Category Archives: Labor & workforce

Is McAuliffe Crying Wolf on the Economy?

naval shipyard By Peter Galuszka

Just how bad is the Virginia economy, really?

Gov. Terry McAuliffe, who released a rather modest state budget proposal just a few days ago, has said that the state’s economic picture is bleak because of government spending cuts, most of them at the U.S. Department of Defense, the state’s largest employer, and at other agencies.

“We’re looking down the barrel of a gun,” he told reporters, noting that automatic cuts in federal spending due to sequestration and the run-down of military spending after more than a decade of fighting in Iraq and Afghanistan are badly hurting the state.

There are two curious points. The Washington Post notes that McAuliffe had based some of his gloomy thinking after revenues dipped by $439 million earlier this year. This relates to the $2.4 billion shortfall in the biannual budget. Now, says Finance Secertary Ric Brown, revenues have picked up as the governor and lawmakers have worked to close the shortfall.

There is also a story in this morning’s The Virginian-Pilot that the Norfolk Naval Shipyard (located in Portsmouth, actually) plans to hire some 1,500 workers by this coming September. This will be a net gain of 800 workers making about $21 an hour. The other 700 workers will be to replace retiring ones.

The shipyard, which can handle work on large nuclear ships like aircraft carriers, has a total workforce of 9,500 and the extra hires will take it past 10,000, the highest number since the early 1990s. Most of the new jobs are in skilled trades such as welding and ship fitting.

The Pilot reports that Hampton Roads will lose a total of 18,000 skilled workers by the end of the decade as older employees retire. Replacing them should help mitigate the cuts in federal spending and McAuliffe is doing the right thing by focusing on jobs training and credentialing that will boost high-paying blue collar jobs that don’t require a four-year college degree.

The state’s 23 community colleges are working to come up with a plan required by the federal Workforce Innovation and Opportunity Act, passed this year, to streamline training and make sure that trained workers pass certain requirements.

The Joint Legislative Audit and Review Commission recently issued a scathing report on just how disjointed job training is in the state. It said that there was no system to track how $341 million was spent in state workforce training programs and that only 16 percent of the companies in the state use it. The new federal law may help change that by requiring states to come up with four-year plans on coordinating training.

It could be that McAuliffe is crying wolf to shake up the General Assembly before it convenes Jan. 14. He’s doing just that by including funding Medicaid in his budget again and by calling for restrictions on gun sales (needed). But it may be important to keep in mind that things may not be all that bad, economically.

Our Throwaway Culture

00968005.JPGBy Peter Galuszka

As the holidays approach, what happens to the gifts after you give them?

Many end up in the trash.

I pondered those questions in the December issue of the Chesterfield and Henrico Monthlies. It deals with a polyglot of forces including the planned obsolescence of many goods, especially electronics, global trade cycles, and, most important of all, how Virginia communities deal with disposing of their gifts once they are no longer the latest “in” thing?

“The Throwaway Society” dates back maybe 70 or more years. It is not a new concept at all and it actually hit its prime in the 1940s when it was popularized by the very same industrial designer who gave us the Oscar Mayer Wienermobile.

Oscar-mayer-wienermobile600Today, the cycle often begins at a Chinese wharf and circumnavigates the world. Playing integral roles are lowly county dumps and the companies they hire to recycle what they can and dispose of hazardous materials found in virtually anything electronic.

It’s an off-beat story but it may be a fun read.

Not to spoil your Christmas or anything.

Taking Another Whack at Virginia’s Dysfunctional Job Training System

workforceby James A. Bacon

Virginia spent $341 million in government funds in fiscal 2013 on workforce development programs. What did taxpayers get for their money?

There is no way to tell, according to a new Joint Legislative Audit and Review Commission (JLARC) report, “Virginia’s Workforce Development Programs.” Some of the main findings:

No consistent accounting. Virginia’s workforce development programs appear to spend a high percentage of funds on training rather than administrative overhead — a good thing — but there’s no way to tell for sure. Different programs have different definitions of what constitutes “programs” and what constitutes “administration.

No consistent performance metrics. Virginia programs do not fully measure participants’ success, employee satisfaction or employer satisfaction. Apprenticeship programs do not capture outcomes, such as whether apprentices remain in the industry after program completion or whether they earn higher wages.

Employers don’t use state programs. According to a JLARC survey, only 16% of employers use workforce programs. Employers find them complex, disjointed and difficult to navigate. They are overwhelmed by the number of partners and programs. Instead, they rely upon internal recruitment and training to meet their workforce needs. In many cases, the programs aren’t training skills in demand by employers. In other cases, programs are under-utilized because they are poorly marketed to students and job seekers.

Marginal return on investment. Contract researchers have conducted ROI analysis for several programs and found marginally positive 5- to 10-year returns for Workforce Investment Act programs and a negative return for the Trade Adjustment Assistance program.

These findings should come as little surprise given the way the state’s 24 programs are structured and administered. Sixty one percent of the funding comes from federal sources, which means they have strings attached on how the money can be spent. Administration is scattered across nine state agencies, innumerable regional workforce centers, community colleges, high schools and the Virginia Employer commission.

The fragmentation and ineffectiveness of state workforce development programs has been well known for years, if not decades. In 2014 the General Assembly replaced the old, ineffective Virginia Workforce Council with a Board of Workforce Development to advise the governor and legislature on workforce development matters.  This board, which includes representatives from a wide range of stakeholders,  is expected to monitor and oversee state agencies’ development of a common state vision.

However, JLARC says that state agencies continue to operate in silos, committed foremost to their individual agency missions. Moreover, the Workforce Board lacks the legal authority and the dedicated staff to fulfill all of its responsibilities. “The majority of board members are executive-level staff from Virginia businesses who reported that they have limited time to carry out all of the board’s responsibilities, and several board members expressed only vague knowledge of their responsibilities as board members.”

Bacon’s bottom line: The Commonwealth of Virginia probably could save a lot of money with little harm to the workforce simply by shutting these programs down. The state can’t do that — many of the programs are outgrowths of federal initiatives, and someone local has to administer them. But JLARC has the right idea. Let’s at least develop metrics to measure how well they’re working so the state can conduct Return on Investment analysis to prioritize how the $130 million or so in state dollars are spent.

As for reforming giving more power and resources to the Workforce Board, I’m dubious. We’ll return to the same issue four years from now, a new JLARC team will look at the fragmented, ineffective workforce-development system and, seeing how centralized it is, will recommend we decentralize it. The problems are so fundamental, I suspect, they can’t be fixed by redrawing the organization chart.

Big Energy’s Conspiracy with Attorneys General

Former Va. Atty. Gen. Miller --toady for Big Energy

Former Va. Atty. Gen. Miller –toady for Big Energy

By Peter Galuszka

What seems to be strong opposition to a host of initiatives by President Barack Obama and the U.S. Environmental Protection Agency to curtail carbon and other forms of pollution is no mere coincidence.

According to a deeply reported story in Sunday’s New York Times, some state attorneys general, most of them Republicans, are part of what seems to be a covert conspiracy to oppose carbon containment rules in letters ghost-written by energy firms.

And, there’s a big Virginia connection in former Democratic Atty. Gen. Andrew P. Miller and George Mason University which have been bankrolled by conservative and Big Energy money for years.

The cabal has drawn its modus operandi from the American Legislative Exchange Council, funded by the ultra-right, oil-rich Koch Brothers of Kansas. In that case, ALEC prepares “templates” of nearly identical legislation that fits the laissez-faire market and anti-government and regulation principles held dear by the energy and other big industries. Many marquee-name corporations such as Pepsi, McDonald’s and Procter & Gamble have dropped their ALEC membership  after public outcries.

In the case of the attorneys general, big petroleum firms like Devon Energy Corporation of Oklahoma draft letters opposing proposals that might hurt their profits such as ones to regulate methane, which can be a dangerous and polluting result of hydraulic fracking for natural gas. The Times notes that Oklahoma Atty. Gen. E. Scott Pruitt then took Devon’s letter and, almost-word-for-word, submitted it in his “comments” opposing EPA’s proposed rules on regulating fracking and methane.

The secretive group involves a great deal of interplay involving the Republican Governor’s Association which, of course, helps channel big bucks campaign contribution to acceptable, pro-business attorneys general. In 2006 and 2010, Greg Abbott of Texas got more than $2.4 million from the group. Former Virginia Atty. Gen. Kenneth Cuccinelli got $174,5638 during his 2009 campaign.

One not-so-strange bedfellow is former Virginia Atty. Gen. Andrew P. Miller who was in office from 1970 to 1977 and is now 82 years-old. He’s been very business promoting energy firms. As the Times writes:

Andrew P. Miller, a former attorney general of Virginia, has in the years since he left office built a practice representing major energy companies before state attorneys general, including Southern Company and TransCanada, the entity behind the proposed Keystone XL pipeline. The New York Times collected emails Mr. Miller sent to attorneys general in several states.

“Mr. Miller approached Attorney General Scott Pruitt of Oklahoma in April 2012, with the goal of helping to encourage Mr. Pruitt, who then had been in office about 18 months, to take an even greater role in serving as a national leader of the effort to block Obama administration environmental regulations.

“Mr. Miller worked closely with Mr. Pruitt, and representatives from an industry-funded program at George Mason, to organize a summit meeting in Oklahoma City that would assemble energy industry lobbyists, lawyers and executives to have closed-door discussions with attorneys general. The companies that were invited, such as Devon Energy, were in most cases also major campaign donors to the Republican Attorneys General Association.

“Mr. Miller asked [West Virginia Attorney General Patrick Morrisey] to help push legislation opposing an Obama administration plan to regulate carbon emissions from existing coal-burning power plants. Legislation nearly identical to what Mr. Miller proposed was introduced in the West Virginia Legislature and then passed. Mr. Morrisey disputed any suggestion that he played a role.”

Not only that, but George Mason has an energy study center that is bankrolled by Big Energy and tends to produce policy studies of what the energy firms want. It also has the Mercatus Center, a right-wing think tank bankrolled by the Koch Brothers.

So, when you see what seems to be a tremendous outcry against badly needed regulations to curb carbon emissions and make sure that fracking is safe, it may not be an accident. And, it comes from attorneys general who should be protecting the interests of average residents in their states instead of being toadies for Big Energy.

Meet the New Plan, Same as the Old Plan

ed_planby James A. Bacon

Last week Governor Terry McAuliffe published his strategic plan for economic development, which will provide a road map for legislative and executive policy for the remainder of his term. My quick-and-dirty analysis is that there’s nothing much new here — it checks all the usual boxes — but there’s nothing offensive either. This strategic plan, like those of previous administrations, represents the conventional wisdom of the usual stakeholders.

While the plan does acknowledge the necessity of emancipating Virginia’s economy from his dependence upon the federal government, it ignores the state’s slipping rating in a variety of national business climate rankings. Indeed, the report engages in delusional thinking. “From the robust economy to competitive taxes and incentives, Virginia’s pro-business climate has few, if any, peers,” states a passage describing Virginia’s economic development assets. I think Virginia is a great state and wouldn’t live anywhere else but, really, I know nonsense when I see it. Few peers? C’mon.

Virginia does have many strengths, which served the state well in a previous economic era dominated by corporate recruitment. Our building costs are eight to 22 percent lower than the national average. We have the second lowest workers’ compensation costs in the country. The state has maintained a AAA bond rating since 1938. Virginia can boast of “the greatest number of scientists and engineers of any state.” But the state is struggling to shift to an entrepreneurial, knowledge-based economy.

At least the authors of the report understand that such a transition must be made. As they note, thirteen of the state’s top 20 employers are either public-sector enterprises (U.S. Department of Defense, Fairfax County Public Schools) or private contractors dependent upon federal spending (Huntington Ingalls Industries, owner of the Newport News shipbuilding complex). But the situation is even worse than that. Of the top private sector employers, three are retailers (Walmart, Food Lion and Lowe’s Home Centers) and two (Sentara Healthcare and HCA Virginia Health System) are medical enterprises, none of which provide goods or services tradable outside the state. Only one company — Capital One Bank — creates products and services that it trades outside Virginia. That’s a sad commentary indeed.

The report correctly contends that the focus of economic development should be on building private companies that aren’t dependent upon government spending. To foster that growth, it sees government playing supporting role by being best in class in five areas: infrastructure; strategic growth sectors; overall business climate; entrepreneurism and innovation; and talent. The report also is realistic enough to know that in the current economically constrained environment, the commonwealth of Virginia is in no position to launch any big spending initiatives. The proposals described in the report are appropriately modest and focused.

The biggest void in the report is the lack of any connection between economic development and community development. Arguably, the biggest single challenge in economic development is not just developing a skilled and educated workforce but recruiting and retaining a workforce. It’s the old Richard Florida creative-class thesis. Corporations locate where the skilled labor is. Workers with education and skills tend to pick where they live, based on lifestyle amenities and cultural attitudes, not on where they can find a job. If a company can’t recruit workers to live in [name of your town here], it will suffer a competitive disadvantage. If young, skilled employees decamp for other metropolitan regions, the labor pool shrinks… and employers suffer a competitive advantage.

Our understanding of what mobile but highly desirable creative-class employees are looking for in their lives is still fairly primitive. We have some vague ideas — educated young people like walkable urbanism, bicycle lanes, cool food, a live music scene, etc. etc. — but no one is factoring that knowledge into a clearly articulated strategy that encompasses zoning policies, transportation improvements and public works investments. Until we do, every governor’s economic-development strategic plan will fall short.

Suddenly, It’s Raining Gas Projects and Tax Breaks

Anti-Pipeline By Peter Galuszka

Suddenly it seems to be raining natural gas pipelines and snowing millions of dollars in tax breaks and incentives for rich electric utilities.

Dominion Resources, the powerful and politically well-connected Richmond-based utility, apparently is getting $30 million in public money from the Virginia Tobacco Indemnification and Revitalization Commission without apparently asking for it to help build a new natural gas-fired generating plant in Brunswick County. The information was broken by the Associated Press.

Largesse for Dominion stretches to the other side of the Potomac River as well. The Washington Post reported Sunday that Calvert County Md., where Dominion has approval to convert a liquefied natural gas facility to handle natural gas exports, is going to give the utility about $560 million in tax credits.

And, back in Virginia, controversial is growing over the $5 billion natural pipeline that Virginia and three other southern utilities are planning to take natural gas drilled by hydraulic fracking methods from West Virginia to Virginia and North Carolina.

The Atlantic Coast Pipeline has drawn criticism from environmentalists who fear that gas is not the cleaner panacea to coal that many think. Landowners complain that Dominion and its powerful Richmond law firm, McGuireWoods, are using strong arm methods to force their way on their land to survey possible routes.

mountain valley pipelineYet another pipeline – this one doesn’t involve Dominion – is drawing concern in southwestern Virginia. The $3.5 billion Mountain Valley Pipeline that would likewise begin in the fracked gaslands of northern West Virginia and head south west of Roanoke and then cut to the small town of Chatham.

The complaints are the same as the Atlantic Coast Pipeline – green concerns about leaking methane and the threat of bulldozing bucolic private land by companies using eminent domain.

The Mountain Valley project is being spearheaded by EQT Corp. of Pittsburgh and NextEra Energy of Florida.

So what gives? Utilities like Dominion are using more gas, namely at its new Brunswick County natural gas plant and at an older coal-fired station that’s been converted at Bremo Bluffs on the James River. But how much gas does it actually need?

In the case of Cove Point, Dominion notes that the plant has been importing LNG from places like Northern Africa and Scandinavia for decades although imports have come to a spot given the glut of cheap, domestic gas.

Dominion, which bought the facility about a decade ago, can get gas from an older pipeline that for years has linked the Chesapeake Bay area with gasfields in Pennsylvania where some of the fracking for new product is occurring. Dominion can also tap gas from the venerable Transco Pipeline that for decades has transported gas the traditional way – from the Gulf State processing stations to the northeast.

Dominion says it already has contracts to export gas – from where it comes domestically – to utilities in Japan and India. But when one looks at the spaghetti-like twirl of all of the proposed new pipelines, one wonders what the game really is.

The Atlantic Coast Pipeline has a leg that bounds over to Hampton Roads from near the North Carolina border. Dominion says that this one will help supply one of its pipeline partners with gas because it serves South Hampton Roads. Ok, fine, but it might also serve another new LNG export facility in that area that has perfect deep water conditions for such a facility.

And, as some environmentalists and property owners wonder, why couldn’t the energy companies tap rights of way near existing pipelines? Why can’t existing pipelines be expanded? Go back to the utilities and they say they don’t know exactly where the pipelines will go.

That is very curious. While they don’t know where mega-billion project projects are going to go, they seem to be getting tens, if not hundreds, of billions of dollars in public funds and tax breaks to help them proceed with the Brave New World of natural gas.

 

The Tragedy of Unregulated Home Child Care

Joseph Allen

Joseph Matthew Allen

By Peter Galuszka

Virginia’s attitudes about light regulation are coming home to roost in a most sensitive area – day care for toddlers.

The point was underlined Wednesday when Chesterfield County charged Laurie F. Underwood, 46, with only a misdemeanor  involving the death of one–year-old Joseph Matthew Allen who died after a fire at Underwood’s house Oct. 21. She had been operating her day care operation without proper state licenses — a common occurrence in the state.

The death was a little more than a month after two children — 21-month-old Kayden Curtis and 9-month-old Dakota Penn-Williams – died at another unregulated home day care operation in Lynchburg.

Both operations were supposed to be licensed but neither had permits. And, in the Chesterfield case, no government agency cross-checked to see that Underwood’s home day care operation had proper licensing. Underwood did have a county business license.

Home day care centers handling from five to 12 children are supposed to be licensed by the state Department of Social Services. But no one checks on unlicensed day care centers, Joron Planter, a department spokesperson, told me in October. The only time they do check is if someone complains. She said: “we have no way of knowing [the child care provider] even exists.”

Home day care centers must get businesses licenses from their localities. In Chesterfield, there are 344 listed but the Department of Social Services has only 156 on its tally. One way to check would be for the county and the state to check each others’ records and investigate, but no one does that.

And that is why Virginia is among the eight worst states for proper home day care regulation, according to Virginia child resource group.ranks among the bottom eight states for its regulation of in-home day cares, according to Child Care Aware of America, a national watchdog group.

Even more jarring is the fact that The Washington Post ran a deeply reported series of stories earlier this year noting that since 2004, there were 60 children killed in home day care centers. Of them, the majority, 43, were in unlicensed operations.

In the Chesterfield case, a fire caused by disposed cinders began in a garage and spread to the rest of the house. Underwood tried to get the seven children out, but in the confusion, the one-year-old was left behind. He had been strapped in a car seat in the home. He was removed by fire fighters but later died of acute thermal inhalation.

The parents of the boy, Matthew and Jacquelyn Allen, have told reporters they are upset at the laxity of the criminal charges.

But then, this is Virginia, where pandering to the anti-regulation dogma is more important than protecting toddlers’ lives.

Virginia’s Very Own Keystone XL

acl pipeline map By Peter Galuszka

The rise of natural gas keeps raising more questions about the proper future of Virginia’s and the nation’s energy policies. What just a little while ago seemed a benign source of energy has gushed into a mass of controversy and advantage.

One focus of the conflict – good and bad – is the $5 billion Atlantic Coast Pipeline that Dominion Transmission and three other southern utilities want to build from the booming natural gas fracklands of northern West Virginia, across sensitive Appalachian terrain and on through Virginia and North Carolina.

The pipeline is unusual since it doesn’t follow the usual post World War II path – Gulf States to the industrial northeast — but it shows just how the U.S. energy picture is being turned on its head.

People in West Virginia have faced the raw end of energy issues for a century and a half, but it is a new matter for the bucolic areas of Nelson County and some of Virginia’s most pristine and appealing mountain country.

Here is a story I wrote for Style Weekly on the promises and problems of Virginia’s very own Keystone XL.

Dominion’s Strange Tobacco Money

tobacco commission logo By Peter Galuszka

Dominion Resources, the powerful, Richmond-based utility with $13 billion in revenues, has strangely been getting $30 million public funds to bring a natural gas pipeline to a new generating plant in Brunswick County.

Odder still (or maybe not so) the public funds are coming from the GOP-controlled Virginia Tobacco Indemnification and Community Revitalization Commission which has figured in a wave of corruption since it was formed in 1999.

Even more bizarre, the tobacco commission made up of politically-appointed people arranged for Dominion to receive millions more than its own staff recommended, according to an intriguing report by the Associated Press.

The tobacco commission was created to use money from a massive 1996 settlement that 46 states received from four top tobacco companies in health-related lawsuits. Many states used their funds to promote health and anti-smoking campaigns. Virginia did some of that but created a pork barrel commission to dole out $1 billion to projects allegedly aimed at helping residents of Virginia’s Tobacco Road along the state’s southern tier for economic development projects.

In the Dominion case, the utility says it never lobbied for grants, but somehow it got $30 million – or $10 million over three years for a pipeline to its $1.3 billion Brunswick gas plant. The commission’s own staff said $6.5 million should have been sufficient for the first installment.

So, you have a situation where Dominion, which is a huge contributor to political campaigns,  says it never really wanted grants, the commission staff recommended one amount and the tobacco commission awarded a much bigger one. And, according to the AP, no one seems to know anything about it.

Well, that’s about par for the course. Here’s something I wrote for The Washington Post in September:

“No one seems to be checking whether commission projects are worth it. A 2011 study by the state’s Joint Legislative Audit and Review Commission found that, of 1,368 projects funded for $756 million, only 11 percent were measured for results. “They are just handing out money,” Del. Ward Armstrong (D-Henry) said in 2011.

John W. Forbes II, a former state secretary of finance and a tobacco commission board member, was convicted in 2010 of defrauding the commission of $4 million. He used the money for “The Literary Foundation of Virginia,” which he created, and set up himself and his wife with six-figure jobs. The rest was siphoned to shell companies.

The commission has awarded $14 million in grants to the Scott County Economic Development Authority, which is headed by John Kilgore Jr., Terry Kilgore’s brother (Terry heads the commission and his brother Jerry is major Republican politician). Meanwhile, their father, John Kilgore Sr., heads the nonprofit Scott County Telephone Cooperative’s board, which has received $7 million in tobacco money to expand broadband access.

The Kilgore family affair isn’t illegal, but it looks bad. The tobacco stench just doesn’t go away. In June, federal agents subpoenaed commission records in their probe of former state senator Phillip P. Puckett. The powerful Democrat from Russell was supposedly discussing a lucrative staff job on the tobacco commission with Terry Kilgore just before a key vote on expanding Medicaid. Puckett resigned in time to throw the vote toward opponents, most of them Republicans.”

The gas pipeline apparently would connect with a major interstate pipeline operated by Transco and runs from the Gulf State gas fields through Virginia to the Northeast. And, Dominion is one of four utilities planning a brand new $5 billion that would take natural gas fracked in West Virginia, over sensitive tops of the Appalachians, southeast to North Carolina. That project includes a spur line to the Dominion Brunswick plant.

One wonders why Dominion needs two pipelines to one plant — especially one built with funds intended directly for public service.

Well, as they say in the giant newsroom in the sky, good stories only get better.

Bringing Big Data to the Poverty Debate

Here is a positive development in state government that will never get the attention it deserves: The Virginia Department of Social Services is joining four other state agencies in contributing data to the Virginia Longitudinal Data System (VLDS).

VLDS is a system for accessing data maintained by the Virginia Department of Education, the State Council for Higher Education in Virginia, the Virginia Employment Commission and the community college system. The program allows researchers to gain insight into what public policy initiatives will most cost-effectively prepare Virginians for a modern, 21st-century workforce.

The Department of Social Services brings new data to the mix and allows researchers to ask new questions, such as:

  • How does participation in public assistance programs (e.g. child care, WIC, Head Start, SNAP, TANF, Medicaid) in Virginia impact school readiness, school achievement, health, family cohesion, future employment and wages?
  • What is the return on investment from public assistance programs in Virginia? Are there patterns that suggest different program delivery models that may yield greater effectiveness or cost savings?
  • What are the most critical health, safety and community factors that contribute to children’s school readiness and school achievement?
  • How does investment in early childhood health and education impact future need for and cost of public assistance?
  • Are participants in Temporary Assistance for Needy Families (TANF) work skills training programs employed and earning a living wage one or two years after completing the program? Which work skills programs have the greatest success rates?

These are all excellent questions! I am heartened to know that people in Virginia state government are asking them.

So many debates about public policy issues occur in a data-free vacuum. People advance arguments based upon preconceptions and ideology. VLDS holds out the promise of allowing us to reach conclusions based on hard data. This is one wonk who looks forward to the research coming from this initiative — even if the conclusions contradict some of my own pet theories.

– JAB