCG report stated, "Companies are not doing enough to cultivate a new generation of skilled manufacturing workers in the U.S."

This observation does not pertain to Massachusetts because, in response to our state's manufacturing skills gap, a group of manufacturers formed theManufacturing Advancement Center Workforce Innovation Collaborative (MACWIC). The vision of MACWIC is to be the statewide focal point for employer-driven workforce training initiatives.

The first and immediate objective that MACWIC undertook was to create an industry-led skills certification standard that could provide a basic entry level instruction set and evaluation process that would enable employers to readily understand the skill set of the job applicant, reducing the cost of hire. The second objective undertaken was to "catalyze the talent pipe line," which meant implementing the skills certification process within the Vocational Technical High School System.

The Massachusetts Department of Elementary and Secondary Education included the MACWIC Certification in its Vocational Technical Education Framework, which has been readily endorsed across the state.

The MACWIC certification process has been well received by schools.

"The MACWIC Testing has provided our Precision Machining/CNC program with great feedback for determining where gaps in skill levels exist and where improvements can be made. A direct correlation between the MACWIC curriculum and the testing, and the ongoing feedback from industry allows us to ensure our delivery of instruction reflects the immediate needs of industry, as industry is the driving force behind the development and maintaining of MACWIC testing and curriculum," said a vocational teacher in Worcester.

Manufacturing is growing in Massachusetts. Seventy percent of manufacturing firms are forecasting expansion that offers a tremendous opportunity for skilled workers. Now, it’s up to us to make sure they have the skills to seize that opportunity.

Employers Encouraged as Governor Announces 'Workforce Skills Cabinet'

Posted by Katie Holahan on Feb 26, 2015 2:26:00 PM

The cornerstone recommendation of the new Associated Industries of Massachusetts long-term economic plan, Blueprint for the Next Century, is for “business and government to develop the best system in the world for educating and training workers with the skills needed to allow Massachusetts companies to succeed in a rapidly changing global economy.”

EducationNo surprise, then, that employers are encouraged by Governor Charlie Baker’s announcement this morning that he will create a “Workforce Skills Cabinet” to ensure that citizens have the skills and education needed by Massachusetts companies.

The cabinet will consult with individuals, businesses, government agencies and community-based organizations to identify ways to improve work force skills, job readiness and vocational education opportunities. Recommendations will take into account the differing economic and demographic needs of each region, from the Berkshires to the Boston-Cambridge technology nexus.

“A talented workforce and growing economy are inseparable and Massachusetts has an opportunity to capitalize on both by ensuring our workers have the skills to meet the needs of employers in the 21st century economy,” Baker said in a statement.

“The different regions that make up Massachusetts will require dynamic strategies to address the work force skills gap, but by increasing our communication and coordination, we can prepare individuals across the Commonwealth for the family-sustaining jobs of the future.”

Secretary of Labor and Workforce Development Ronald Walker will chair the Workforce Skills Cabinet, which will also include Secretary of Education James Peyser and Housing and Economic Development Secretary Jay Ash.

The inability to locate and hire skilled employees was by far the top concern expressed by Massachusetts employers last year as AIM developed the Blueprint for the Next Century to mark the organization’s centennial. The skills issue crosses almost every industry, from manufacturers in the Pioneer Valley to software companies in Boston’s Innovation District to research and engineering firms on the North Shore.

Among the suggestions that AIM makes to address the skills gap are:

  • Take advantage of the opportunity provided by the Work Force Innovation and Opportunity Act of 2014 to align the commonwealth’s work-force training programs with the needs of employers and job seekers. The act requires Massachusetts to develop a four-year strategy — in the form of a single, unified strategic plan for core programs — for preparing an educated and skilled work force and meeting the hiring needs of employers. 
  • Employers, government and citizens must together elevate the role of vocational education and its potential to provide people the skills they need to realize their economic dreams.
  • Conduct a comprehensive best-practices audit to determine the best approaches to work-force training being used in other states and countries.
  • Expand performance-based funding for Massachusetts community colleges and public four-year institutions.
  • Global companies with a significant presence in Massachusetts should establish partnerships that harness the intellectual capital of the region’s colleges and universities. State government should consider modest financial incentives to encourage such partnerships.
  • Employers must establish a consistent level of engagement with educational institutions and training providers to ensure a pool of skilled potential employees.

We look forward to the Workforce Skills Cabinet adding its own proposals to the debate.

AIM members who have ideas about how to improve the state’s work force development infrastructure are encouraged to contact me at keh@aimnet.org

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