As the RTMA advances its program of strategic growth, manufacturing innovation, workforce development, access to markets, and political advocacy, it is seeking like-minded manufacturers to share in the resources and benefits the RTMA Provides. On July 20th, the RTMA will be hosting membership prospects at a Golf Clinic at Ridgemont Country Club. It will be an opportunity to mix with RTMA Members and learn about the RTMA Programs and Services.
We will be asking RTMA Members to attend and bring at least one decision maker from other manufacturing companies as interested prospects. There will be no cost to those who participate. This is a great opportunity to help stregnthen our numbers, create synergies with new members and enhance our organization.
We will be sending invitations to Members in early June. We look forward to a successful event and your involvement in growing the RTMA.
RTMA KeyNote Address:
Get Better Outcomes with RTMA Benefits
The RTMA has been implementing its benefits program to assist Members with growth, innovation, and collaboration. It continues to lobby for balanced trade and corporate tax reform at the federal level. At the state level, the RTMA is a member of the Manufacturers Alliance, which lobbies for the business position on workman's compensation, clean energy standards, and workforce development.
We have presented topics at monthly meetings on strategic growth, manufacturing technology, and economic development incentives. Through the RTMA's access to marketing's program, members receive requests for quotes on a regular basis.
We are partnering with RIT's Center for Sustainability, the Saunders College of Business, and Monroe Community College to provide access to and deliver education and training, as well as sustainability and innovation.
We continue to provide a resource with the RTMA Private Health Care Exchange which is saving participating members thousands of dollars and providing first rate plans. We provide a workman's compensation plan that is highly competitive and has a strong history of performance. Our placement program facilitates the hiring of key personnel. Networking programs (monthly meetings and golf outings) provide the opportunity to meet and greet other members and entertain customers.
Take advantage of the benefits the RTMA offers. There is something for every member. You have invested in membership, use it to get the better outcomes that are possible.
RTMA regular Member Highlight
Based in Edicott, NY Datum is thel argest global supplier of precision stainless steel sheet and foil for stencil manufacture in the electronic undustry as well as for small parts and other components produced by laser cutting and etching. We stock material from 0.0008" to 0.020" gauge with flatness specification of 0.040" and gauge tolerance of 2%.
Our latest acquisition is a specialized milling system that allows us to micro-profile thinshe ets and foils to an accuracy of 5 mm in any shape for applications such as stepped stencils, micro heat exchangers, and specialized shims. We would welcome opportunities to partner wtih RTMA Members in delivering this niche capability to new applications.
RTMA Associate Member Highlight
Rochester Steel Treating Works, Inc. is pleased to annouce the addition of a brand new vacuum furnace, along with upgrades to an existing vacuum furnace. Beginning in March, these improvements will enhance capacity and turnaround for annealing, hardening, age hardening, normalizing, and stress relieving processes. We look forward to continuing to provide high quality commercial heat treating services for the Greater Rochester and Western New York manufacturing community.
A Tax cut might be nice. but remember the deficit.
By: N. Gregory Mankiw
In the debate about federal tax policy, one question looms large: Should we have a tax cut that increases the budget deficit?
President Trump says he wants “a massive tax cut … maybe the biggest tax cut we’ve ever had.” But the Senate majority leader, Mitch McConnell, who is clearly worried about the growing national debt, says tax reform
“will have to be revenue-neutral.” The stage is set for another Republican showdown.
Democrats, meanwhile, are likely to sit this one out. The Senate minority leader, Chuck Schumer, argues that passing a tax bill is going to be hard until the president releases his tax returns. Don’t hold your breath.
Mr. Trump wants to cast himself in the role of a tax-cutting Republican president, along the lines of Ronald Reagan and George W. Bush. But before drawing a comparison with these predecessors, let’s recall the
economic circumstances they faced.
When Mr. Reagan moved into the Oval Office in January 1981, the economy had recently experienced a recession. The recovery was just six months old. Unemployment was still elevated at 7.5 percent.
Worse yet, another downturn was on the horizon. Within six months, the economy would again be in recession. Unemployment rose to 10.8 percent at the end of 1982, its highest level since the Great Depression.
In August 1981, Mr. Reagan signed into law a bill that phased in tax cuts over three years. These cuts helped usher in a robust recovery. By the end of 1988, as Mr. Reagan was leaving office, the unemployment rate had fallen to 5.3 percent.
To be sure, these large tax cuts, together with the deep recession, reduced government revenue and led to sizable budget deficits. Later in his administration, with the economy in better shape, Mr. Reagan agreed to some tax increases to shrink the deficit. And when he and Congress took up the task of tax reform in 1986, they aimed to make it revenue-neutral. Lower rates were achieved by closing loopholes.
When George W. Bush became president in January 2001, he faced a situation that, in some ways, was similar to that of 1981. (Disclosure: I was one of his economic advisers from 2003 to 2005.)
The economy was heading toward a recession, attributable largely to the bursting of the dot-com bubble. From March 2000 to April 2001, the tech-heavy Nasdaq composite average lost about two-thirds of its value. A recession officially began in March 2001. Unemployment rose from 3.9 percent at the end of 2000 to 6.3 percent by the middle of 2003. Without the tax cuts President Bush signed into law, unemployment would have probably gone higher.
The Reagan and Bush tax cuts combined the logic of supply-side economics and of Keynesian stimulus. Supply-siders argue that lower marginal tax rates give people more incentive to work and invest. Keynesians argue that leaving more money in people’s pockets, rather than in government coffers, increases spending and that greater demand for goods and services expands employment. When the government enacts deficit-financed tax cuts, the two channels can work simultaneously.
Yet Mr. Trump faces a vastly different set of circumstances. The economy has not experienced a recent recession. The recovery from the financial crisis and Great Recession of 2008-2009 is now eight years old.
Moreover, there is no sign we are heading into another recession. Over the past year, unemployment has fallen from 5.0 to 4.3 percent, and the stock market is up about 20 percent. Some firms are complaining about labor shortages.
The Federal Reserve is responding to these events by raising interest rates. It believes, correctly in my judgment, that incipient inflation is a greater risk than recession. Keynesian pump-priming is not what the economy needs now.
The main macroeconomic problem the nation faces is slow productivity growth, which in turn leads to slow growth in average incomes. Increased budget deficits would only make this problem worse. They would cause the Fed to raise interest rates even faster than otherwise. Higher interest rates would discourage capital investments, further depressing productivity.
In short, Mr. Trump finds himself not in the position of Ronald Reagan in 1981 or George W. Bush in 2001 but rather of Ronald Reagan in 1986. He should follow the Reagan of the later period and aim for revenue neutrality. He should broaden the tax base, lower rates and reform the tax code to promote saving, investment and growth.
A key question is how revenue neutrality is to be judged. Traditional analyses of the effects of tax proposals rely on what is known as static scoring, a method based on the simple but dubious assumption that changes in the tax code do not alter the path of national income. An alternative approach, called dynamic scoring, accounts for the possibility that lower tax rates will promote growth.
Dynamic scoring is potentially more accurate, but it is also more easily abused by those who want to promote their policies with an unhealthy dose of wishful thinking. Tax cuts rarely pay for themselves. My reading of the academic literature leads me to believe that about one-third of the cost of a typical tax cut is recouped with faster economic growth.
Of course, not all tax cuts are typical. One virtue of dynamic scoring is that it would apply a different discount to different tax changes. For example, research suggests that modest reductions in the corporate tax rate would most likely be the most self-financing, while increases in the standard deduction would probably do little to improve incentives and promote growth.
When judging revenue neutrality, policy makers will need to rely on a credible, impartial arbiter, like the Congressional Budget Office. In this era of alternative facts, it would be far too easy to pass irresponsible tax cuts and hand the bill to future generations.
Republican Tax-Cut Dreams On Hold As Lawmakers Grow Frustrated with Trump
By: Billy House and Sahil Kapur
House Republicans are growing frustrated with the lack of any details about the Trump administration’s tax plan, as the slow pace leaves lawmakers in limbo in their negotiations over how to deliver on long promised tax cuts.
Republicans in both chambers are leery of getting out ahead of the White House, but a member on the tax-writing Ways and Means Committee said the prospect of a detailed White House plan emerging soon was akin to the chances of spotting a unicorn.
The pessimism on Capitol Hill stands in sharp contrast to President Donald Trump’s public promises.
“Our tax bill is moving along in Congress and I believe it’s doing very well,” Trump said Thursday after announcing that the U.S. would pull out of the Paris climate deal.
But no tax bill has been introduced -- or even circulated -- and Republicans who strongly support Trump and are desperate to advance some kind of tax bill fret that the White House is falling far behind. The White House’s only public contribution to the debate has been a one-page outline released in late April that included trillions of dollars in individual and corporate tax cuts that would explode the deficit and lacked details on how to pay for them.
White House economic adviser Gary Cohn wouldn’t say Friday during a Bloomberg TV interview when a detailed tax plan would arrive. He said the White House is “actively engaged”
with House and Senate leaders to craft a consensus plan so there’s “uniform buy-in” by the time it’s released, and added that the White House is working as hard as it can to complet the task by the end of 2017.
In a separate interview Friday on Fox Business, Cohn indicated a timeline for a White House proposal: “We will have a very detailed, drafted tax plan to be delivered to Congress by when they get back from the August recess,” he said.
The Republican lawmaker on the Ways and Means panel, who spoke on condition of anonymity, said there have been lots of meetings between White House officials and key lawmakers, but the Trump administration’s approach so far feels like amateur hour.
The lawmaker said the conversations have mostly involved educating the White House and Senate about the House proposals, which include a controversial border-adjusted tax on imports championed by House Speaker Paul Ryan. The lawmaker said he was hoping to see details this week on an emerging White House plan, but officials said there is currently no plan for the White House to present anything.
The Trump administration and top Senate Republicans have made clear they don’t favor the border-adjusted tax proposal, as well as other components of the House GOP blueprint. But they haven’t proposed alternative mechanisms to offset their plans to cut personal and corporate tax rates.
“No one wants to make clear what the tax plan will look like,” said Representative Dave Brat of Virginia, a conservative who is chairman of the Small Business Subcommittee on Economic Growth, Tax, and Capital Access.
Brat said he has asked during recent House Republican meetings for a vote count on the border-adjusted tax, also known at BAT, "because we cannot wait for three weeks and then find out that that is a poison pill and come up $1 trillion short."
Jonathan Traub, a former staff director for Republicans on the Ways and Means Committee who is now a managing principal at Deloitte Tax LLP, said, “It is becoming clearer to House leaders that the border-adjusted tax is not going to become law.”
‘No Plan B’
“There’s some frustration that there’s no Plan B that anybody else has yet developed,” Traub said. “The House is frustrated that the White House and Senate keep taking shots at the BAT” but then don’t propose a way to prevent tax loopholes or avoidance strategies, he said.
Under rules that Senate leaders plan to use to pass a tax bill with only a simple majority, the legislation would have to be revenue-neutral for its changes to be permanent.
“I’m a little confused as to what the endgame is on these efforts by the House, Senate and White House to get on the same page on reform,” Traub said. “I’ve not seen visible signs that they’re closer to a deal than they were a month ago.”
The crowded congressional calendar will also reduce the time available to work on a tax bill. Senate Republicans are prioritizing health-care legislation, which may not finish by the August recess. After the break, Congress faces deadlines to avert a government shutdown, raise the debt limit and extend expiring programs like the Children’s Health Care Program. It also needs to agree on spending levels before proceeding to the vehicle for a tax bill.
‘Not Trump’s Specialty’
Many key Senate Republicans are waiting for the White House to lay out some of its parameters. House Ways and Means Chairman Kevin Brady, meanwhile, is exploring an alternative plan, according to the lawmaker on the panel, but he isn’t willing to unveil the details yet because it could spark a backlash from the White House and Senate Republicans.
Arthur Laffer, the influential supply-side economist, defended Trump’s slow decision-making on the details of a tax plan.
“It is not Trump’s specialty area,” he said. “I think he’s doing a great job of trying to adjust to new information.”
The Question isn't why wage growth is so low. it's why it's so high.
By: Neil Irwin
One of the economy’s biggest mysteries is this: The labor market is the strongest it has been in a decade, yet wages are rising barely faster than inflation.
For some reason, the booming job market and ultralow unemployment rate, which fell to 4.4 percent in April, haven’t led employers to raise pay in a meaningful way. That flies in the face of a basic assumption of how the economy works: A tight labor market is expected to lead to pay increases that in turn fuel broader inflation.
But the mystery of the missing pay raises may have a surprisingly simple solution, and one that sheds light on the larger economic challenges of our age.
Consider a simple model for how much the average worker’s pay ought to be rising: You could simply add together the productivity growth rate — how rapidly the output generated by each hour of labor is increasing — and the inflation rate, which tells us how quickly prices are rising.
Over the last 24 months through March, inflation has come in at 1.4 percent a year, and productivity growth at 0.6 percent. Those are very low numbers. And in our supersimple model, you may expect average worker wages to have risen only 2 percent.
In fact, the average hourly earnings for nonmanagerial private sector workers rose 2.4 percent a year in that period. You may not feel like cheering about that, but it’s more than we might have expected, with inflation and productivity so weak. The real mystery, then, isn’t why wages are rising so slowly, but why they’re rising so fast.
If anything, the numbers show that workers are capturing more than their share of the spoils from a growing economy. And that, as it happens, is the reverse of a decades-long trend. For most of the last half-century — 84 percent of the time since 1966 — average wages have grown more slowly than would be predicted based on productivity and inflation growth. The rise in the share of employee compensation that takes the form of health benefits instead of wages is a factor, but doesn’t explain the whole gap; for long stretches, that gap exceeded 2 percentage points a year.
That means the labor share of national income was shrinking, or, more plainly, that workers’ slice of the economic pie got smaller while the part taken by shareholders and other owners of capital grew.
In the last few years, though, that trend has partly reversed: Workers’ slice of the pie has increased a bit. More than at any time since 1970, wage gains in the two years through June 2016 outstripped the gains predicted by inflation and productivity in our simple model.
Why? Minimum wage increases in several states probably contributed. Obama administration efforts to shift the playing field toward workers may have helped, too. But we don’t know whether this is a temporary blip or the beginning of a trend, in which employee paychecks will swell with a greater share of the fruits of economic growth.
Surely, the low unemployment rate is an important factor. Economic theory tells us that when workers are scarce, employers have to raise wages, though it hasn’t always worked out that way: Wage growth underperformed productivity and inflation during some periods of low joblessness, including in the mid-1980s and mid-2000s.
Indeed, economists at Goldman Sachs recently studied which factors drive wage trends in 10 major economies, and identified low productivity growth as the main culprit behind the recent weakness in wage numbers around the world. (Low inflation, Jan Hatzius and Sven Jari Stehn found, has been “a negative but more temporary factor.”)
Recently, labor costs have begun to grow faster than revenue for some companies, which attribute that development to a mix of government policy and general good times.
“While food costs are pretty benign, you are seeing, certainly in some markets, some pretty good inflation rate in wages,” said Patrick Doyle, the chief executive of Domino’s Pizza, in a recent conference call with analysts. “Some of it is a result of the minimum wage, but some of it is simply because there are areas in the country where employment levels are strong.”
Even if we don’t have complete answers, that much is relatively straightforward. But the wage question quickly leads us into more difficult economic questions.
Everything in macroeconomics is linked, though not in ways that are fully understood. The relationship between joblessness and inflation is known as the Phillips curve, for example, and it points downward: The lower the unemployment rate, the higher the inflation rate should be.
Or at least that’s the theory, and one that is a starting assumption for a great deal of policy making. The Federal Reserve Board reckons it can’t let the unemployment rate get too low, or a burst of inflation will come. In reality, though, the relationship between unemployment and inflation is not straightforward and seems to be always moving.
Even less is known about the ties between wages and productivity. This is particularly important if, as our analysis of wage trends suggests, low productivity growth is the culprit behind Americans’ small inflation-adjusted pay increases during the last few years.
One way of thinking about productivity growth is that it is rooted in unpredictable innovations that have little to do with anything else in the economy. Say a genius inventor creates a robot that mows your lawn perfectly. Human landscapers might lose their jobs, but if they find something worthwhile to do, the productive capacity of the economy will grow.
The causation could go in other directions, however: Wage growth, or the lack of it, might affect innovation and productivity. Perhaps if businesses pay their employees as little as possible, for example, those companies will lose the incentive to train and develop more productive workers. Some employers, including the mega-retailer Walmart, have examined this problem and found that by paying somewhat more in wages, they get a more productive work force.
That suggests that the productivity slump could be a result of businesses that have failed to pass on the gains from a growing economy to their workers for decades. Some left-of-center economists are exploring whether a higher minimum wage or a stronger social welfare system might increase productivity growth and the supply of labor.
Unfortunately, the picture isn’t entirely clear. The process by which businesses and their workers become more productive is something of a black box, deeply important yet not really understood. But perhaps we can at least ask better questions: The real mystery isn’t why wage growth is so low, but why productivity is so low. And solving it could leave both workers and their bosses better off.
Unemployment sank to 4.3 percent in May, its lowest level in 16 years, the government reported Friday, but halfhearted wage growth and a shrinking labor force revealed the economy’s stubborn weak spots.
While the downsides sent bond prices lower, the report is unlikely to deter the Federal Reserve from raising interest rates when its policy makers meet in Washington this month. “It is not enough to derail the Fed at all,” said Dan North, chief economist at the credit insurer Euler Hermes North America.
The milestone on the jobless rate came with a middling increase of 138,000 in payrolls and revisions that reduced the gains in the previous two months. It mainly reflected a decline in the share of working-age adults who have a job or are in the market for one.
The judgment of what constitutes strong or tepid job growth has shifted as the expansion ages. With more baby boomers retiring each year, economists estimate that the monthly addition of roughly 100,000 jobs should be enough to absorb those entering the work force, including newly minted graduates.
“Even though job growth slowed, it’s still well above where it needs to be to keep up with the working-age population growth,” said Jed Kolko, chief economist at Indeed, an online recruiting site. “It’s inevitable that we would start to see a slowdown in the payroll numbers. Month-after-month job gains in the 200,000 range are not sustainable longer term. The working-age population is growing too slowly to support that.”
Only twice in the last eight months has that 200,000 figure been reached; the average over the last three months has been 121,000. Analysts are split on whether the slower pace is a sign of the labor market’s tightness or its slack. Those who believe the economy is reaching full capacity, or is already there, argue that there are just not that many available workers left.
“Since 2012, this has been a tremendous period of steady, solid job growth — historic in many ways — that has slowly absorbed most if not all of the underemployed and unemployed people last year,” said Alan MacEachin, chief corporate economist at Navy Federal Credit Union.
Employers continue to complain about how difficult it is to hire workers. “We have 50 to 60 openings in Pennsylvania and probably close to 100 openings across the country,” said Mark Traylor, president of the Ames Companies, whose wheelbarrow factory in Harrisburg recently played host to President Trump.
“We’ve really had to change our tactics of how we source associates,” Mr. Traylor said. His company has begun working with high schools and community colleges to interest students in entry-level manufacturing and distribution jobs — paying about $15 an hour — which have been particularly hard to fill.
Skeptics argue that if the labor market were truly stretched, wages would be rising faster. Instead, year-over-year wage growth has declined since the end of last year to 2.5 percent, just a nose in front of inflation.
“That’s more of a softening than a tightening story,” said Jared Bernstein, who was chief economic adviser to Vice President Joseph R. Biden Jr. early in the Obama administration.
The skeptics included bond traders who drove yields down on Friday, betting that even if the Fed goes ahead with a rate increase this month, it will think twice about further moves in the second half of the year.
Also troubling is the decline in overall participation in the labor force, which has trudged along below 63 percent during the recovery, compared with more than 66 percent before the recession. Some of the tiny gains that had been made were knocked off in May, showing more people were dropping out of the labor force than returning.
“That’s always ugly,” said Mr. North, the Euler Hermes economist.
Moreover, he added, those who have been out of the job market for a while or lack up-to-date skills may have less bargaining power when they re-enter. Low wages and fluctuating schedules have also sown anxiety among many Americans.
Among political leaders, responses predictably split along partisan lines.
“We’re not worried about slowing job growth,” Gary D. Cohn, director of the White House’s National Economic Council, told CNBC. He pointed out that the Labor Department’s broadest measure of unemployment, which includes part-time workers who would rather have full-time jobs and those too discouraged to search, dropped to 8.4 percent, its lowest level since 2007.
By contrast, Representative Nancy Pelosi of California, the House Democratic leader, said, “May’s jobs report is a sobering wake-up call for President Trump and House Republicans, who continue to push a disastrous agenda that targets hard-working American families and endangers economic growth.”
Job recruiters continue to see a divergence in the fortunes of workers with advanced skills and those without them.
“The hiring for very specific skilled and highly skilled workers is at an all-time high right now,” said Jim Guerrera, managing director at SC Novi in Michigan, a recruiting firm specializing in the industrial and automotive sectors. “But people who don’t have a differentiated skill set are having a harder time finding a position.”
He said that while large corporations were willing to train workers, smaller firms were more wary. “Less and less people are willing to train,” Mr. Guerrera said. Younger people tended to change jobs more frequently in the past, he said, so companies do not want to make the investment only to see their new hires leave in a couple of years.
Sectors with the largest gains included health care, professional and business services, leisure and hospitality, and mining.
The government — once a pillar of steady, middle-class employment — shrank by 9,000 jobs, while the retail sector lost more than 6,000. During much of the recovery, retail could be depended on to churn out more jobs. But it has disappointed in 2017, with heavy losses. This week, the clothing company Michael Kors announced that it would close 100 to 125 stores in the next two years.
“Retail isn’t dying, but traditional retail is dying,” Mr. North said. “There is creeping Armageddon for brick and mortar.”
The transformation of the retail business wrought by online commerce has caught the attention of employers across sectors. “There’s an overriding concern with everybody I talk to,” said Frank Friedman, chief operating officer of the international accounting and consulting firm Deloitte. “How is technology going to disrupt — if at all — my business?”
The RTMA is offering subsidized MasterCam Training. We are implementing this program with OptiPro, which is a certified reseller and training facility for MasterCam.
OptiPro has agreed to reduce their standard pricing by 25% for participating RTMA Members. The RTMA will subsidize half of the remaining cost up to a cap of $1,000 per company, and the participating company will contribute the other half.
For example, if a course is normally $1,000, it would be reduced 25% by OptiPro for the RTMA. It now becomes a cost of $750. The RTMA would pay $375 (half), and the member’s cost would be $375 (the other half). The benefit is that the member is receiving a $1,000 course for $375.
The RTMA will pay half of the course costs up to $1,000 cap per company, not per student. Any overage is the responsibility of the RTMA Member.
Please note, that the prices are standard, and would be discounted 25%.
The following classes are being offered within the next 30 days:
Mastercam Mill Beginner Group Class 4-Day Course – June 5th, 6th, 7th & 8th (Monday, Tuesday, Wednesday & Thursday)
Mastercam Lathe Group Class 3-Day Course – June 13th, 14th & 15th (Tuesday, Wednesday & Thursday)
Mastercam Mill 3D Advanced Group Class 3-Day Course – June 27th, 28th & 29th (Tuesday, Wednesday & Thursday)
If interested, contact Lynda Bechtold at OptiPro Systems. She can be reached at:
RTMA Upcoming Events
June Golf Outing
When: Monday, June 19th, 2017
Where: Ridgemont Country Club
Click the logo below to view our Social Media Page!