Just returned from the Chamber’s annual Labor Day event with Marty Regalia and Randy Johnson. They expertly double-teamed the themes of the day – economics and the workplace. We’ll post more on this throughout the weekend, but wanted to quickly hit the high points:
 
Marty Regalia:

• “The important fact is that we are growing,” he said, while noting that unless we grow above our long-run potential, we’re not going to get the kind of job growth that we need to see.
• We are looking at maybe another year or more of a bad housing market. Housing, along with the stock market, are the two major sources of wealth for most people;
• Companies are sitting on $1.8 trillion in cash reserves – an extraordinarily high number – because of dual uncertainty: economic and political. In other words, business is uncertain about the economy (we all are….) and about what the public policy arena – the Administration and Congress – has in store for them. Unless there’s more certainty, noted Regalia, companies will not be spending;
• The trade sector is “deteriorating” because of slow growth in Europe and globally. The dollar is relatively stable;
• In terms of the federal budget, the spending and revenue projections don’t meet, meaning we are facing structural, not cyclical deficits;
• We are off about 7.5 million jobs, unemployment is at 9.5% and will likely increase when marginal workers start to once again look for work;
• The duration of employment is peaking as well. Regalia cited a recent op-ed by Harvard Professor Robert Barro on this topic, linking the extension of unemployment benefits to these historic highs.
• Lots of chit-chat on taxes. Today, the top 1% of earners make 22% of the income in this country and pay 40% of the taxes. Regalia emphasized here and in response to a question later that the economy is interconnected, that policy-makers need to recognize the basic synergy in the economy, i.e., of wealthy to middle-class, of small business to large. All are interdependent and you can’t generate consumption by only targeting one sector. “Rifle shot” stimulus, as he called it, is an ineffective way to spur the economy, since all sectors are interdependent. Increasing taxes now on any sector is the wrong way to go.

Randy Johnson:

• While much of the public focus is on employees facing tough times, Johnson reminded folks this morning that these are very tough times for employers, too. Through these incredibly daunting times, employers still manage to provide health care for 170 million employees.
• A Gallup poll earlier this week revealed that some 87% of employees are either somewhat or completely satisfied with their jobs. (Insert wisecrack here about the 4% that are “completely dissatisfied”);
• More than half of all union workers are in the public sector, meaning that slightly less than half of the remainder – the private sector workers – will have to pay more and more in taxes to keep their brethren (and sisters) afloat;
• He has never seen “a more aggressive movement” to put more burdens on employers than he has seen recently. From making it easier for workers to organize, to increasing lawsuits around workplace disputes to mandating more paid leave, this is unprecedented in his near-three decade career on these issue;
• The Chamber will continue to fight the so-called Employee Free Choice Act, which doe s away with secret ballot elections. He expects a push by labor and its allies during the expected lame duck session of Congress.

All-in-all, a substantive (if not terribly uplifting) survey of the landscape this Labor Day. Will post more later, and riff on different aspects of this, including some of the charts presented at the briefing. Charts, after all, are the mistletoe of Labor Day. We’ll get back to some of them. These guys are just so smart and substantive that it’s hard to argue with them. These are facts, after all. As former Sen. Daniel Moynihan (late of the Nixon White House) famously said, “You’re entitled to your own opinion but not your own facts.” These facts speak for themselves. The trajectory of the economy and the crying need for certainty, tax relief and regulatory reform are obvious to everyone. Well – almost everyone.