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Christopher Geehern

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Employer Confidence Stabilizes in June

Posted by Christopher Geehern on Jul 9, 2019 8:46:46 AM

Employer confidence stabilized in Massachusetts during June despite a continued swirl of conflicting economic and political signals around the globe.

BCI.June.2019The Associated Industries of Massachusetts Business Confidence Index (BCI) rose 0.5 points to 57.6 last month, rebounding from a May drop that left it at its lowest level since October 2016.

The Index has declined 3.7 points since June 2018 but remains within optimistic territory. And though confidence levels are virtually unchanged since January, the AIM Index reflects constantly changing headlines about international trade, economic growth and the direction of interest rates.

“We’re seeing confidence go up one month and down the next in the same way that financial markets have been whipsawed by almost daily changes in the economic outlook,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.

“Employers remain concerned about the prospect of an economic slowdown but were encouraged at the end of June by larger-than-expected job growth numbers, signs of a thaw in the US/China trade battle and signals that the Federal Reserve might ease interest rates.”

Tariffs continue to influence employer confidence.

“Have seen cost increases for construction materials due to the effect of tariffs. This is creating some uncertainty in the pricing of new construction projects,” one member wrote.

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.

The Index has remained above 50 since October 2013.

Constituent Indicators

The constituent indicators that make up the AIM BCI were mixed during June.

The Massachusetts Index assessing business conditions within the commonwealth rose 0.3 points to 61.2 while the US Index rose a full 3 points to 58.0. The Massachusetts reading has declined 1.6 points during the past 12 months and the US reading has dropped 2.0 points during the same period.

The Future Index, measuring expectations for six months out, rose slightly, 0.2 points to 56.2. The Current Index, which assesses overall business conditions at the time of the survey, gained 0.8 points to 59.0, 4.5 points lower than a year ago.

The Employment Index declined 0.4 points for the month and 2.2 percent for 12 months. Analysts say employers continue to struggle to find qualified workers in a state economy with a 2.9 percent jobless rate.

Non-manufacturers (60.1) were more confident than manufacturers (54.4), who have seen their confidence levels drop 8.1 percent since June 2018. Large companies (59.0) were more confident than small companies (58.4) or medium-sized companies (55.6). Companies in Eastern Massachusetts (58.5) continued to be more optimistic than those in the west (56.3).

Elliot Winer, Chief Economist, Winer Economic Consulting, LLC, and a BEA member, said continuing weakness in the Company Index, Manufacturing Index and Employment Index underscores some of the long-term challenges facing Massachusetts employers beyond the day-to-day headlines.

“Hiring and retaining skilled employees is becoming a barrier to expansion for some companies. The short-term issues affecting confidence will eventually be overshadowed by the long-term demographics of having large numbers of baby boomers leave the work force,” Winer said.

State Policy Gains

AIM President and CEO John R. Regan, also BEA member, said that Governor Charlie Baker and the Massachusetts Legislature have made several decisions recently that boosted employer confidence. Those decisions included postponing the start of contributions for paid family leave and allowing the MassHealth assessment to lapse as scheduled in December.

“Employer have been encouraged by the willingness of state policymakers to meet businesses halfway on some of these complex issues,” Regan said.

“Our hope is that lawmakers will continue this mindful approach to the economy.”

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

Income Surtax Would Drive Out Employers, Revenue

Posted by Christopher Geehern on Jun 11, 2019 1:41:59 PM

StateMigration

 

As Massachusetts lawmakers gather tomorrow for another attempt to impose a massive income surtax on family business, a new analysis by Bloomberg news demonstrates the devastating impact of tax increases on economic activity.

Data from the Internal Revenue Service and the Census Bureau shows that business owners and entrepreneurs are heading for the exits in high-tax states and bringing their income to states such as Florida and South Carolina.

Bloomberg found that Connecticut, New York and New Jersey face the largest financial drains from the 5 million Americans who move from one state to another each year. Connecticut lost the equivalent of 1.6 percent of its adjusted gross income, according to Bloomberg, because the people who moved out of the Nutmeg state had incomes that were 26 percent more, on average, than those people who moved in.

Moreover, “leavers” outnumbers “stayers” by a five-to-four margin.

Massachusetts suffered a net loss of $1.4 billion in adjusted gross revenue from people moving in and out of the commonwealth. New York lost $8.4 billion and New Jersey, which recently adopted its own version of the so-called Millionaires Tax, lost $3.4 billion.

Florida posted a net income influx of nearly 3 percent of the state’s adjusted gross income in 2016. South Carolina, Idaho and Oregon were also among the largest gainers in the interstate shuffle, according to Bloomberg.

“The income surtax constitutional amendment to be debated tomorrow takes direct aim at owners of small and family owned business in Massachusetts. That sort of unfair tax would clearly accelerate the departure of the very people we need to maintain our economic growth,” said John Regan, President and CEO of Associated Industries of Massachusetts.

AIM opposes income surtax

A graduated income tax would take an estimated $2 billion each year from some 17,000 Main Street businesses and others that pay taxes at the individual rate. These companies are already drowning in more than $1.5 billion in new taxes and fees to pay for a financial shortfall in the Medicaid program and to fund the new paid family and medical leave program.

The data on our-migration from high-tax states is consistent with other studies of tax policy.

Connecticut in 2009 added a 6.5 percent income tax bracket for those earning more than $500,000 per year. The state followed up with a comprehensive $1.5 billion tax increase in 2011 to deal with a budget shortfall. A final round of tax increases took effect in 2015.

According to information compiled by Pew Charitable Trusts, tax revenue for all 50 states is averaging 6.3 percent higher than it was at the start of the 2008 recession. Connecticut tax revenue, on the other hand, is only 3.8 percent higher, despite the three tax increases.

Once the economic heavyweight of New England, Connecticut is the only state in the nation that has yet to recover the jobs lost during the economic downturn.

Income surtax laws have failed in other states as well.

Within three years of Maryland enacting its millionaires tax, 40 percent of the state’s seven-figure earners were gone from the tax rolls - and so was $1.7 billion from the state tax base.

Boston College researchers studied the migration of wealthy households to and from New Jersey. They concluded that wealthier New Jersey households did in fact consider the high-earner taxes when deciding whether to move to or remain in New Jersey.

The researchers’ data analysis found that from 1999 to 2003 - before the millionaires’ tax was imposed - there was a net influx of $98 billion in household wealth into the state. After the tax was implemented, an increasing number of wealthy families left the state, resulting in a loss of $70 billion in wealth.

Want updates on the income surtax debate? Contact Brad MacDougall, Vice President of Government Affairs at AIM, bmacdougall@aimnet.org.

Topics: Massachusetts economy, Income Surtax, Taxation

Employer Confidence Falls in May

Posted by Christopher Geehern on Jun 4, 2019 8:30:00 AM

Employer confidence weakened in Massachusetts during May amid renewed trade tensions and concerns among companies about increased operating costs from paid family leave and other government mandates.

BCI.May.2019The outlook among business leaders has moved in a narrow, overall optimistic, range for much of 2019.

The Associated Industries of Massachusetts Business Confidence Index (BCI) lost 3.2 points last month to 57.1, its lowest level since October 2016. The Index has declined 9.5 points since May 2018.

All of the constituent indicators that make up the BCI weakened during May with the largest drop coming in employer views of conditions six months from now.

The erosion of confidence during the past 12 months has been driven largely by caution about the national economy and concern among manufacturing companies.

“The Business Confidence Index continues to reflect the Goldilocks economy in which we find ourselves – US GDP growth is expected to remain at a modest level of 2 to 3 percent and there is not much inflation or deflation. There are both encouraging signs and red flags,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.

Several employers participating in the survey said regulatory costs have become a significant concern.

“The cost to operate has increased dramatically - higher wages, benefit costs, supply costs and cost of compliance with all the new regulations coming out of State House,” one employer wrote.

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.

The Index has remained above 50 since October 2013.

Constituent Indicators

The constituent indicators showed a broad-based retrenchment during May.

The Massachusetts Index assessing business conditions within the commonwealth fell 2.3 points to 60.9, while the US Index shed 3.3 points to 55.0. The Massachusetts reading has declined 9.1 points during the past 12 months and the US reading has dropped 14.3 points during the same period.

The Future Index, measuring expectations for six months out, tumbled 4.5 points to 56.0. The Current Index, which assesses overall business conditions at the time of the survey, lost 1.8 points to 58.2, 8.4 points lower than a year ago.

The Employment Index declined 1.2 points for the month and 5.1 percent for 12 months. Analysts say employers continue to struggle to find qualified workers in a state economy with a 2.9 percent jobless rate.

Non-manufacturers (60.0) were more confident than manufacturers (54.7). Small companies (58.4) were more bullish than large (55.0) or medium-sized companies (57.6), a reversal of the usual pattern. Companies in Eastern Massachusetts (59.3) continued to be far more optimistic than those in the west (54.0).

Elmore Alexander, Retired Dean of the Ricciardi College of Business at Bridgewater State University and a BEA member, said Massachusetts employers are reflecting general concerns about tepid national economic growth, renewed geopolitical tensions and slowing corporate spending.

“Few see an imminent recession, but most experts believe US economic growth will slow from 3 percent last year to 2.1 percent this year to 1.9 percent in 2020,” Alexander said.

Rising Costs

AIM President and CEO John R. Regan, also BEA member, said the national economic uncertainty comes at a time when Massachusetts employers are struggling with a series of expensive new employment law mandates such as the state’s $1 billion paid family and medical leave program.

“AIM has joined Raise Up Massachusetts and other groups in asking the Baker Administration to delay the scheduled July 1 start of paid leave by three months to provide employers time to consider how much of the cost they will share with workers and whether they wish to opt out of the state system. The delay is necessary to ensure a smooth rollout of this new entitlement,” Regan said.

Regan joined the BEA after being named President and Chief Executive Officer of AIM.

Topics: International Trade, AIM Business Confidence Index, Massachusetts economy

Video Blog: Attorney General Healey Addresses Business Community

Posted by Christopher Geehern on May 31, 2019 9:34:25 AM

Attorney General Maura Healey told more than 800 business leaders at the AIM Annual Meeting May 17 that she looks forward to collaborating with employers on key issues such as education, substance abuse, health care and clean energy. Watch her remarks here.

Topics: Education, Health Care, Attorney General Maura Healey

Meet 2019 Gould Award Winner Snapchef

Posted by Christopher Geehern on May 23, 2019 9:47:09 AM

Associated Industries of Massachusetts last week presented the 2019 John Gould Education and Workforce Training Award to Snapchef, a Dorchester-based company founded 17 years ago by husband and wife Todd and Daniella Snopkowski that provides free culinary training to thousands of people who often subsequently find jobs through the company’s staffing operation. Here is the Snapchef story.

Topics: AIM Annual Meeting, Workforce Training, Gould Education and Workforce Training

Meet 2019 AIM Vision Honoree Wayfair Inc.

Posted by Christopher Geehern on May 22, 2019 2:47:54 PM

Associated Industries of Massachusetts last week presented its 2019 Vision Award to Wayfair Inc., a Massachusetts-born technology company that has redefined how people shop for their homes. Wayfair has more than 5,500 full-time employees in the commonwealth and continues to grow its presence in Boston and beyond. Here is the company's story.

Topics: AIM Annual Meeting, Massachusetts employers, AIM Vision Award

New Era Begins as Regan Becomes President of AIM

Posted by Christopher Geehern on May 20, 2019 10:28:04 AM

Regan.Annual.2019Editor's note: John R. Regan, who has directed AIM's government advocacy for the past 18 years, today becomes the new President and Chief Executive Officer of the largest business association in the commonwealth. Regan outlined a vision for the future of the organization during brief remarks to the AIM Annual Meeting Friday.

As the Roman philosopher Seneca observed “Omni fine initium novum” or, “Every new beginning comes from the end of another.”

As AIM prepares to write a new and exciting chapter in its distinguished history, I am reminded at every moment of the wisdom, generosity and quiet determination with which my predecessor Rick Lord has paved the road before me.

Rick never lost sight of where he came from and he never forgot that trust and respect are the ultimate currency of public policy and service.

Please join me - in again acknowledging Rick for all he has done for the Massachusetts economy.

Conscious of the fact that you have patiently listened to a full menu of speeches already, I would beg your indulgence to offer three brief observations.

First, to the members of AIM and especially to the Board of Directors, I gratefully accept your commission to lead this organization - supporting the dreams and aspirations of Massachusetts employers. We must keep as our guiding principal the fact that economic growth remains the only effective method of achieving the social equity that makes our commonwealth a great place to live and work.

Second, there has never been a more pressing need for businesses to work together with the sort of common purpose that drove 28 visionary companies to create Associated Industries of Massachusetts 104 years ago.

And third, meeting here in the Seaport district underscores the fact that we face an entirely new set of issues and challenges brought about by the breathtaking pace of change driving our economy.

The founders of AIM would no doubt be amazed to discover their association in 2019 wrestling with issues such as the rules governing ride-hailing apps, the appropriate use of drones, or how to integrate the autonomous vehicles driving around outside the building today.

You know, one can almost see the Seaport District from where I grew up in Dorchester. But in economic terms, it’s a different world and a different century being driven by a new generation of entrepreneurs.

AIM welcomes all employers and dedicates itself to serving the needs of the full range of Massachusetts companies working to provide the hope of a better life to our friends and neighbors.

We remain committed to the principals of diversity, equity and inclusion - on our board, on our staff, and throughout our membership. We assert unequivocally that AIM will be an association in the truest sense of the word, providing an opportunity for everyone – especially those who have historically been ignored – a full voice.

Everything we do at AIM is done to help businesses unlock their full potential. We fiercely advocate for positive public policy that helps to create a strong economy.

We empower businesses with the information, tools and resources needed to successfully navigate a fast-paced, complex business world. We foster connections, networks, and the flow of ideas between people and businesses.

We believe that business can be a positive force for change in helping to create a better, more prosperous society. And the best part is, we’re just getting started.

Topics: Associated Industries of Massachusetts, AIM Annual Meeting, John Regan

Attorney General Invites Collaboration with Business

Posted by Christopher Geehern on May 20, 2019 6:40:37 AM

Attorney General Maura Healey told more than 800 business leaders at the AIM Annual Meeting Friday that she looks forward to collaborating with employers on key issues such as education, substance abuse, health care and clean energy.

Healey2019AnnualNoting that she and previous attorneys general have worked closely with AIM on everything from health-care reform to implementation of paid sick days, Healey said the association has always based its advocacy on facts and knowledge.

“We look forward to building on Rick (Lord’s) legacy,” Healey said.

“I am firmly of the view that the problems we face today are not going to be solved by government. They will be solved by all of us working together.”

Healey made her remarks shortly after Lord symbolically handed over the job of president and CEO of AIM to John Regan, who has directed AIM’s government affairs advocacy for the past 12 years.

The attorney general said Lord was one of the first business leaders to whom she spoke when she became a candidate for the office. The two met during a driving snowstorm and spent an extended time discussing the burden that health-care costs placed on employers and the challenges of moderating energy prices.

“Under Rick’s leadership this organization has grown in amazing ways,” she said.

Healey’s collaborative agenda remains ambitious now that Regan is taking the reins at AIM.

She told the audience that the key to maintaining stability in the health-care market is to preserve the federal Affordable Care Act (ACA). Some 2.5 million Massachusetts residents have a pre-existing medical condition and 400,000 gained health-insurance coverage through the Medicaid expansion made possible by ACA, according to Healey.

The attorney general also noted the support of the Massachusetts business community for civil rights, stretching from the Goodridge decision establishing marriage equality to opposing a question on the 2018 statewide ballot that would have rolled back protections for transgender individuals.

She decried the new Alabama law restricting access to abortion by making an economic argument. Women are more than half the population and half of the work force, so anything that prevents women from full participation in the employment market will impede economic growth.

Healey concluded by saying that the commonwealth’s formula for funding education must change.

“Your zip code should never determine the quality of education you receive,” she said.

Topics: AIM Annual Meeting, Health Care, Attorney General Maura Healey

Joanne Hilferty to Chair AIM Board of Directors

Posted by Christopher Geehern on May 16, 2019 2:30:03 PM

BOSTON, May 16, 2019–Joanne K. Hilferty, president and CEO of Morgan Memorial Goodwill Industries in Boston, is set to be elected Chair of the Board of Associated Industries of Massachusetts (AIM) Friday as the state’s largest business association convenes for its annual meeting.

Hilferty2019Dennis Leonard, President and CEO of Delta Dental Plan of Massachusetts, is expected to be elected Treasurer of the association while Patricia Begrowicz, President of Onyx Specialty Paper in South Lee, will be Assistant Treasurer.

Hilferty, Leonard and Begrowicz will stand for election alongside a diverse slate of 13 new board members representing companies from every sector of the economy and from every corner of the commonwealth. The officers and new directors will be unanimously recommended by the AIM Nominating Committee.

A member of AIM’s board since 2008, Hilferty was elected to the AIM Executive Committee in 2010. She became Assistant Treasurer in 2012, and Treasurer in 2015. Hilferty will be the first woman to chair the AIM board.

Outgoing AIM Chair Dan Kenary said: “Joanne Hilferty is an accomplished business executive who runs a $45 million-a-year, multi-location enterprise focused on a critical need for the Massachusetts economy: training and developing talented employees. She has been part of the board leadership at AIM for almost a decade and is the perfect person to carry AIM into an exciting future.”

Kenary is CEO of the Massachusetts Bay Brewing Company, parent company of Harpoon Brewery and four other brands.

Hilferty said: “AIM stands at a pivotal moment as it seeks to represent the full diversity of employers creating economic opportunity for the people of Massachusetts. I look forward to working with the board to assure that the organization is inclusive as it represents current members and reaches out to new ones in order to continue to be a leading force advocating for economic vitality in the new economy.”

Hilferty has served as president and CEO of Morgan Memorial Goodwill Industries since 1995, substantially increasing its revenue, geographic reach and number and range of individuals served in its job training and career services. Morgan Memorial Goodwill Industries has been named one of the Top 100 Women-Led Businesses in Massachusetts by the Boston Globe Magazine and the Commonwealth Institute for the last five years.

Hilferty serves on the Board of the Massachusetts Council of Human Service Providers and has been appointed to numerous Boston economic development advisory groups. In April she received the Goodwill Industries International Advocacy Leader award and has received numerous other awards including the Greater Boston Chamber of Commerce Pinnacle Award for not-for-profit management.

A Phi Beta Kappa graduate of Brown University, Hilferty holds a master’s degree from the Woodrow Wilson School of Public and International Affairs at Princeton University. She lives in Cambridge.

The 13 new directors set to join AIM’s 75-member board are:

  • Arthur Barrett, President, Barrett Distribution Centers, Franklin
  • Peter Bowman, Vice President, External Affairs, Verizon Communications, Boston
  • Janice Goodman, Owner, Cityscapes, Boston
  • Dominick Ianno, Head of State Government Relations, MassMutual, Springfield
  • Marie Johnson, Treasurer, Ken’s Foods, Inc., Marlborough
  • Pia Sareen Kumar, Owner, Universal Plastics, Holyoke
  • Marianne Lancaster, President, Lancaster Packaging, Hudson
  • Emiley Lockhart, Senior Counsel and Director of Regional Initiatives, Woods Hole Oceanographic Institution (WHOI)
  • Thomas Pacheco, Chief Financial Officer, Acushnet Holdings Corporation, Fairhaven
  • Srinivas Reddy, Director, Global Innovation & Supply Network Operations, Procter & Gamble, Boston
  • Emily Reichert, Chief Executive Officer, Greentown Labs, Somerville  
  • Kumble Subbaswami, Chancellor, University of Massachusetts, Amherst
  • Annemarie Watson, President, Crane Currency, Dalton

“We are delighted to welcome such an impressive group of CEOs, entrepreneurs and business leaders to the AIM Board of Directors. These new board members are accomplished, committed, and full of  creative energy that will keep AIM moving into the future,” said outgoing AIM President and CEO Rick Lord.

About AIM

Founded in 1915, AIM engages in public policy advocacy for more than 3,500 Massachusetts employers who collectively employ one of every five residents of the commonwealth. AIM is dedicated to supporting pro-business legislation and policy on the full range of economic issues including the cost of health care and energy, compliance with employment laws, state and federal budget, taxes, financial issues, and workforce development.

Topics: Associated Industries of Massachusetts, AIM Board of Directors, Joanne Hilferty

AIM Names John Regan New President and CEO

Posted by Christopher Geehern on May 9, 2019 12:12:47 PM

John R. Regan, a Boston native who has directed government affairs advocacy at Associated Industries of Massachusetts (AIM) for the past 12 years, was selected today as the next President and Chief Executive Officer of the commonwealth’s largest business association.

Regan2019The AIM Board of Directors approved the selection of Regan during a special board meeting this morning. Regan succeeds AIM President and CEO Richard C. Lord, who is retiring after two decades leading the organization.

The appointment is effective May 20.

“The AIM board of directors conducted a comprehensive search to find just the right person to lead this dynamic organization into the future,” said Patricia Begrowicz, Chair of the AIM CEO Search Committee and President of Onyx Specialty Papers in South Lee.

“After engaging with an extraordinary and diverse group of more than 100 candidates and prospects, our committee recommended unanimously to the board that John Regan should be the next President of AIM.”

Regan, who joined the AIM Government Affairs Department in 2000 and was appointed Executive Vice President in 2007, said: “My goals are to ensure that AIM remains the pre-eminent voice for businesses on Beacon Hill, and to make Massachusetts an attractive state for employers of all kinds to succeed. I’m committed to ensuring that AIM represents, and advocates for, the full diversity of Massachusetts employers. I am deeply honored and grateful to the board of directors for their confidence in me and for all the time and effort they invested in this search process.”

At AIM, Regan’s focus has been administrative and legislative advocacy, regulatory affairs, litigation, and ballot initiatives. He has negotiated favorable outcomes for employers on major issues such as health-care reform, paid family and medical leave, use of non-compete agreements, pay equity, unemployment-insurance rate freezes, and the 2018 “Grand Bargain” compromise that avoided costly and contentious ballot questions concerning the minimum wage, sales tax, and paid leave.

Dan Kenary, Chair of the AIM board of directors said: “John emerged as the clear top choice to build on Rick Lord’s long legacy of success advancing the interests of employers and fostering economic growth and opportunity in the commonwealth. We’re excited to have John lead our organization.” Kenary is CEO and co-founder of Mass. Bay Brewing Company in Boston.

Regan has deep experience in both the private and public sectors. Prior to his tenure at AIM, he served as Chief Operations Officer for MassDevelopment, the state’s finance and development agency, overseeing real estate development and community revitalization projects including the transformation of the former Fort Devens. Before MassDevelopment, Regan was the Executive Director of the Massachusetts Office of Business Development, leading the commonwealth’s business retention and recruitment efforts.  

Regan, a graduate of Boston Latin School, earned his bachelor’s degree from St. John’s Seminary College in Boston and a certificate in organizational management from the U.S. Chamber of Commerce.

About AIM

Founded in 1915, AIM engages in public policy advocacy for more than 3,500 Massachusetts employers who collectively employee 1 of every 5 residents of the commonwealth. AIM is dedicated to supporting pro-business legislation and policy on the full range of economic issues including the cost of health care and energy, compliance with employment laws, state and federal budget, taxes, financial issues, and workforce development.

Topics: Associated Industries of Massachusetts, John Regan

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