Looming Pink Slips

@ A "shift in product demand and consolidation of facilities" has led to the closing of a Fruit of the Loom plant--and a loss of 800 jobs. The company announced today that the Jerzees de Choloma plant in Choloma, Honduras will close within the next few months. Fruit of the Loom also announced that it would help employees find other jobs.

@ The H&H Tube and Manufacturing Plant in Cheboygan, MI, will be closed within nine months, company officials announced today, laying off 50 workers. The company was bought by Sunspring North America in June, and will consolidate H&H manufacturing operations at the other plant in Vanderbilt, MI.

@ On Monday, Sanmina-SCI, a global contract manufacturer in various fields, announced plans to close its Fountain, CO, manufacturing plant, eliminating 319 jobs. The company's Rapid City plant remains open, although earlier this month around 100 workers were reportedly laid off. The Associated Press reported:

ItÕs not unusual for Sanmina-SCI to cut back its Rapid City work force to match the ebb and flow of contracts for electronics work. Over the years, the company has regularly laid off workers and called them back.

Sources: Reuters, The Cheboygan News, The Rapid City Journal via AP,

Hire Local, Cash In

According to the Michigan Department of Labor & economic growth, the state's labor force has continued to shrink--falling by 64,000 (1.3%) from January to July. Since July 2006, the state has lost 27,000 payroll jobs in manufacturing, 17,000 in construction, 14,000 in government, and 13,000 in trade, transport, and utilities.

A new economic development bill proposed by Democrats hopes to address this issue-- giving extra incentives for hiring Michigan workers. Hire Michigan First would create a sliding scale in which a company employing 100% Michigan workers is more likely to get a tax break than one employing 80% local workers. The bill would also make sure that companies hiring illegal immigrants would not receive contracts or incentives.

State Rep. Robert Dean summed up the proposal at a news conference on Monday: "Tax incentives and other benefits that come with economic development projects should be awarded only to companies that put Michigan workers first."

Sources: Grand Rapids Press, Lansing State Journal, Forbes via AP

Out of many, one. . .solution

This week, the Jamaica Chamber of Commerce met to discuss an important question: How do we create jobs in Jamaica?

According the Statistical Institute of Jamaica, the unemployment rate in 2006 hovered around 10 percent.

JCC President Mike Myers told the Caribbean Business Report radio show:

"Jamaica must think outside the box. We need to pick industries where we can compete globally. Then we need to offer incentives, that is, give tax breaks.

In a fascinating interview, the Jamaica Observer spoke with an anonymous retired manufacturer:

The government should embark on a program whereby manufacturers get free land in exchange for building factories and then declare no general consumption tax on Jamaican-made products. That would put idle land to use and give Jamaican products a 16.5 per cent advantage. This would give us a competitive edge and wean the population off foreign goods. Look at it this way, if foreign and Jamaican goods are the same price, people won't buy the local goods, but once Jamaican goods are cheaper people will buy.

The high cost of manufacturing in Jamaica, coupled with the lack of incentives, has not allowed Jamaica to compete globally with industrial countries. Developing solar energy, hydroelectricity, and agriculture would be a good start if Jamaica is ready to emerge as a global force. The Cotonou Agreement (part of the ACP agreementŠyou can view more about that in the last few paragraphs of an earlier post here) that Jamaica signed in 2000 means that the country has a much wider trading scope.

Sources: The Jamaica Observer, The Jamaica Chamber of Commerce, European Commission, The Statistical Institute of Jamaica

Minnesota JOBZ on the Chopping Block

So, it seems that Minnesota's shining star in the way of economic development programs--JOBZ--is under the gun in the Legislature according to an article in the Star Tribune last week.

The JOBZ program was created with the intent of stimulating economic development in areas of Minnesota that are struggling with job creation by giving companies state tax breaks. Interestingly enough, the senator behind the campaign to end JOBZ, DFLer (Democratic-Farmer-Labor party) Tom Bakk of Cook, MN, was behind the creation of the program in 2003.

According to a few companies who were interviewed in the article in the Star Tribune, one of the main problems with the program is that it requires a certain wage be paid to workers constructing any building using state money. (This requirement is intended to prevent a contractor from using cheap outside labor to undercut the local job market.)

An editorial piece in the Star Tribune ran the next day in defense of the JOBZ program.

So, is JOBZ really worth its weight? For now, that's up to the Legislature to decide.

For the most recent annual JOBZ program report, view the PDF here.