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In The News

Drug Use by State: 2022’s Problem Areas

From: Wallet Hub

Drug abuse has a long and storied history in the United States, and we’ve been “at war” with it since 1971 under the Nixon administration. Yet despite the country’s best efforts to fight it, the problem is getting worse, and is exacerbated by the COVID-19 pandemic. There were over 100,000 drug overdose deaths in the 12-month period ending in April 2021, up 28.5% from the previous year. It’s crucial for the government to address this issue and prevent it from getting any worse.

Given the uncertain future and lack of significant progress to date, it’s fair to wonder where drug abuse is most pronounced and which areas are most at risk. This report attempts to answer those questions by comparing the 50 states and the District of Columbia across 21 key metrics, ranging from arrest and overdose rates to opioid prescriptions and employee drug testing laws.

Highest Drug Use by State

Overall Rank State Total Score Drug Use & Addiction Law Enforcement Drug Health Issues & Rehab
1 West Virginia 58.42 4 3 23
2 District of Columbia 57.24 1 29 7
3 Arkansas 54.02 14 4 9
4 Missouri 53.36 29 1 12
5 New Mexico 52.67 8 7 25
6 Nevada 52.41 9 37 1
7 Colorado 52.40 17 6 8
8 Michigan 52.09 13 19 4
9 Oregon 49.66 7 43 2
10 Tennessee 48.91 3 25 32
11 Louisiana 48.37 12 21 14
12 Kentucky 46.82 5 8 50
13 Rhode Island 46.79 11 47 5
14 Indiana 46.63 10 14 44
15 Massachusetts 46.35 18 20 15
16 Montana 46.27 16 23 11
17 Vermont 45.67 2 49 36
18 Arizona 45.52 21 28 6
19 Maine 45.40 6 46 21
20 Oklahoma 44.10 31 32 3
21 Wyoming 43.91 40 2 30
22 Illinois 43.75 24 18 31
23 Washington 42.09 15 44 20
24 New Hampshire 41.56 34 15 37
25 Kansas 41.25 36 24 10
26 Alaska 40.78 20 48 16
27 Mississippi 40.23 32 26 22
28 New York 40.14 37 16 40
29 California 39.65 22 30 38
30 Pennsylvania 39.31 35 9 48
31 Maryland 38.95 25 38 33
32 North Carolina 38.56 27 27 39
33 Florida 38.52 33 42 13
34 Delaware 37.93 30 41 27
35 New Jersey 37.52 41 12 34
36 Connecticut 37.45 23 35 42
37 Texas 36.95 46 13 18
38 Ohio 36.43 19 40 47
39 South Carolina 36.24 26 50 35
40 Wisconsin 35.34 42 10 46
41 Alabama 34.42 28 51 19
42 Georgia 34.18 38 36 26
43 South Dakota 33.87 49 11 28
44 Virginia 33.77 44 17 43
45 Nebraska 33.58 48 22 17
46 North Dakota 33.19 51 5 45
47 Iowa 32.81 43 33 24
48 Idaho 30.30 47 31 29
49 Utah 28.57 45 34 41
50 Hawaii 25.20 39 45 51
51 Minnesota 22.93 50 39 49

 

Some missing workers are really lost

From: Richmond County Daily Journal

North Carolina’s labor markets are healing — slowly. As of March, our state’s headline unemployment rate was 3.5%, comparable to where it was before the onset of the COVID-19 pandemic in early 2020. More importantly, while our labor-force participation is still significantly below the pre-COVID rate 59.2%, it is improving. It was 57.7% in March, up from 56.2% a year ago.

That’s important because the headline unemployment rate, technically known as the U-3 rate, only counts as unemployed those working-age individuals who are jobless but actively looking for work. Unfortunately, there are many thousands of working-age North Carolinians without jobs who aren’t counted in the U-3 rate.

Given the labor shortages currently afflicting industries as divergent as retail, construction, dining, and business services, why do so many potential employees remain on the sidelines?

I’ve written about this issue many times in the past. Businesses are desperately seeking help. That employer demand has, in turn, pushed up wages (although price inflation has eaten away some of the apparent gain). And the expanded unemployment-insurance benefits and other subsidies that discouraged some workers from taking new jobs or returning to old ones have expired. Given these and other pro-employment factors, then, why do we have so many missing workers?

A new National Bureau of Economic Research working paper suggests that I and other analysts should have phrased the question a bit differently. Some of these prospective workers aren’t missing. They’re lost.

That is to say, these folks aren’t simply missing from our statistical models. They are physically and psychologically lost, suffering from addictions so debilitating that they lack either the will or the capability to fill vacant jobs.

The prevalence of opioids, while significant, is only part of the story. Comprehensive data on post-pandemic drug and alcohol abuse are not yet available, but the three economists who authored the new paper — Jeremy Greenwood from the University of Pennsylvania, Nezih Guner from the Universitat Autonoma de Barcelona, and Karen Kopecky from the Atlanta Fed — observed that deaths attributed to substance abuse spiked far above preexisting trend lines during the pandemic. Based on these “excessive death” statistics, they were able to extrapolate likely increases in the broader universe of addicts and substance abusers.

Take opioids. From April 2020 to June 2021, some 69,000 Americans died from overdoses or other causes related to opioid abuse. That’s nearly 15,000 more than we might have expected given prior trends. Using ratios developed from other studies, the authors estimated that there were about two million more Americans abusing opioids during this period than would have done so in the absence of the COVID pandemic and the economic dislocations and social isolation that followed. The researchers estimated an even larger increase in alcohol abusers. For all drugs combined, Americans with substance-abuse disorders may well have jumped by more than five million, an increase of 23%.

That’s gigantic. And it couldn’t have happened without wreaking havoc on, among other things, our labor markets. The study’s authors concluded that higher rates of substance abuse among the working-age population can account as much as a quarter of the drop in labor-force participation.

Alas, remedying the problem is far easier said than done. I don’t think further criminalizing it is the right approach. After all, most of the addicts in question are abusing a perfectly legal drug, alcohol, or misusing legal but controlled substances such as opioids. I doubt seriously that passing sweeping new prohibitions or access controls will make enough of a difference to justify the cost in tax dollars, law-enforcement resources, and freedoms. As for drug treatment, program effectiveness varies wildly. My reading of the evidence suggests that truly local programs, often rooted in shared religious faith or community values, produce the best results. They can also be hard to scale.

Still, while substance abusers may be, in a sense, “lost,” that doesn’t mean they can’t be found. All of us, individually and collectively, must be willing to join the search party.

Hawaii ranks near bottom of report on COVID-19 policy effects

From: The Center Square 

The Center Square) – Hawaii ranked near the bottom in an analysis from the National Bureau of Economic Research, which measured COVID-19-related outcomes in the states.

The report measured states’ pandemic policies based on health outcomes, economic performance and impact on education.

Hawaii is unusual because it is an island state, the report’s authors said.

“It ranks last on the economic index and sixth from last on schooling,” the authors wrote in the report. “As of March 2022, it ranks first on health. Understood in the context of island nations such as Australia and New Zealand, the experience of Hawaii suggests that island locations can, by sustaining significant economic losses, reduce mortality for a year or more.”

Hawaii also ranked low for its economy because it relies heavily on tourism, according to the report. The state implemented a Safe Travels Program that required visitors to show proof of vaccination, or a negative COVID-19 test from within three days of arrival. Hawaii was the last state to end its indoor mask mandate.

The authors also cited a report from The Rand Corporation that showed lockdowns did not reduce mortality.

“The correlation between health and economy scores is essentially zero, which suggests that states that withdrew the most from economic activity did not significantly improve health by doing so,” the authors wrote.

Other factors could have played a bigger part in COVID-19-related deaths, according to the report.

“Pandemic mortality was greater in states where obesity, diabetes, and old age were more prevalent before the pandemic. Economic activity was less in states that had been intensive in, especially, accommodations and food,” the authors wrote. “Still, much residual variation in both mortality and economic activity remains even after controlling for these factors because the 50 states and D.C. (District of Columbia) took very different approaches to confronting the COVID-19 pandemic.”

Unemployment Insurance Weekly Claims

By Delaware Department of Labor

In the week ending April 30, the advance figure for seasonally adjusted initial claims was 200,000, an increase of 19,000 from the previous week’s revised level. The previous week’s level was revised up by 1,000 from 180,000 to 181,000. The 4-week moving average was 188,000, an increase of 8,000 from the previous week’s revised average. The previous week’s average was revised up by 250 from 179,750 to 180,000.

The advance seasonally adjusted insured unemployment rate was 1.0 percent for the week ending April 23, unchanged from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending April 23 was 1,384,000, a decrease of 19,000 from the previous week’s revised level. This is the lowest level for insured unemployment since January 17, 1970 when it was 1,371,000. The previous week’s level was revised down by 5,000 from 1,408,000 to 1,403,000.

The 4-week moving average was 1,417,000, a decrease of 36,250 from the previous week’s revised average. This is the lowest level for this average since February 21, 1970 when it was 1,409,750. The previous week’s average was revised down by 1,750 from 1,455,000 to 1,453,250. 2 UNADJUSTED DATA The advance number of actual initial claims under state programs, unadjusted, totaled 196,962 in the week ending April 30, a decrease of 7,164 (or -3.5 percent) from the previous week. The seasonal factors had expected a decrease of 25,765 (or -12.6 percent) from the previous week. There were 510,161 initial claims in the comparable week in 2021.

The advance unadjusted insured unemployment rate was 1.0 percent during the week ending April 23, unchanged from the prior week. The advance unadjusted level of insured unemployment in state programs totaled 1,403,685, a decrease of 38,872 (or -2.7 percent) from the preceding week. The seasonal factors had expected a decrease of 19,646 (or -1.4 percent) from the previous week. A year earlier the rate was 2.7 percent and the volume was 3,763,243.

The total number of continued weeks claimed for benefits in all programs for the week ending April 16 was 1,478,348, a decrease of 35,165 from the previous week. There were 16,151,803 weekly claims filed for benefits in all programs in the comparable week in 2021.

No states were triggered “on” to the Extended Benefits program during the week ending April 16.

Initial claims for UI benefits filed by former Federal civilian employees totaled 489 in the week ending April 23, a decrease of 14 from the prior week. There were 391 initial claims filed by newly discharged veterans, an increase of 23 from the preceding week.

There were 7,333 continued weeks claimed filed by former Federal civilian employees the week ending April 16, a decrease of 798 from the previous week. Newly discharged veterans claiming benefits totaled 4,306, a decrease of 22 from the prior week.

The highest insured unemployment rates in the week ending April 16 were in California (2.1), New Jersey (2.1), Alaska (1.9), Minnesota (1.6), New York (1.6), Illinois (1.5), Puerto Rico (1.5), Connecticut (1.4), Massachusetts (1.4), Michigan (1.4), and Rhode Island (1.4).

The largest increases in initial claims for the week ending April 23 were in New York (+4,760), Massachusetts (+3,491), Connecticut (+1,045), Georgia (+932), and New Jersey (+888), while the largest decreases were in California (-2,860), Ohio (-2,609), Michigan (-1,887), Washington (-475), and Minnesota (-453).

ABC predicts construction workforce shortage of 650,000 this year

By LBM Journal

The construction industry will need to attract nearly 650,000 additional workers on top of the normal pace of hiring in 2022 to meet the demand for labor, according to a model developed by Associated Builders and Contractors.

“ABC’s 2022 workforce shortage analysis sends a message loud and clear: The construction industry desperately needs qualified, skilled craft professionals to build America,” said Michael Bellaman, ABC president and CEO. “The Infrastructure Investment and Jobs Act passed in November and stimulus from COVID-19 relief will pump billions in new spending into our nation’s most critical infrastructure, and qualified craft professionals are essential to efficiently modernize roads, bridges, energy production and other projects across the country. More regulations and less worker freedom make it harder to fill these jobs.”

ABC’s proprietary model uses the historical relationship between inflation-adjusted construction spending growth, sourced from the U.S. Census Bureau’s Value of Construction Put in Place survey, and payroll construction employment, sourced from the U.S. Bureau of Labor Statistics, to convert anticipated increases in construction outlays into demand for construction labor at a rate of approximately 3,900 new jobs per billion dollars of additional construction spending. This increased demand is added to the current level of above-average job openings. Projected industry retirements, shifts to other industries and other forms of anticipated separation are also factored into the model.

Based on historical Census Bureau Job-to-Job Flow data, an estimated 1.2 million construction workers will leave their jobs to work in other industries in 2022. It is expected that this will be offset by an anticipated 1.3 million workers who will leave other industries to work in construction.

“The workforce shortage is the most acute challenge facing the construction industry despite sluggish spending growth,” said ABC Chief Economist Anirban Basu. “After accounting for inflation, construction spending has likely fallen over the past 12 months. As outlays from the infrastructure bill increase, construction spending will expand, exacerbating the chasm between supply and demand for labor.

“An added concern is the decline in the number of construction workers ages 25-54, which fell 8% over the past decade. Meanwhile, the share of older workers exiting the workforce soared,” said Basu. “According to the Centers for Disease Control and Prevention, the industry’s average age of retirement is 61, and more than 1 in 5 construction workers are currently older than 55.

“The scarcity of qualified skilled workers is an even more pressing issue,” said Basu. “Since 2011, the number of entry-level construction laborers has increased 72.8%, while the number of total construction workers is up just 24.7%. For reference, the number of electricians was up 23.9% over that span while the number of carpenters actually declined 7.5%. The number of construction managers has increased by just 2.1%. More than 40% of construction workforce growth over the past decade is comprised of low-skilled construction laborers, who represent just 19% of the workforce.

“The roughly 650,000 workers needed must quickly acquire specialized skills,” said Basu. “With many industries outside of construction also competing for increasingly scarce labor, the industry must take drastic steps to ensure future workforce demands are met.”

In 2023, the industry will need to bring in nearly 590,000 new workers on top of normal hiring to meet industry demand, and that’s presuming that construction spending growth slows next year.

“Now is the time to consider a career in construction,” said Bellaman. “The vocation offers competitive wages and many opportunities to both begin and advance in an industry that builds the places where we work, play, worship, learn and heal. ABC member contractors use flexible, competency-based and market-driven education methodologies to build a construction workforce that is safe, skilled and productive. This all-of-the-above approach to workforce development has produced a network of ABC chapters and affiliates across the country that offer more than 800 apprenticeship, craft, safety and management education programs—including more than 300 registered apprenticeship programs across 20 different occupations—to build the people who build America.”

Click here to view ABC’s methodology in creating the workforce shortage model.

Seattle ranked 13th on list of cities for unemployment rate bounce back

By The Center Square

Four Washington state cities made WalletHub’s list of nearly 200 municipalities ranked in terms of unemployment rate bounce back in the aftermath of the COVID-19 pandemic: Seattle, Spokane, Tacoma, and Vancouver.

In its report, the personal finance website examined 180 cities by comparing each city’s unemployment rate during the latest month for which data is available, March, to unemployment rates for March 2019, March 2020, March 2021, and January 2020. WalletHub also considered each city’s overall unemployment rate.

“Of the four Washington cities included in the report, Seattle is the best ranked, at number 13,” WalletHub analyst Jill Gonzalez explained in an email to The Center Square. “The city is among those where unemployment rates are bouncing back the most because it has the biggest drop (over 60%) in the number of unemployed people in March 2022 compared to March 2020, which is when the pandemic started. The overall unemployment rate in Seattle is 2.1%, the sixth lowest nationwide and significantly smaller than the average of 3.6%.”

The other Washington cities on the list didn’t fare as well, Gonzalez pointed out.

“The other three Washington cities, Spokane, Tacoma and Vancouver rank in the bottom 25 cities with the slowest recovery,” she said.

Tacoma was the lowest ranked Washington city on the list, coming in at No. 172. Vancouver was ranked No. 163, and Spokane was ranked No. 159.

There were various reasons for the three cities’ lower placement on the list, Gonzalez noted.

“Spokane and Tacoma registered very small drops in the number of unemployed people compared to March 2020 – less than 10%, while Vancouver actually had almost 5% more unemployed people in March 2022 compared to March 2020,” she said. “When compared to the same time last year, the number of unemployed people in the three cities is lower by only about 20%, one of the smallest percentages in the country. Plus, the overall unemployment rate in these three cities is above 5%, higher than the average of 3.6%.”

Arizona cities accounted for eight of the top 10 cities on the list. Cities in Vermont made up the other two.

The top 10 cities in terms of unemployment rates bouncing back:

1. Scottsdale, Arizona

2. Tempe, Arizona

3. Gilbert, Arizona

4. Burlington, Vermont

5. Chandler, Arizona

6. Mesa, Arizona

7. Glendale, Arizona

8. South Burlington, Vermont

9. Peoria, Arizona

10. Phoenix, Arizona

The bottom 10 cities in terms of unemployment rates bouncing back:

180. Detroit, Michigan

179. Cleveland, Ohio

178. Dover, Delaware

177. New York, New York

176. New Orleans, Louisiana

175. North Las Vegas, Nevada

174. Fayetteville, North Carolina

173. Bridgeport, Connecticut

172. Tacoma, Washington

171. Wilmington, Delaware

Delaware’s 204.07% Personal Income Tax rate harms small business owners

By Caesar Rodney Institute

Several decades ago, Delaware instituted a gross receipts tax, aka Delaware’s hidden sales tax, that is applied to the business rather than the consumer. When instituted, the tax was meant to be temporary to handle a budget shortfall.

So, why does Delaware still impose this tax when 45 other states have repealed it? A gross receipts tax (GRT) is a horrible public policy.

This tax on Delaware’s small business owners frequently creates “the equivalent” of the highest Personal Income Tax rates in the Country because most small businesses are “pass-thru” entities, meaning that the business owner pays the business’s taxes at their personal income tax rate.

THE DIRTY DETAILS

Let’s look into the mathematics of a small business income statement- it’s necessary. Chart 1 below is an example of a “generic” income statement when a gross receipt tax is applied vs. when it is not applied to a business.

This income statement assumes a “Professional Services” firm with $150,000 per month in revenue (the first $100,000 is exempt from GRT), a GRT tax rate of 0.3983%, and a Personal Income Tax rate of 6.6%.

In this example, the business is barely profitable. During the pandemic, many small businesses were performing even worse than this.

Chart 1: Generic Income Statement “No GRT vs. GRT”

GRT TaxPic1.png

(Source: Author’s own calculation using Delaware’s Division of Revenue.)
As can be seen, the small business owner is paying a tax rate of 204.07% on their income in this scenario (of course, if the business loses money during the month, the “tax rate” is effectively infinite because the GRT is paid whether their business is profitable or not).

Chart 2 is a more “normal” scenario of a ~5% profit margin; the small business owner only pays the equivalent of a 9.33% Personal Income Tax, which would be the 7th highest tax rate in the Nation.

Chart 2: Normal Scenario Income Statement “No GRT vs. GRT”

GRT TaxPic2.png

(Source: Author’s own calculation using Delaware’s Division of Revenue.)
In short, during bad economic times, Delaware’s hidden sales tax, aka the gross receipts tax, ensures that Delaware small business owners pay among the highest personal income tax rates in the nation – taking money out of the business at the exact moment the business most needs that money.

OTHER HIDDEN IMPACTS OF THE GRT

In addition to creating among the highest income tax rates in the Country, the GRT is a “Pyramiding” tax. It gets applied to every step of the supply chain, as shown in the graphic below.

GRT TaxPic3.png

(Source: The Tax Foundation)

By the time a Delawarean is consuming a local brew at their favorite beer garden or restaurant, the GRT has hurt four small businesses.

DELAWARE ALMOST STANDS ALONE

Most states have recognized the destructive impact of imposing a gross receipts tax. Only five states still have GRTs, but of those five, Delaware’s is the most convoluted, with 54 different tax rates ranging from 0.0945% to 0.7468%.

These percentage rates look small, but their impact, as demonstrated above, is enormous. Details on the convoluted nature of applying this tax can be reviewed on Delaware’s Division of Revenue website.

CONCLUSION

Previous CRI analyses of Delaware’s economy have shown, using State and Federal data, that Delaware has been one of the worst economic performers in the Country for the last 20 years.

The GRT is one of the horrible policy ideas that has kept Delaware’s small businesses from growing or adding high-paying jobs.

There are over 17,000 businesses in Delaware with fewer than 20 employees. These firms have almost 70,000 employees making over $3.2B a year in payroll.

Delaware Legislators should allow these small businesses to thrive and add high-paying jobs. They should NOT tax them into failure with what is often the highest “equivalent” personal income taxes in the Nation – 204.07%!

Sen. Darius Brown’s committee positions reinstated

Delaware Live

State Sen. Darius Brown has been reinstated as chair of the Senate Judiciary Committee and member of the Senate Capital Improvement Committee.

Brown, D-Wilmington, was removed from the Judiciary Committee in May 2021 after being arrested on misdemeanor offensive touching and disorderly conduct charges.

He was removed from the Capital Improvement Committee in Nov. 2021 after a heated altercation with Rep. Melissa Minor-Brown, D-New Castle, who accused him of verbally abusing her.

He was found not guilty on all charges in Jan. 2022.

“As Pro Tempore, I removed him from these committees in the face of the allegations he faced last year, and I have now reinstated him given his acquittal in court and my belief that the terms of these sanctions have been appropriate,” said Senate President Pro Tempore Dave Sokola, D-Newark.

“I want to thank Sen. Kyle Evans Gay and Sen. Marie Pinkney for their time and dedication in filling these roles over the last year. Their service has been exemplary,” Sokola said.

Following the Nov. 2021 verbal altercation with Minor-Brown, Sokola said, “Verbal abuse is abuse, full stop, and it cannot go unpunished. In the Senate, there will be consequences for behavior unbecoming an elected official.”

A Better Delaware Announces a New Advisory Board Member

From: A Better Delaware 

WILMINGTON, Del. – Dr. Greg DeMeo, D.O. has joined as an advisory board member at A Better Delaware, a non-partisan public policy and political advocacy organization that supports pro-growth, pro-jobs policies and greater transparency and accountability in state government.

Chris Kenny, Chairman and Founder of A Better Delaware, announced the addition of DeMeo to the board this past week.

“With an aging population, influx of retirees, and substantial percentage of state taxpayers’ dollars going to health care, ABD must be at the leading edge of advocating for meaningful positive change.” Kenny said. “Dr. Greg DeMeo leads one of Delaware’s top specialist practices and has been serving our state in the health care field since 1992.

Dr. DeMeo is the medical director of Christiana Care’s Labor and Delivery Department and is certified in the Da Vinci robotic surgical system and specializes in minimally invasive surgical techniques. Throughout the past ten years, DeMeo has held numerous leadership positions for The American College of Obstetricians and Gynecologists. He currently represents that organization at the national level where he focuses on issues related to Medicare reimbursement.

“A Better Delaware is a leading voice for free and fair competition in health care,” DeMeo said. “State policies that restrict the availability of quality health care options for those who need them all too often result is worse outcomes.”

“In joining A Better Delaware, I’m going to continue my fight for principled, sensible reforms that would offer Delawareans better health care, reduce costs and increase access,” DeMeo concluded. “I couldn’t be more thrilled to join the board and help turn my decades of industry experience into actionable policy for Delawareans.”

DeMeo will serve alongside advisory board members Sam Waltz, former Governor Mike Castle, and William Erhart.

Kathleen Rutherford, executive director for A Better Delaware, hailed DeMeo as “one of Delaware’s most respected authorities in the field of health care.”

“Dr. DeMeo will bring a unique perspective in the area of health care,” Rutherford said. “Our state needs real, pragmatic solutions that give Delawareans more of a say in their health. For too long, our leaders have enacted policies that strip away choice, diminish outcomes and drag our state further toward the bottom of the list. This addition to our advisory board will help us turn this ship around.”

The Costs of Occupational Licensing in Tennessee & Avenues for Reform

From: Beacon Center of Tennessee

Key Takeaways:

  • While Tennessee is generally considered a more free-market-oriented state, one area it regulates more heavily is in occupational licensing, essentially a government permission slip to do a job;
  • Tennessee has over 263 different occupational licenses, registrations, and certifications, covering 30 percent of the Tennessee workforce;
  • The economic cost of obtaining these onerous licensing regulations conservatively costs Tennessee workers over
    $279 million just to enter an occupation of their choice; and
  • Renewing their existing license costs these Tennessee workers nearly $38 million per year.