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2020 Will Be An Important Year for International Trade

Posted by Kristen Rupert on Jan 17, 2020 12:38:08 PM

The year 2020 is shaping up to be a big one for international trade - China, USMCA, Brexit, US-Europe trade, tariffs and more.  Here’s what AIM is following:

international.flagssmallChina

China is a critical source of components, raw materials, semi-finished and final products for many US companies.  China’s 1.4 billion people, many of whom are entering the middle class, are an attractive and growing market for US products and services.

The US-China trade relationship has been strained for nearly two years with tariffs, counter-tariffs and rhetoric dominating the news.  This week’s signing of a US-China Phase 1 trade deal represents progress, as the Chinese committed to $200 billion in purchases of US manufacturing, agriculture, energy and services.

China also promised stronger protection for intellectual property, trade secrets and more.  Tariffs remain in place.  Many experts question whether China will actually make all the US purchases to which it has committed.

USMCA

Canada and Mexico purchase more US-made goods than the next 11 trading partner countries combined.

This critical trade agreement, which will replace the North American Free Trade Agreement (NAFTA) is at the finish line.  The US House of Representatives, including six of nine Massachusetts House members, voted in December to pass USMCA.  The US Senate voted “yes” this week.

The President will sign the agreement this week, and Canada is expected to sign shortly (Mexico has already done so.)  The USMCA strengthens and modernizes NAFTA and sets new standards for environmental protections, labor and intellectual property.

BREXIT, US-UK and US-EU Trade Agreements

The United Kingdom will leave the European Union on January 31 but will remain in the EU customs union and single market until Dec. 31.  By that time the UK and EU will have negotiated a new bilateral trade agreement.

The US and UK are beginning the process of developing their own bilateral trade agreement.  The US is the UK’s largest single trading partner.

And the UK has long been a vital market for the US and for Massachusetts. In 2019, Massachusetts-UK trade totaled more than $4.3 billion.  The EU and US are also in talks to negotiate a bilateral agreement. 

The EU-US trade relationship, with 28 EU countries doing business with the US, is the largest in the world.    

Tariffs

The US began putting tariffs in place in 2018 on solar panels, washing machines, steel and aluminum. 

The levying of tariffs on additional products, from various countries, has continued for two years and is unlikely to stop.  At present the US tariffs nearly all imports from China, at levels ranging from 10 percent to 25 percent.

China has retaliated with its own tariffs.  This past fall, the US began to tariff products from Europe—cheeses, wines, whiskey, olives, airplanes and more—as a result of a WTO ruling that Europe unfairly subsidized Airbus (airplane) production.  What to watch: will the US increase some EU tariffs to 100 percent?  Will the US put tariffs on European autos?  Will China tariffs change significantly?   

WTO

The World Trade Organization, headquartered in Switzerland, with 164 member countries, helps regulate trade between countries and features a dispute resolution process that enforces adherence to trade agreements.

When the WTO finds that a member has suffered as a result of another country’s trade activities, the negatively affected country may issue retaliatory tariffs.  The US has won most of its WTO cases. 

However, the Trump administration believes the WTO must be overhauled and has blocked the appointment of new members to the appellate body that reviews cases.  With the appellate panel now essentially disbanded, there’s no official path to resolving global trade disputes.

Although imperfect, the WTO plays a vital role in ensuring stability and fairness in world trade.  One political leader said recently, “If the WTO did not exist, we’d need to invent it.”  WTO’s future is uncertain.

New Tech Regulations

The US Treasury Department recently issued regulations related to foreign investment and national security.  These take effect in mid-February and address concerns about investment from foreign entities in “U.S. businesses involved in critical technology, critical infrastructure, or sensitive personal data.”

More information may be found at https://home.treasury.gov/news/press-releases/sm872.

In addition, the US Department of Commerce has proposed a new Supply Chain Executive Order and proposed rule “to strengthen and secure the Information and Communications Technology and Services Supply Chain.”  This rule would establish regulations to “mitigate, prohibit and unwind” certain technology-related transactions.

US Manufacturing Trends

US manufacturing had a down year in 2019 according to multiple economic indicators.  Uncertainty around tariffs, increased costs of raw materials, a global economic slowdown and other factors affected business confidence and companies’ willingness to make capital investments.

However, some trade experts anticipate healthy growth in manufacturing in 2020.  Companies long dependent on China supply chains have been making adjustments and moving some production to countries not subject to US tariffs.  The monthly AIM Business Confidence Index measures several indicators, including manufacturer confidence, which saw an uptick in December.  

Massport

The Massachusetts Port Authority continues to be a significant economic driver.

Massport is adding new international gates at Logan Airport to manage the growing number of international travelers.  Airlines, particularly JetBlue and Delta, are making significant investments at Logan.

At the Port of Boston, Conley Terminal continues a four-year pattern of record-breaking container volume.  Flynn Cruiseport has seen an increase in the number of ships calling and passengers traveling.  And the Autoport in Charlestown processes more than 80,000 vehicles annually.

The Boston Harbor dredging project, funded by the federal government and the commonwealth, will enable new, larger container ships to utilize the Port of Boston by 2021.  Massport is investing in Port operations to increase efficiency.  More than 1600 companies across New England rely on the Port to connect to the global economy, and Massport hopes to entice more export and import firms to use the Port.    

Topics: International Trade, AIM International Business Council

Employers Ring Out 2019 on Confident Note

Posted by Christopher Geehern on Jan 14, 2020 8:00:00 AM

Massachusetts employers rang out 2019 on an optimistic note as business confidence rose to its highest level in 15 months.

BCI.December.2019The Associated Industries of Massachusetts Business Confidence Index (BCI) gained 1.6 points to 62.2 last month, leaving it comfortably within optimistic territory 3.6 points higher than a year ago.

The strong year-end results were driven by brightening views of the US economy and an increasingly bullish outlook among Bay State manufacturers.

The results came during a month when the US economy created 145,000 jobs to cap a decade of steady payroll gains that marked the longest growth period in 80 years of record-keeping. December also saw an easing of the international trade tensions that disquieted employers for much of 2019.

“Business confidence remained steady and strong throughout 2019 as employers saw underlying strength in the economy through sometimes distracting political uncertainties,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA).

The AIM Index, based on a survey of more than 100 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.

The Index has remained above 50 since October 2013.

Constituent Indicators

The constituent indicators that make up the Business Confidence Index moved mostly higher in December.
The US Index assessing business conditions nationally surged 3.6 points during the month and 7.7 points for the year to 62.8. The Massachusetts Index lost 1.8 points in December but remained higher than the national reading at 65.2

The Future Index, measuring expectations for six months out, gained 2.1 points to 61.6, leaving it 4.3 points higher than a year ago. The Current Index, which assesses overall business conditions at the time of the survey, rose 1.1 points to 62.8, an increase of 2.8 points over 12 months.

The Employment Index was up 0.9 points in December and 1.0 points for all of 2019 amid a persistent shortage of workers that may become worse as large number of baby boomers retire.

Non-manufacturers (63.2) were slightly more confident than manufacturing companies (61.4). Large companies (65.2) were more optimistic than small (61.7) or medium-sized (60.5) companies. Companies in Eastern Massachusetts (62.7) remained more optimistic than those in the west (61.6).

Sara L. Johnson, Executive Director of Global Economics at IHS Markit and a BEA member, said global economic growth appears to be stabilizing, supported by fiscal and monetary stimulus in the United States, China, Western Europe, and Japan.

“After slowing from 3.2 percent in 2018 to 2.6 percent in 2019, global real GDP growth is projected to hold steady in 2020. The ratcheting down of trade tensions, progress on the US-Mexico-Canada Agreement, favorable financial market conditions, and resilient consumer spending contributed to a sense of stability at the close of 2019,” Johnson said.

Pending Issues

AIM President and CEO John R. Regan, also BEA member, said employers face an eventful 2020 as state policymakers wrestle with major issues such as transportation financing, health reform and the implementation of paid family and medical leave.

“The Baker administration and the Massachusetts Legislature have done a commendable job managing the state budget while maintaining an environment of economic growth. The decision to allow the MassHealth employer assessment to sunset indicates that lawmakers understand that overburdening business will ultimately constrict economic opportunity,” Regan said.

Topics: AIM Business Confidence Index, Massachusetts economy, Massachusetts employers

Wage Increases in Massachusetts Lag National Pace

Posted by Gretchen Harrison on Jan 13, 2020 8:00:00 AM

Massachusetts employers project lower wage and salary increases, a consistent level of recruitment activity, and moderating health-insurance premium increases for 2020 after navigating a solid but volatile economy during 2019.

HR.Practices2The 2020 AIM HR Practices Report published today shows that companies project a 2.77 percent salary increase budget for 2020, consistent with the 2.71 percent actual increase reported for 2019 but down from 2.86 reported in the 2018 HR Practices survey.

Meanwhile, national salary increase projections for 2020 have increased slightly from the prior year to 3.3 percent. Salary increase trends in Massachusetts have tended to lag national numbers in recent years and the gap has begun to widen.

How does a state with a 2.9 percent unemployment rate, a persistent shortage of skilled workers and an impending demographic cliff show slower wage growth than the rest of the nation?

Survey data suggest:

  • Escalating regulatory costs (minimum wage) and non-wage compensation costs (paid family and medical leave; health insurance) are making employers cautious about increasing pay. Companies generally have a set compensation budget, so increases in these ancillary costs may put downward pressure on wages.
  • The Massachusetts Equal Pay Act may be limiting the degree to which employers are able to offer compensation incentives to “superstar” job candidates.

Members of the AIM Board of Economic Advisers offer additional explanations:

  • Wages are already much higher than the national average in Massachusetts, meaning that increases represent a smaller percentage of total wages.
  • Massachusetts is aging fast. Older workers are at a steadier place in their careers and see slower wage growth. As they retire, they are replaced by less expensive younger workers. This is a natural drag on overall wage growth.
  • The higher-skill workers who dominate the Massachusetts economy get a significant portion of their compensation in non-wage forms like bonuses, commissions and stock options. Projected recruitment activity for 2020 is expected to be comparable with actual recruitment experienced in 2019, which saw a significant increase over 2018 volumes.

The wage and salary increase projections come as unemployment in Massachusetts remains at record low levels. And while the state economy contracted by 0.2 percent during the third quarter, analysts say the downturn does not appear to indicate the beginning of a recession, but rather the capacity limits against which the state is bumping.

These include the barriers to labor force growth presented by an aging population as the departure of baby boomers from the regional workforce continues.

Download the HR Practices Report

Topics: Massachusetts economy, Human Resources, wages

Fiduciary Rule Would Have Unintended Consequences

Posted by Brad MacDougall on Jan 8, 2020 3:44:10 PM

Thomson.Fiduciary

Brooke Thomson, left, Executive Vice President of Government Affairs at AIM, testifies at a hearing on a proposed “Conduct Standard for Broker-Dealers, Agents, Investment Advisors, and Investment Advisor Representatives impacting the state’s fiduciary conduct standards”

AIM yesterday urged Massachusetts Secretary of State to delay implementation of rules that would require securities brokers to meet fiduciary conduct standards.

“We wish to reiterate our serious concerns regarding this proposal and urge that you delay issuing a final rule making until implementation and evaluation of the Securities and Exchange Commission’s Regulation Best Interest (Reg BI). We believe that the proposal is unworkable and could have negative implications for those the proposed rule seeks to protect among other negative impacts to the Massachusetts economy,” AIM Executive Vice President of Government Affairs Brooke Thomson told a public hearing on the issue.

The SEC adopted Reg BI on June 5, 2019, to create a uniform and thoughtful approach to raising the standard of care for broker-dealers while maintaining choice and access for all investors. Reg BI substantially raises the bar from existing suitability standards and adds meaningful new investor protections. It provides significant and material changes to the way brokerage services will be provided and impacts nearly every aspect of a broker-dealer’s operations.

“We would strongly encourage Massachusetts to allow Reg BI to be fully implemented before moving forward with a state-specific fiduciary rule. We believe that once Reg BI is fully operational and the Division and other regulators begin examining for compliance, the Division will find that Massachusetts investors are receiving substantial additional protections while continuing to have access to the numerous choices and opportunities that they have today,” Thomson said.

AIM submitted comments regarding the Secretary of State William Galvin’s preliminary proposal in July 2019.

AIM supports strong and efficient regulation of financial services to ensure a balanced regulatory regime for the industry and investors. These goals, however, cannot be achieved on a state-by-state basis through a patchwork of conflicting state regulations that differ materially with respect to one another as well as to federal regulations.

We are concerned that the Massachusetts proposal will have several unintended consequences, including higher costs for investors, less access to investment options, investor confusion, compliance challenges, and unnecessary costs for state and local government entities.

The impending impact of Reg BI is significant for both businesses and investors. The implementation process will be critical for the industry, investors, and states to achieve new compliance thresholds. The SEC has publicly stated that it will take this time and has committed resources to seek feedback from the public on how to implement the new rule.

We would also observe the following regarding the proposed fiduciary conduct standard and why Massachusetts should allow Reg BI to be fully implemented before proceeding with any rule making:

  • The Proposal would result in higher fees, less access to brokerage services, and does not address cross-border issues. It creates great risk of errors and confusion, along with gaps in advice due to inconsistencies between state and federal rules. Broker-dealers could be prohibited from providing any advice regarding Individual Retirement Accounts (IRAs).
  • The Proposal could significantly disrupt the state’s bond market and underwriting process, leading to new costs for governmental entities. As drafted, broker-dealers are required to “avoid conflicts of interest,” which include principal transactions, the process by which a broker-dealer will buy a security from, or sell a security to, the account of a client. This is a frequently used process that controls costs for clients because the broker-dealer does not have to rely on a secondary market to make a transaction. If principal transactions are considered a conflict of interest, financial services firms may be forced to withdraw from the underwriting process or sell bonds in the secondary market.
  • The Proposal creates several problematic conflicts with federal law, such as the Employee Retirement Income Security Act of 1974 (“ERISA”), in addition to new duties and standards creating confusion in the industry and disrupting investor access to transaction-based financial services. Different standards would significantly increase cost and may either make services unaffordable for some Massachusetts small businesses and residents or require financial institutions to limit or eliminate the availability of their services to a variety of Massachusetts small businesses and residents seeking access to investment and retirement services.
  • The Proposal does not consider Executive Order “EO” 562, to reduce unnecessary regulatory burden. EO 562 invited state and Constitutional officers not covered by the Executive branch to review regulations in light of several factors, especially rules that exceed federal law and rules that may have an “unduly and adverse” impact on citizens and customers of the Commonwealth. We would urge that this proposal be reviewed in light of EO 562 especially Section 3

We believe that investors in Massachusetts would be better served by coordinated and complementary Federal and state regulation than by protracted litigation resulting from over-broad state regulations. We request the Massachusetts Securities Division wait to evaluate the SEC’s Reg BI before proceeding with any rule making.

Please contact Brad MacDougall, Vice President of Government Affairs, bmacdougall@aimnet.org

Topics: Taxation

NLRB Remakes Workplace by Reversing Obama-Era Decisions

Posted by Michael Rudman on Jan 7, 2020 10:30:00 AM

The National Labor Relations Board (NLRB) under President Donald Trump is remaking the American workplace by methodically undoing key pro-union rulings the board made under former President Barack Obama.

organizedlaborgoodsmallThe rapid reversal in many ways underscores the increasing polarization of the national political debate and the whiplash that employers and unions alike face every time the White House changes hands.

The NLRB, created by the National Labor Relations Act in 1935, is comprised of five members, all appointed by the president.  The chair and two members of the board are traditionally from the president's party. The remaining two members are from the opposition party.

Republican John Ring currently serves as NLRB chair. The other two Republicans on the board are Marvin Kaplan and William Emanuel.  One Democrat seat on the board is vacant and the other is held by Lauren McFerran since December 2017.

NLRB rulings traditionally vacillated from one administration to another in relatively narrow range, reflecting either a pro-employee or pro-employer bias.  The limits began to widen significantly during the Obama-era NLRB as a series of decisions and rule-making initiatives significantly tilted the playing field in favor of expeditious union organizing.

But the new board has issued a steady series of rulings that have effectively undone the Obama-era edicts.  The highlights of these changes include:

Joint Employer Status

Organized labor has long sought to establish a joint employer relationship between franchisors and franchisees.  The reason is simple - locally owned franchisees may not have deep pockets, but parent organizations usually do.  In its long-awaited McDonalds decision, the new board clearly found that the franchisor is not a joint employer with its franchisees.  While final rule making hasn’t been issued in this regard, it is clear franchisors can breathe a sigh of relief.

Micro-Unions

The prior board in its Specialty Healthcare decision made it easy for unions to isolate small, easier-to- organize groups of employees.  The new board has reverted to a broader “community of interest” standard and a clear, three-part test (Boeing Company).  

Workplace Investigations

In a prior decision (Banner Estrella), the board prohibited employers from requiring employees to keep workplace investigations confidential.  The new board has overturned that ruling (Apogee Retail) and provides a more common-sense approach to workplace investigations.

Quickie Elections

The prior board’s rule making in 2014 had the effect of accelerating the union organizing process and hindering employer response to union activity.  The new board rule making: (1) increases most time frames and deadlines by a factor of two; (2) requires that ballots be automatically impounded upon challenge; and (3) allows challenges up front, prior to voting, versus the 2014 approach of ‘let everyone participate and we’ll sort it out later.’

Employer Email

As a result of the NLRB’s 2014 Purple Communications decision, employers could not prohibit employees from accessing company email for union-related communications.  The new board (Caesar’s Entertainment) restores employer rights to prohibit use of its email systems for non-business purposes.

While these rulings are good news for employers, they don’t eliminate the prospect of employees seeking third-party representation.  Fair and equitable treatment of employees, employing supervisors who know how to lead (not manage) and effective workplace communications are the employer’s best tools in making unions unnecessary.

Register for Labor Relations Primer Webinar

 

Topics: Unions, National Labor Relations Board

State Congressional Delegation Backs Trade Deal

Posted by Kristen Rupert on Dec 23, 2019 10:15:25 AM

A majority of Massachusetts members of the US House of Representatives voted last week to approve the United States-Mexico-Canada (USMCA) trade agreement that has been strongly supported by AIM and other business groups.

Members of the Massachusetts delegation voting in favor included US Reps. Richard Neal, Stephen Lynch, Katherine Clark, William Keating, Seth Moulton and Lori Trahan. The US Senate is expected to take up USMCA in early 2020. 

The USMCA was negotiated by the Trump Administration to replace the North American Free Trade Agreement (NAFTA). USMCA strengthens and modernizes some intellectual property rules, sets new digital economy standards, expands US manufacturers’ access to Canada and Mexico, ensures that US companies can sell their products duty-free into these markets, eliminates red tape at the border, and levels the playing field by raising standards, prohibiting anti-US discrimination, and strengthening enforcement. 

Canada and Mexico purchase more US-made goods than the next 11 trading partner countries combined. USMCA will help to preserve more than 2 million American manufacturing jobs - at least 15,000 of them in Massachusetts - that rely on trade with Canada and Mexico.

AIM and its 3,500 member employers commend those members of the Congressional delegation who voted for USMCA.

Topics: International Trade, U.S. Congress

Massachusetts Makes Progress on Climate Change

Posted by Robert Rio on Dec 12, 2019 9:14:21 AM

The climate protesters who took to the streets of Boston last week targeted the wrong people.

bostonatnightIf these people really want to impact the climate debate, they should turn their attention outside of a state that is already well on its way to achieving the goals outlined during demonstrations at the State House.

Massachusetts has had a law on the books for more than a decade that mandates an 80 percent reduction in carbon emissions from all sectors (electric generation, transportation and buildings) by 2050. Admittedly that isn’t 100 percent but worrying about whether Massachusetts meets 80 percent or 100 percent misses the larger picture.

There are separate regulations aimed at carbon reduction as well. State policy requires that 80 percent of electricity be generated using carbon free sources by 2050. And new proposed regulations by the Massachusetts Department of Environmental Protection will move that requirement to nearly 100 percent during the same time frame. AIM supports the proposed regulations.

The Baker administration has already finalized contracts for one offshore wind farm and other one is going through the approval process. These developments will leave the region humming with new turbines.

Additionally, a large hydro power project is being routed through Maine to supply about 18 percent of the Massachusetts’ total power. Without hydro power, our transition to carbon-free energy will be delayed for decades because it would take an enormous amount of additional solar or offshore wind to make up for the loss of carbon-free hydro power.

That leaves transportation – which accounts for the largest portion of greenhouse gas emissions - 45 percent and growing.

Governor Baker has been a leader in addressing transportation-based greenhouse gasses and is a visible backer a 12-state (plus the District of Columbia) regional effort to reduce greenhouse gases in the transportation sector known as the Transportation and Climate Initiative (TCI). AIM has joined with the administration and several environmental groups to support this effort and the governor is always looking for more support.

TCI will establish a regional cap on carbon emissions while auctioning emissions allowances. Proceeds from the TCI fee will be sent back to each participating state improve statewide public transportation and to encourage fuel users to purchase alternative vehicles.

A MassINC poll published yesterday found that a majority of registered voters in Massachusetts, Connecticut, Maryland, New York, New Jersey, Pennsylvania and Virginia strongly or somewhat support their home state's participation in TCI.

Some states are balking at joining TCI. Perhaps the Boston climate activists could take their message to other state capitals to ensure that this critical multi-state effort gets off the ground.

Declaring victory and moving on is tough, but it is necessary to move on from Massachusetts and concentrate efforts in those areas where the greatest changes should be made. There is lots of commonality. The 3,500 member employers of AIM support national efforts to mitigate climate change.

The best thing for all of us to do is acknowledge our work favorably and let the rest of the nation know it can be done with the right leadership.

Topics: Environment, Energy, Transportation

Business Confidence Steady as Economy Remains Solid

Posted by Christopher Geehern on Dec 10, 2019 7:38:12 AM

The Thanksgiving holiday left Massachusetts employers in a good but cautious mood as business confidence remained steady during November.

BCI.November.2019The Associated Industries of Massachusetts Business Confidence Index (BCI) lost 0.3 points to 60.6 last month, leaving it one point lower than its level of a year ago but three points higher than in January.

The results came during a month when the Massachusetts unemployment rate remained at an historic low of 2.9 percent and employers nationally created a stronger-than-expected 266,000 new jobs. Employers also spent the month trying to make sense of the on-again, off-again trade war with China.

The US economy grew at a deliberate 1.9 percent pace during the third quarter, while the Massachusetts economy contracted by 0.2 percent as employers began to bump up against labor-force constraints.

“The AIM Business Confidence Index has drifted up and down amid a swirl of economic and political uncertainties during 2019, but employers have remained consistently optimistic about their overall prospects,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA).

The AIM Index, based on a survey of more than 100 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.

The Index has remained above 50 since October 2013.

Constituent Indicators

The constituent indicators that make up the Business Confidence Index all moved in a narrow range during November.

The Massachusetts Index assessing business conditions within the commonwealth lost 0.8 points to 67.0 while the US Index declined 0.4 points to 59.2. The Massachusetts Index is virtually even with its level of a year ago; the US index has dropped 4.5 points during the past 12 months.

The Future Index, measuring expectations for six months out, gained 0.9 points to 59.5 after surging during October. The Current Index, which assesses overall business conditions at the time of the survey, fell 1.6 points to 61.7, almost a point lower than a year ago.

The Employment Index remained even for the month, leaving it 1.3 points higher for the year, underscoring the capacity issues faced by employers struggling to find qualified workers in a full-employment state economy.

Non-manufacturers (62.2) were slightly more confident than manufacturing companies (59.3), which have been most directly affected by uncertainty surrounding trade policy. Medium-sized companies (61.2) were more optimistic than large companies (60.8) or small companies (59.2). Companies in Eastern Massachusetts (61.2) remained more optimistic than those in the west (59.8).

Barry Bluestone, retired Professor of Public Policy and Urban Affairs at Northeastern University and a BEA member, said Massachusetts policymakers appear ready to address issues such as housing and transportation that will affect the ability of the commonwealth to attract and retain skilled workers.

“The economic future of Massachusetts rests with highly educated and highly skilled people who will maintain the commonwealth’s status as a global center of economic growth and innovation. But those people will not put down roots here if they can’t afford housing or navigate their way to work,” Bluestone said.

The Moderate Middle

AIM President and CEO John R. Regan, also BEA member, said political leaders in Massachusetts continue to show a willingness to collaborate on critical economic problems. He noted that the Baker Administration and the Legislature worked together in November to pass a landmark $1.5 billion public-school funding reform that contained accountability measures sought by business.

“The partisan polarization that characterizes much of our political debate misses the fact that there is a moderate middle in America seeking action on important issues. A study from New Center shows that 43 percent of Americans classify themselves in the political center, compared with 34 percent for the right and 23 percent for the left,” Regan said.

“The results make us optimistic that bipartisan cooperation will continue in Massachusetts on issues such as transportation, health costs and taxation.”
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Topics: AIM Business Confidence Index, Massachusetts economy, Massachusetts employers

A Model Policy for the New Distracted-Driving Law

Posted by Tom Jones on Dec 4, 2019 8:00:00 AM

Gov. Charlie Baker signed An Act Requiring the Hands-Free Use of Mobile Telephones While Driving on November 25. The law takes effect 90 days from the date of the governor’s signature.

Cell Phone in CarThe law may have a significant impact on companies with employees who are on the road with a need to communicate with the home office or customers.

The law does not focus solely on telephones but on "electronic devices." While the statute does not define an electronic device, the presumption will be that any iPhone, smart phone, tablet, GPS system or other electronic gadget that someone may use in a vehicle will be subject to this law.

Violators face new penalties that may include fines, remedial education and insurance premium surcharges.

The law defines hands-free mode to mean that a user engages in a voice communication or receives audio without touching or holding the device. The measure permits drivers to execute a single tap or swipe to activate, deactivate or initiate the hands-free mode feature.

What’s prohibited?

  • No operator of a motor vehicle shall hold a mobile electronic device.
  • No operator of a motor vehicle shall use a mobile electronic device unless the device is being used in hands-free mode.
  • No operator of a motor vehicle shall read or view text, images or video displayed on a mobile electronic device.

What’s permitted?

  • An operator may view a map generated by a navigation system or application on a mobile electronic device that is mounted on or affixed to a vehicle’s windshield, dashboard or center console in a manner that does not impede the operation of the motor vehicle.
  • An operator shall not be considered to be operating a motor vehicle if the vehicle is stationary and not located in a part of the public way intended for travel by a motor vehicle or bicycle.

The law provides for limited exceptions such as the use of a mobile electronic device in response to an emergency. The law defines an emergency as when the vehicle’s operator needed to report that:

  • the vehicle was disabled;
  • medical attention or assistance was required;
  • police intervention, fire department or other emergency services were necessary for the personal safety of the operator or a passenger or to otherwise ensure the safety of the public; or
  • a disabled vehicle or an accident was present on a roadway.

Repeat offenders will face some of the biggest phone bills they have ever seen. The law provides for three levels of fines, remedial education and insurance surcharges.

The fines under this statute are progressive in nature:

  • first offense-$100
  • second offense-$250; and
  • third and subsequent offenses-$500.

An operator who commits a second or subsequent offense shall be required to complete a program selected by the registrar of motor vehicles that encourages a change in driver behavior and attitude about distracted driving. It is likely that if there is any fee associated with attending this class, the cost will be borne by the employee.

The law also provides that if a person commits a third or subsequent offense it will be a surchargeable event against the driver’s insurance.

An operator found to be violating the law the first time will receive a warning up until March 31, 2020. After that, the law will be fully effective.

AIM HR Solutions has developed a model policy for member companies to use. It is available to all handbook subscription service members as part of their annual policy program. Other AIM members interested in receiving a copy of the policy should contact Beth Yohai or Kyle Pardo at 617.262.1180 for more information on the cost of the policy.

AIM members with questions about this or any other HR-related issue may call the AIM Employer Hotline at 1-800-470-6277.

Topics: Employment Law, Transportation

What Is TCI and How Will It Help Improve Transportation?

Posted by Bob Rio on Dec 2, 2019 8:00:00 AM

Massachusetts lawmakers continue to debate the best method of paying to repair and upgrade the state’s overburdened transportation system.

trafficsmallAssociated Industries of Massachusetts and its 3,500 member employers oppose widespread calls to raise the gasoline tax. AIM instead favors a gasoline-fee increase through a nascent multi-state regional cap-and-invest program called the Transportation and Climate Initiative (TCI).

What is TCI and why is it better than a gas tax?

TCI establishes a regional (currently 12 states plus the District of Columbia) cap on carbon emissions while auctioning emissions allowances. Proceeds from the TCI fee would be sent back to each participating state to incent fuel users not to pay the TCI fee. A gas tax, by contrast, often generates revenue for transportation projects that may not reduce greenhouse gas emissions.

Think of TCI as an energy efficiency program for transportation.

Massachusetts has maintained a successful energy efficiency initiative during the past decade for the electric generation and building sectors. Many AIM members have been able to utilize generous incentives to install solar panels or perform energy efficiency upgrades. The electric generation sector is on track to be virtually carbon free by 2050.

Energy efficiency has been a key result of the Global Warming Solutions Act (GWSA) signed by Governor Deval Patrick in 2008. GWSA requires an 80 percent reduction in carbon emissions from all sectors of the Massachusetts economy – electric generation, buildings (businesses and residential), and transportation.

Transportation is now the largest generator of carbon emissions, producing nearly 45 percent of the total and increasing as other sectors decrease. The only option for reducing greenhouse gases in the transportation sector is either to ban cars or switch to low-carbon transportation alternatives, including electric vehicles and better and more accessible public transit.

TCI will do this by allowing states to develop programs that encourage the purchase of electric and low-carbon emissions vehicles (fleets, buses, and passenger vehicles and rail) and upgrades to the electric-charging infrastructure. It will also stimulate investments in public transportation (including much-ignored areas outside Boston).

How much will TCI add to the price of a gallon of fuel? The best guess is about 10 cents per gallon, but it’s hard to estimate because prices under TCI will be set at a private auction that won’t begin until 2021 or 2022. The TCI region will establish an overall cap on carbon emissions - there is no set amount as a per-gallon fee.

A gas tax is regressive and anti-competitive since it falls most heavily on people outside developed urban areas who have no option other than to drive. Gas-tax increases drive consumers over the border for cheaper fuel. And it raises money that the Baker administration says the commonwealth does not need now.

If your company uses large amounts of gasoline or diesel fuel, a gas tax or TCI fee could harm you. But you are also the perfect customer for rebates using TCI funds because the programs can make it cost effective to purchase a low- or no-carbon vehicle, just like programs that make it cost-effective to install solar energy or install new equipment.

Governor Charlie Baker, Secretary of Transportation Stephanie Pollack and Secretary of Energy and Environment Katie Theoharides plan to lead a briefing for senior business executives on TCI on December 11 in Boston. CEOs interested in attending should contact AIM for more information.

AIM will work throughout the process to make sure that the right incentives and programs are implemented that will save money for drivers and companies that switch to electric vehicles while reducing greenhouse gases in the transportation sector as the law requires. Those are all things a gas tax won’t do.

Topics: Environment, Sustainability, Transportation

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