Thursday, September 16, 2010

Look Ma! No Foresters!

The 10 American Industries That May Never Recover

by Douglas A. McIntyre
Wednesday, September 15, 2010

http://247wallst.com/

It has become clear that jobs in some industries may never come back, or if they do it will take years or decades for a recovery.
24/7 Wall St. examined the Bureau of Labor Statistics' "Employment Situation Summary," and a number of sources that show layoffs by company and sector. The weakness in these sectors will make it harder for the private industry, even aided by the government, to bring down total unemployment from 9.6% and replace the 8.3 million jobs lost during the recession. The losses in these industries have to be offset by growth in others before there can be any net increase in American employment.
Some of the industries are obvious. Detroit will never employ the number of people it did five years ago. Domestic car sales hit 16 million in 2005 and 2006. That number will be closer to 11.5 million in 2010. More cars and light vehicles are made overseas now, in places like Mexico, to keep labor costs down.
Home construction is another industry that will almost certainly not recover. Home inventories are still extremely high, and home prices have fallen to the levels where they were in 2004. Prices in some markets, which include Las Vegas, Florida and parts of California, have dropped 60% to 70%. New construction in those markets will not begin again in the foreseeable future.
Here is the list of the 10 job categories that will not recover, based on 24/7 Wall St. research:
1. State and Local Government Jobs. The level of unemployment in this sector continues to rise. Budget imbalances in a number of states have already caused mass layoffs as tax receipts have dropped sharply. A recent report by the National Governors Association and the National Association of State Budget Officers found that 22 states furloughed employees and 25 laid off workers during fiscal year 2009-10. As an example, California slashed its workforce by tens of thousands -- some were laid off permanently and some are out of work and may be recalled. Former eBay CEO Meg Whitman, who is running for governor of California, said she will cut the state workforce by another 40,000 and sharply cut pensions for new workers. Forty-six states face budget shortfalls that will total $112 billion for the fiscal year ending next June, according to the Center on Budget and Policy Priorities. Municipalities face similar difficulties as property taxes plummet.
2. Construction. Nationwide construction unemployment was 17% in August, up from 16.5% in the same month last year. Over the course of the summer, government statistics have shown sharp drops in the construction of new homes and apartments. Building permits are also down. Most large housing markets have more than 12 months of unsold inventory on hand. There is also a "shadow inventory" of unsold homes -- those that have gone into foreclosure but have not been put on the market by banks. Foreclosures and defaults are expected to rise another 3 million to 3.5 million this year.
3. Installation, Maintenance and Repair. A set of industries related to housing and commercial construction and maintenance will also not generate new jobs. This is the employment sector the government calls "installation, maintenance and repair." Jobs in this sector are dependent on real estate. While many of the workers in these industries, such as plumbers and electricians, are relatively well paid and many work on homes and commercial buildings, some are mechanics who work on industrial equipment, aircraft and plants. These industries will be more crowded as people with training in related work leave the armed forces with the drawdown in troops in Iraq, which will put downward pressure on wages.
4. Automotive Manufacturing. General Motors has cut over 100,000 people since the beginning of the recession in December 2007. Ford has cut over 20,000 and Chrysler 15,000. This does not include foreign car companies with workers in the U.S. By some estimates, every car company worker layoff leads to three more layoffs in related industries that supply the car and light truck manufacturing business. That includes hundreds of car dealerships that have been closed in the last two years.
5. Pharmaceuticals. This industry has bled workers for three years, and that trend is likely to continue. The largest companies in the sector, such as Pfizer and Merck, have a number of blockbuster drugs that have lost their patent protection in the last decade. They have other pharmaceuticals that will lose that protection in the next decade. Sales of most of these drugs will move to generic companies that will sell them for far less, and erode critical revenue sources for the huge pharma firms. Most companies in the industry admit that they cannot replace the drugs that go off patent fast enough to keep their revenue high. The other reason employment in the sector will stay down and may drop further is that big drug companies are merging to save costs, and most of those costs are people. Pfizer has cut 30,000 people since the start of the recession. Merck has cut 25,000, and these companies and their peers expect that they will have to bring down costs even more.
6. Big Telecom. AT&T, Sprint-Nextel and Verizon have passed their peak employment levels. Employment in the sector will not recover and could shrink for two reasons: (1) The landline business is falling rapidly as home phone users move to VoIP, and (2) Increased adoption of cell phones. The cellular subscription business has been damaged by price wars meant to gain market share in the wireless industry -- one that has stagnated due to a 90% market penetration in the U.S. Sprint made substantial cuts as it posted three years of losses. The most recent was 2,500 people in November last year. In 2008, AT&T said it would lay off 12,000 people. Verizon recently said it would fire 13,000 employees from its land line business.
7. Newspapers. The layoffs in newspapers began in the 1980s as presses became more automated and tens of thousands of pressmen lost jobs. More recently, the changing habits of news consumption have increased Internet readers and hurt print, which has caused more job losses in press rooms. Reporters and editors have lost work as print subscribers have stopped paying for what they can get online for free. One recent study claims that the newspaper industry employee base fell from 767,000 jobs in 1998 to 619,000 jobs in 2008. The U.S. Department of Labor has forecast another 120,000 newspaper layoffs over the next 10 years.
8. Airlines. The number of pilots, flight attendants and ground crew workers is shrinking as consolidation and the recession have hurt the industry badly. Mergers in the last two years, between Delta and Northwest and United's merger with Continental, have decreased the number of large carriers in the U.S. by half. The Bureau of Transportation Statistics reported that the number of airline employees in the U.S. has fallen by 25% since 2001. And the latest merger firings have not yet been announced. Jobs for pilots and flight engineers fell by 30.4% in the third quarter of 2009 to 96,000 from 138,000 jobs in 2008, according to the BLS.
9. Realtors. The National Association of Realtors reports that there were 1,370,758 realtors in October 2006 -- the peak of the market. By the end of 2007, the figure was below 1.2 million. The number is below 1.1 million today and has continued on a downward trend. Home prices have dropped so far and so few homes are sold, that the ability to make money in the business disappears by the day.
10. Bank Tellers. Long before the recession, personal banking had begun to become automated. Over the last decade, banks have provided increasing access to banking accounts online, through call centers and at ATM kiosks. This technologically driven shift has been and will continue to be the chief cause of bank teller layoffs. According the the FDIC, since 2008, at the beginning of the recession, there have been 283 banks closed. Compared to the period 2000 to 2007, when only 27 banks closed, that's nearly 10 times as many bank closings in less than half the time. And as of Aug. 20, state and federal regulators had closed118 banks this year, making it on pace to exceed the 140 banks closed in 2009. Although nearly all of these banks have been acquired by other financial institutions, bank branch closings still occur -- employees and locations are consolidated. The single largest employee group at bank branches are bank tellers, and they will bear the brunt of the continued cost-cutting.

Saturday, September 4, 2010

5 No-Nos When Working at Home

By Liza Porteus Viana

Working at home may seem like a dream to many, but in reality it takes strong dedication and often restraint from being drawn into the many potential distractions that come with it.

Here are five things NOT to do when trying to be a productive home-office worker.

No. 1: Cleanliness is Next to Productiveness
Do NOT keep your office and desk space a mess – it’s a major distraction and the clutter will just provide an excuse for you to clean instead of work.

No. 2: Don’t Do “Home Work”
Do NOT get distracted by household chores, personal errands, etc. It can be so easy to get dragged into washing the dishes in the sink, doing the laundry or cleaning up the kids’ toys instead of returning work phone calls, but give those chores a certain time of day to get done. Don’t let it cut into your valuable work time.

No. 3: It’s Not Social-Networking Hour
As valuable as Facebook and Twitter may be to building your brand, do NOT fritter away your work time hunting down old flames, a former nemesis or others on such sites. That goes for getting caught up on personal e-mails, as well.

“You need every minute of your office hours and you have no time to waste on distractions and disruptions,” said Heather Allard, founder of TheMogulMom.com who started three businesses out of her home since 2001.

Added Leslie Truex, author of The Work-At-Home Success Bible and founder of Workathomesuccess.com: “Shuffling papers, reading e-mail and posting on Facebook have a part in running a business, but if not managed will waste time and money.”

No. 4: Location, Location, Location
Do NOT place your office in the middle of your house. While some may say working from the kitchen table works for them, most work-from-home experts agree that a separate room with a door is necessary if you plan to be productive.

No. 5: Make Plans to Make Time
Do NOT work without a plan – that includes routines and schedules just as importantly as a business plan. Plans also help avoid having the personal life bleed into the work one, and vice versa. A daily plan should include when to go out for lunch or throw the laundry in.

“Extra time to ‘work’ doesn't magically appear. People who work-at-home need to make time for work and for play,” Truex said.

  

Wednesday, September 1, 2010

Ninth Circuit Holds NPDES Permit Required for Logging Roads

8/18/2010

On August 17, 2010 the United States Court of Appeals for the Ninth Circuit held that a National Pollution Discharge Elimination System ("NPDES") permit is required for stormwater runoff from logging roads. In NEDC v. Brown, No. 07-35266, three judges decided a case involving two long-existing public roads that enter the Tillamook State Forest and are used for logging, among other things. NEDC asserted that the defendants should be required to obtain an NPDES permit for stormwater runoff from the roads because the sediment in the stormwater is a pollutant under the federal Clean Water Act ("CWA").

The CWA requires an NPDES permit for the discharge of any pollutant to any navigable water from any point source. The CWA distinguishes between point source discharges of pollutants and non-point source pollution. Non-point source pollution, which is not defined in the CWA, includes any source of water pollution not characterized as a point source discharge. Since 1973, rules promulgated by the Environmental Protection Agency ("EPA") have distinguished between point source and non-point source pollution. Included in these rules is the so-called Silvicultural Rule found at 40 C.F.R. § 122.27(b)(1), which has remained stantially in its current form since 1976. The Silvicultural Rule specifically defines timber "harvesting operations, surface drainage, or road construction and maintenance from which there is natural runoff" to be "non point source silvicultural activities" excluded from NPDES permitting requirements.

NEDC argued that the ditches and culvert system associated with the forest roads constitute point sources that discharge into forest streams and rivers. The U.S. District Court for the District of Oregon held that the discharges of which NEDC complained were exempt from permitting under the Silvicultural Rule. The Ninth Circuit disagreed, holding that stormwater runoff that is collected and channeled in a system of ditches and culverts before being discharged into streams and rivers constitutes a point source, and that EPA lacks authority to promulgate a rule to the contrary.

The defendants had also argued that no permit is required for forest road stormwater runoff pursuant to EPA's rules promulgated under section 402(p) of the CWA. Section 402(p) requires EPA to promulgate stormwater runoff permitting requirements in two phases. In phase I, EPA promulgated rules for permitting stormwater runoff discharges from industrial activities and certain municipal systems. EPA's rule defines "industrial activity" and specifically excludes activities described in the Silvicultural Rule. 40 C.F.R. § 122.26(b)(14). The Ninth Circuit rejected this EPA definition of industrial activity and found that logging is an industrial activity as that term is used in section 402(p). EPA's rules apply the stormwater permitting requirements to "immediate access roads and rail lines used or traveled by carriers of raw materials, manufactured products, waste material, or by-products used or created by the facility." 40 C.F.R. § 122.26(b)(14)(ii). For guidance on the meaning of "immediate access roads" the Ninth Circuit looked to EPA's preamble for this rule, which indicates that immediate access roads means "roads which are exclusively or primarily dedicated for use by the industrial facility." 55 Fed. Reg. 47,990, 48,009 (Nov. 16, 1990). The court then concluded that logging roads fall within this description because, but for logging, the roads would not have been built (note that the district court never made such a factual finding or even heard evidence relevant to such a finding). On this basis, the Ninth Circuit held that logging sites are industrial facilities and that logging roads are immediate access roads subject to the NPDES permitting rules under section 402(p) of the CWA and that "EPA is not free to create exemptions from permitting requirements for such activity."

The court's decision has potentially sweeping implications. First, combined with the Ninth Circuit's opinion in League of Wilderness Defenders/Blue Mountains Biodiversity Project v. Forsgren, 309 F.3d 1181, 1184 (9th Cir. 2002), this opinion appears to leave the Silvicultural Rule with little potency. Second, if broadly read, this opinion would require NPDES permits for every road in the country that is served by ditches or culverts that eventually discharge to natural surface waters and that is not already regulated by the CWA.

The court's opinion also leaves many critical questions unanswered. Even if the opinion were limited to logging roads, what constitutes a logging road? Contrary to the court's assumptions of fact, many forest roads, including the roads at issue in this case, are not dedicated to logging. Who is responsible for obtaining the necessary permits? The defendants in this case sued the Oregon State Forester and the individual members of the Oregon Board of Forestry in their capacity as administrators of the state's forest roads, but they also sued four timber companies that had purchased timber from the state from areas served by the roads. The court did not address whether the permit obligation rests with the owner of the roads or every entity that transports logs on the roads, or even those using the roads to access the forest for recreation. Clearly this opinion requires EPA and the states to adopt rules to provide for permitting discharges from logging roads, but the court does not provide any guidance on how discharges from existing roads should be managed in the interim before permits can be issued. Unlike some activities subject to CWA permit requirements, discharges from existing roads cannot be stopped while waiting for a permit. The court also ignores the extraordinary work that may be necessary to bring existing roads into compliance with such permits. So once again, the Ninth Circuit has turned our understanding of the CWA upside down, and left EPA and the public to sort it out again.

If you have any questions about the issues of this update, please contact:

Greg Corbin at (503) 294-9632 or gdcorbin@stoel.com
Louis Ferreira at (503) 294-9412 or laferreira@stoel.com
Mark Morford at (503) 294-9259 or jmmorford@stoel.com
Per Ramfjord at (503) 294-9257 or paramfjord@stoel.com






Related materials:
U.S. Court of Appeals 2010 Opinion
Northwest Environmental Defense Center Opening Brief
Natural Resources Defense Council Amicus Curiae Brief
U.S. Amicus Curiae Brief
Northwest Environmental Defense Center Reply Brief
Oregon Forest Industries Council Response Brief
State's Response Brief



Biomass Credit Update: A Look at BCAP’s Past and Future Impact

http://www.palletenterprise.com/articledatabase/view.asp?articleID=3200