Category Archives: Business and Economy

Virginia Next-to-Last in Motley Fool Ranking

Crescent Dunes solar project near Tonopah, NV. Photo:  Wikipedia

by Steve Haner

If you need another reason to break into peals of laughter over the recent CNBC “Top States for Business” ranking, consider this.

In the story about the infrastructure rankings, while praising the state of Nevada, the illustration provided was the aerial shot of the Tonopah Solar Energy facility. The failed, now-in-bankruptcy (also here) Tonopah Solar Facility. Shades of Virginia’s clean energy future to come? But I digress.  Continue reading

Freedom From Union Dues Hangs on Warner

Washington Post photo of a cake delivered to Virginia Senator Mark Warner in May, encouraging his support for the pending PRO Act. So far he is not supporting it.

By Vincent Vernuccio 

First published by the Thomas Jefferson Institute for Public Policy.

A bill under active consideration in Congress would allow unions to get Virginia workers fired for not paying union fees. The Protecting the Right to Organize Act, among many other things would end right-to-work laws in Virginia and in 26 other states.

According to a recent report by the Institute for the American Worker, 89,000 Virginia workers are unionized and currently protected if they change their minds by our state’s right-to-work law.  Those who have chosen not to join a union would be forced to pay union fees if the PRO Act passes. Those who are already members would lose the ability to choose to opt-out and stop paying union fees if they feel they are not getting good representation.

Another 2,971,327 Virginians could be forced to pay union fees if unions organize their workplace and the PRO Act kills right-to-work.  Continue reading

What Goes Up Stays Up

By Dick Hall-Sizemore

One of the explanations for the increase in the cost of new housing recently has been the surge in the costs of raw materials. Builders have been forced to pass those increased costs on to buyers.

Indeed, prices of materials, such as lumber, did increase significantly this last year, reaching a high during the spring. However, with supply chains opening up after the pandemic has eased, those lumber prices have decreased by about two-thirds. According to the theory, then, builders would be passing those savings on to buyers in the from of lower prices.

But, that does not seem to be the case. According to a Wall Street Journal article (yes, I know it will surprise some of you that I subscribe to the WSJ), builders are opting to keep prices where they are, thereby increasing their profit margins. Continue reading

Top State for Business… Or Most Woke State for Business?

by James A. Bacon

As corporate America becomes more woke, placing ever greater emphasis on the diversity of its workforce and executive management ranks, it should come as no surprise that CNBC, which is part of the NBCUniversal corporate media complex, has incorporated wokeness into its annual ranking of Top States for Business.

“We have expanded our measures of inclusiveness, looking more deeply at protections against discrimination, as well as at voting rights and current efforts to expand or restrict access to the polls, based on legislation enacted as of June 1, 2021,” says CNBC in explaining its methodology for ranking the 50 states — in which Virginia scored the top spot for the second year in a row.

Democrats and their allies in the media are crowing about Virginia’s No. 1 ranking this year, the top spot nationally for the second year running. “Virginia Republicans have been warning Democratic control was bad for business,” states the headline of a Virginia Mercury article this morning. “CNBC disagrees.” It turns out that legislation criticized by Republicans as bad for business, continues the story, “actually helped the state’s business reputation.”

I am skeptical. But it’s a hypothesis that Republicans, conservatives, and free marketeers need to consider. Have corporations become so woke that they are adjusting their capital-allocation algorithms in favor of politically progressive states? Or is CNBC so encapsulated in the left-wing media bubble that it has become unplugged from reality? Continue reading

Why Is Northam Doling Out Public Cash at Partisan Events?

by Shaun Kenney

Michael Martz with the Richmond Times-Dispatch writes on Governor Ralph Northam’s hamfisted attempt to use the public trust for partisan gain with a $350 million rescue package paid for by John and Jane Q. Taxpayer.

The proposed package also includes the help requested by Virginia Tourism President Rita McClenny, who appeared before the House and Senate budget committees this year to make the case for aid to the tourism and hospitality industry.

Those businesses employ about 10% of workers but represent 45% of the jobs lost during the pandemic, she told Senate Finance in May. “We want to prepare our communities to open their doors to visitors.”

Of course, the commonwealth is awash in federal COVID relief to the tune of $4.3 billion dollars. One might even be encouraged to think that Northam — true to the spirit of pandemic — might even be inclined to treat the public relief as a public opportunity to show public solidarity with all Virginians.

Instead, Northam and the Virginia Democrats chose to turn a taxpayer-fueled bailout into a partisan romp. Continue reading

Digging Beyond the #1 Ranking

by Steve Haner

Virginia ranks #1 in the “Top States for Business 2021” ranking produced by the business network CNBC, but it is important to dig into the ten measurement categories. They are not weighted evenly. Changing the former “Quality of Life” measure to “Life, Health and Inclusion,” and adding more points to that category, sealed the deal for Virginia’s latest recognition at the top of that chart.

Virginia’s Cost of Living score remains abysmal, number 32 among the 50 states. Cost of Doing Business, the category with the most weight, had Virginia right in the middle of the pack at number 26. The other overweight category is Infrastructure, and again Virginia had a middling rank at number 24.

Where Virginia’s total score shot past the other top states was in the revised Life, Health, and Inclusion score. At number eleven, it was way ahead of the number two through number five states, North Carolina (ranked 37 in that area), Utah (27), Texas (49) and Tennessee (46).

Virginia’s best rankings, and these have buoyed us all through the history of this report, were Education (number 2) and Workforce (number 3).

Governor Ralph Northam will take and enjoy the victory lap that comes with this recognition, the fifth time Virginia has topped the list in the 14 times it has been published. Fellow Democrat and former Governor Terry McAuliffe -– now seeking another term — will try to share the spotlight, although his term produced drought years with Virginia always out of CNBC’s top five and twice out of the top ten. Continue reading

Mamma Mia! CNBC Says Virginia #1 for Business, but Chief Executive Mag says #13.

by Chris Saxman

Beauty, the Greeks started saying back in 3rd century BC, is in the eyes of the beholder.

CNBC announced today that Virginia is the Top State for Business in 2021. That’s great news!

They rank their top 10 states: Virginia – North Carolina – Utah – Texas – Tennessee – Georgia – Minnesota – Colorado – Washington – Ohio.

Chief Executive Magazine in April ranked their top 10 states thusly: Texas – Florida – Tennessee – North Carolina – Indiana – South Carolina – Ohio – Nevada – Georgia – Arizona. Virginia comes in at #13 for them.

Wait…what?

13?

Forbes in 2019 had Virginia at #4 and US News had the Commonwealth at #7 back in March of this year.

If you take the four rankings and then rank those? (No, you don’t add and divide by 4 which would get Virginia to 6.25.) Continue reading

Virginia Wins No. 1 Top-State-for-Business Ranking

Congratulations are due the Northam administration. For the second straight year, Virginia ranks No. 1 in CNBC’s list of the top states for business. There are many best-business rankings, but CNBC’s is the most prestigious. Hopefully, the Old Dominion will see increased interest from corporate investors as a result.

Some will say that the No. 1 ranking vindicates the spending and regulatory policies of the Northam administration and Democratic-dominated General Assembly, which we have described as anti-business on this blog. I disagree. Bacon’s Rebellion will explain why shortly.

But I don’t want that discussion to cloud the good news. Let’s spend a moment basking in the PR bonanza.

— JAB 

With Defeat in Connecticut, Will Virginia Drop TCI?

By Steve Haner

First published this morning by the Thomas Jefferson Institute for Public Policy.

Why do Virginia’s leaders run away from the Transportation and Climate Initiative? Could it be because the first state legislature to consider it, in reliably Democratic Connecticut, just adjourned without even taking a vote on the proposed carbon tax compact, despite strong support from Democratic Governor Ned Lamont?

The Virginia Department of Environmental Quality has called a June 24 public meeting to discuss efforts to ramp down carbon dioxide emissions from transportation sources, but it made no mention of the pending TCI interstate compact. Instead it focused on the General Assembly’s approved 2045 goal of “net zero” emissions in all sectors of the economy, including transportation. Continue reading

Businesses Taxed For Somebody Else’s Layoffs?

Labor Force Participation Rates, March 2021. Source: VEC  Click for larger view. It represents the percentage of population of working age employed or seeking a job.

by Steve Haner

So many Virginia employers faltered or failed during 2020, the remaining companies may be charged a special tax of $95 on each of their own employees in 2022. It will cover the unemployment benefits paid to workers somebody else laid off, the highest so called “pool tax” ever imposed, more than double the amount collected following the previous recession in 2012.

The total unemployment insurance tax (average) may reach $360 per employee in 2022: A base tax of $249, the pool tax of $95 and a special “fund builder” tax of $16. That is more than 50% higher than the previous peak tax in 2012.

The figures emerged this morning as the Virginia Unemployment Commission staff briefed a legislative oversight panel on the financial health of the state’s beleaguered Unemployment Insurance program, swamped by a record number of claims in the COVID-19 recession and hampered by administrative failures in dealing with claims that needed extra attention.

For details, here is the UI Status Report presented today, following the usual format. VEC also provided more information on Virginia’s employment history over time, by region, industry, and locality.  Continue reading

VA Employers Stuck in COVID Time Warp

By Steve Haner

First published this morning by the Thomas Jefferson Institute for Public Policy.

Despite the stunning and rapid success of the vaccines in arresting the spread of COVID-19, if you enter a Virginia workplace you go back in time to the pre-vaccine era of doubt and fear.

Virginia acted in haste in adopting permanent workplace rules related to COVID 19. Now that the Centers for Disease Control has relaxed many of its requirements and conceded that others were not backed up by evidence, the state’s employers are in limbo. The workplace regulations are now badly out of step.

There was no allowance for vaccinations in the regulations, which became permanent in January just as the population was starting to get shots.

Governor Ralph Northam was warned this would happen if the temporary COVID-19 rules were made permanent but barreled ahead to the applause of organized labor. The regulations carry the weight of law and can be enforced with severe sanctions, whether or not they are in direct conflict with the latest CDC guidance. Continue reading

Sentara, Cone Health Call Off Merger

From Virginia Business:

“Sentara Healthcare and Greensboro, North Carolina-based Cone Health mutually called off a merger Wednesday, according to a statement by the Norfolk-based health care system.”

The Sentara Healthcare Board of Directors and the Cone Health Board of Trustees came to the mutual agreement to end affiliation plans late last week, according to the announcement.

In Wednesday’s statement, Sentara officials said, “As this work progressed, we realized that each of our communities and key stakeholders require support and commitments from our respective organizations that are better served by remaining independent. The decision was a difficult one, but both organizations remain dedicated to advancing our common goal of providing outstanding care for our respective communities.”

The outcome was right, whatever the reason. It will be interesting to see where Sentara trains its gaze next.

— J.S.

School Closings Negatively Affect Female Employment

Image by Free-Photos from Pixabay

by D.J. Rippert

Mom at home. An article from The Center Square summarizes a number of studies relating COVID-19, school policies during the pandemic, and the number of women in the workforce. A study by the journal “Gender & Society” characterized the matter as a “tidal wave of women” leaving the workforce in 2020. Center Square notes that, “Researchers found that women primarily left the workforce (in addition to layoffs and job closures) to help educate their children when schools reverted to virtual learning and children were no longer physically at school.” Statistics indicate that the employment gap between mothers and fathers was less in states where the schools stayed open for in-person instruction, either full-time or part-time. As the article states, “But the gap grew by an average of 5% in states where only virtual learning was offered, such as in California, Delaware and Virginia.” Continue reading

Protect Taxpaying Virginians From Coming Inflation

Time for a refresher course on the Weimar Republic?

by Steve Haner

First published this morning by the Thomas Jefferson Institute for Public Policy. 

One of big financial winners with the May 1 Virginia minimum wage increase is the state itself, because the entire raise is subject to a 5% state income tax. With its low standard deduction and personal exemption amounts, Virginia squeezes income tax out of even its lowest wage workers. Continue reading

Vertically Integrated Health Providers/Insurers – Weak State Oversight But New Federal Authority

by James C. Sherlock

In the contest between Virginia’s disorganized attempts to oversee vertically integrated health care and health insurance businesses, Sentara being the most prominent example, and Virginia’s regional monopolies’ defenses against effective regulation and legislation, the monopolies have won.  

This piece discusses Virginia’s failed legislative and regulatory oversight structures. I will recommend structural changes to both to deal with the issues that fall between the cracks.

There is, however, very recent good news.

A new federal antitrust law gives federal courts full authority over integrated healthcare/health insurance business structures operated in restraint of trade. I will briefly describe the potential effects of that change. Continue reading