John O. Harney: Powering a slow recovery

The economic recovery  from the Great Recession is not jobless as economists once warned, but it is slow and uneven. Every month, the Hamilton Project at the Brookings Institution reports on the number of jobs the U.S. economy will have to create to return employment levels to where they were when the Great Recession began in December 2007, while absorbing people who enter the potential labor force. At the end of May, this jobs gap was 3.6 million. If the economy adds about 191,000 jobs a month—the average monthly growth rates since the jobs recovery began in March 2010 — the gap will not close until August 2017.

Meanwhile, in a recent study by the Federal Reserve, nearly half of Americans say they either could not cover an emergency expense costing $400, or would cover it by selling something or borrowing money.

The jobs recovery has been one of the measures that has preoccupied the New England Economic Partnership (NEEP) in recent years.

NEEP is a member-supported nonprofit that provides economic analyses and forecasts. Historically, NEEP published macroeconomic forecasts of the New England region and its six individual states and held semi-annual “Outlook” meetings packed with colorful content about the economy in our backyard: which industries and occupations are expanding, which are shrinking and so forth.

The meetings used to begin with a national context set by big economists such as Moody’s. This was typically followed by state-specific forecasts from New England academic and corporate economists who volunteer to offer a report focused on each state’s economy, but tied to the particular conference theme: in the case of spring 2015, energy. The forecasts always rated a short report in the big daily New England newspapers and AM radio news—mainstays of taking the region’s economic pulse.

But these are somewhat leaner times for the economists' organization that always was a bit unsung. Last year, NEEP decided to do only one forecast per year, though forecast managers offered to do their own updates for this special conference focused on "Building the Backbone of Energy Efficiency" and held in June at the Federal Reserve Bank of Boston. The spring 2015 conference was co-sponsored by the Massachusetts Business Roundtable and Brandeis International Business School, the latter of which has become something like NEEP’s guardian since the New England Council (NEC) ended a short-lived sponsorship in 2013, and Brandeis Prof.  John Ballantine became NEEP president. (The NEC, meanwhile, in partnership with Deloitte Consulting LLP, published a study on the promise of New England’s advanced manufacturing sector to provide jobs to middle-class workers.)

This year, NEEP broke with tradition, skipping the usual national forecast and going straight to the energy theme and the always-informative state forecasts—but this time without one of the six states: Rhode Island.

The energy discussion featured talk of a perceived abundance of oil and gas, much of it drawn from shale, as well as ambivalence about fracking, interest but underachievement on renewable resources and dreams of more pipelines.

New England’s energy prices have long been among the highest in the U.S. All six states rank in the top 10 nationally in terms of highest electric rates. Kevin Lindemer, managing director of IHS Global Insight/Cambridge Energy Research Associates, pointed out that despite so much talk about wind and solar, the region is reliant on gas, which we don’t have enough of, and nuclear, which we have a love-hate relationship with. Indeed, Maine and Vermont each closed nuclear power plants in recent years.

The spring 2015 state gigs were done by: Fairfield University  Prof.-Emeritus Edward Deak (Connecticut); Ryan Wallace of the University of Southern Maine (Maine) in place of his colleague Charlie Colgan (the canny Maine economist whose department's dismissal from the struggling university a year ago was an ominous sign of New England economic uncertainty); Northeastern University Prof. Alan Clayton-Matthews (Massachusetts); New Hampshire Center for Public Policy Studies economist Dennis Delay; and Vermont economist Jeff Carr.

Deak noted that Connecticut has 1.1 percent of the U.S. population, but contributes lower proportions of greenhouse gases. Spurred by fears of climate change, the Connecticut legislature has mandated that 27 percent of the state’s energy be supplied by renewable sources (including solar, wind, hydro, fuel cells and biomass) by 2020. Right now, the renewables portion is less than 5 percent, Deak said.

Deak added that Connecticut’s housing market is still suffering from the distresses of the Great Recession. (Nationally, the Labor Department reported that builders broke ground on new homes in April at a faster rate than at any time since November 2007.)

Wallace reminded the audience that Maine is the nation's oldest state in terms of residents' age and observed that the state is energy-intensive because of its traditional industries of paper (which is in free-fall) and shipbuilding. Fully half of Maine’s electricity comes from renewable sources—hydro, biofuels and wind. The big issue in Maine, Wallace said, is transmission: pipelines and high-voltage power lines to carry energy to and from Maine.

Clayton-Matthews said that while the Massachusetts economy has been outperforming the U.S., youth unemployment is disturbing—nearly 12 percent for people under age 25. And the number of people who want full-time work but have only part-time is more than twice what it was in 2007. Also labor force growth will decline to almost zero by 2018.

Delay reported that the Granite State added jobs, but the problem is job quality: two of three added jobs pay below state average wage. Moreover, Delay pointed out, the Market Basket worker protests of 2014 hit New Hampshire especially hard.

Energy prices in New Hampshire are very volatile, Delay said, noting that what used to be Public Service of New Hampshire is now Eversource. And in an effort to contain energy costs, proposals have surfaced that would pull New Hampshire from the nine-state Regional Greenhouse Gas Initiative designed to reduce carbon emissions.

Carr said that Vermont has very energy-intensive industries form computer chips to famous food businesses including cheese, ice cream, craft beer and coffee. Vermont’s Comprehensive Energy Plan would have 90 percent of the state’s energy use coming from renewables by 2050.

TDI New England wants to build a 1,000-megawatt transmission line to carry electricity generated by Hydro Quebec in Canada to markets in southern New England. The so-called “New England Clean Power Link” would pass under nearly 100 miles of Lake Champlain, and the developer promises to include phosphorus cleanup, habitat restoration and recreational improvements.

“To be competitive in the future, New England must find ways to invest in a flexible grid and a mix of less expensive energy sources—gas, hydro, wind,” said Ballantine. “This requires a coordinated energy policy across the six New England states and investment of billions of dollars to modernize our infrastructure."

Lindemer observed that 60 percent of oil goes into transportation worldwide. Despite all those gas guzzlers you see out there, Lindemar claimed oil and gas are not “exhaustible” like fish and trees, especially with the cost of fracking going down as people learn how to improve the environmentally controversial practice—even pursuing so-called superfracking to crack more and deeper fissures in the earth to release more oil and gas. Talk about cracked.

John O. Harney is executive editor of The New England Journal of Higher Education (nebhe.org), on whose Web site this piece originated.

Robert Scott: Market Basket battle as a Ancient Greek epic play

  NEWPORT, N.H.

A Market Basket movie!? Not as far-fetched as you would think. This is an epic Greek tale. If Aristophanes or Aeschylus were alive, they would be penning a play based on it called monopolion (monopoly). It has all the  elements of a compelling story.

Arthur T. Demoulas, the protagonist, and  the once and future CEO of the supermarket chain, embodies all the values and virtues of the hero or "The Great Man'' that Aristotle wrote about . He has  integrity, humility, kindness and generosity.

He's also a brilliant strategist, a truly inspiring and effective strategos (general) who had not only the loyalty of the stratou (army -- his employees) but their unfading love.  Such love for a leader is a rare thing in 2014 American society.

Yet ATD’s leadership model is not of our mainstream culture but a hybrid creation of Greek-American culture. ATD’s unwavering adherence to the high-minded standards of our grandparents and parents make this amazingly successful and wealthy man in 2014 America; a true “rock star”.  All I can think is how proud they are of him as they look down from above…. Well done, Anthanasios Telemachus.

His cousin Arthur D. Demoulas,  the antagonist, is a figure that seems cast  out of some ancient Greek epic in the image of ploutokrat pelonexia -- one driven to seek power and wealth above all.

Such a figure is reviled in American society but these ancient playwrights made comic sport of them,  Surrounding ASD is the ploutokratia, his elite Ivy League stratou, whose members believe that their education, wealth and privilege  entitle them to dominate the polis (average citizen).

The stage for the epic is set as these two diametrically opposite forces clash to have mono polein (sole control) of this most valuable entity. ASD’s stratou fires the first shot and sacks ATD and his  management team. The ATD stratou erupts and with their massive numerical advantage bring operations to a dead halt. Then they appeal to their customers to come and support them.

What is truly miraculous is that the customers  supported their neighbors, and ATD’s stratou is now not 25,000 but 2  million strong. Xerxes, the Persian emperor, watched in horror as the underestimated Athenian fleet cleaned his clock!

The playwrights would go to town mocking the hubris of elite lawyers, Wall Street bankers and Global 100 Executives in their luxurious air-conditioned offices while calling for the blessings of the gods upon the virtuous employees and customers protesting/ standing tall in the heat of the midday sun. As each side parried and thrust for six long weeks, the fate of millions  hung in the balance. Who will have mono polein? The ASD stratou of  greed or  the ATD stratou , which seeks to preserve the advantages of their beloved Market Basket.

The amount of the lutoros ( ransom) is agreed on and the painful details of the deal are forged against the backdrop of still more  nasty dialogue and hatred in the family,  as the playwrights examine the many foibles and hypocrisies of the elite.

Virtue prevails and the strategos ATD rises like a protathlitis (the champion leader) while the chorus on both side of the stage proclaim .. "nike, nike, nike''  (victory). There is no doubt in my mind that an epic struggle like this would have a play written about it to memorialize the lessons that it teaches us. It would be a way of instructing  our children and grandchildren about this golden moment  when the privilege of the few was destroyed by the unity of the many.

Is that what Gen.  John Stark meant when he said, “Live or Die” as we rejected  the privilege of monarchs and empowered the citizens of New Hampshire? No doubt in his youth he read Aristophanes and those  desires for dignity and freedom found their source.

So, yes,  I’m all in favor for a Market Basket movie. Who would play ATD?. Ah,  Nicolas Cage.

Robert Scott  is a psychologist,  consultant, writer,  Republican Party activist and former  New Hampshire state representative.  He  lives in Newport, N.H.

Robert Whitcomb: All in the family

The Demoulas family fight over Market Basket, the New England supermarket chain they own, has been a spectacle.

Arthur T. Demoulas was ousted in June as the grocer’s chief executive officer by a group led by his cousin Arthur S. Demoulas. The Arthur S. side has demanded much higher dividends and wants real estate owned by the company to be transferred directly to the family. They would rather take a lot more money now than reinvest it in the enterprise. Arthur T. is greedy, too, but not so openly. He’s done some dubious self-interested stuff involving the transfer of company assets. Still, he’s more of a reinvestment guy than is Arthur S.

The drama’s centerpiece has been many employees’ love of Arthur T. The older ones seem to love him the most, in part because of a profit-sharing fund for employees that could get some employees more than $1 million each when they retire. They worry that the Arthur S. side may have other plans for that money.

Arthur T. has paid his people pretty well — for a low-wage industry — e.g., cashiers start at $12 an hour, $4 above the Massachusetts minimum wage. And there are such nice things as Christmas bonuses. But it was Arthur T.’s frequent cozy encounters with his workers that really did the PR trick. He’d go to funerals of members of employees’ families, call employees with problems to see how they were doing, introduce employees to his wife and, all in all, be a highly visible and friendly presence.

He certainly understands the value of being known as a kindly boss — in energizing his work force to be more productive, reducing the costs of worker turnover (in training, etc.) and building customer loyalty. Patrons like to see familiar faces in stores, which is  obviously more likely with low employee turnover. A little niceness goes a long way in hard-nosed American capitalism. Witness the big PR impact of a  corporate monetary contribution to  a popular charity, although cynics might note that the contribution is usually a very small percentage of the CEO' s pay.

Since Arthur T. was ousted, many employees have gone on strike and staged demonstrations to demand that he be rehired. Many have risked being fired. All of this has lost the company many millions of dollars in sales.

“We are a family and they messed with our dad [Arthur T.],” Charlene Kalivas, who has worked for Market Basket for 18 years, told Bloomberg News. Rosa Pereira, a Market Basket deli manager, told the same outlet how at an opening of a new company store, Arthur T. said to her: “Congratulations on our new store. He didn’t say ‘my store’; he said ‘our store.”’ (Of course, the “our” legally means the shareholders, not the employees.)

Family-owned-and-run businesses can have some big strengths. Some studies suggest that they perform better and last longer on average than nonfamily companies, in part because family companies’ leaders worry less about maximizing short-term profits and more about building the company for the long term. A public company CEO is apt to only hold his job for several years and tends to be heavily rewarded for making quick profits.

Still, even closely held companies such as Market Basket are not “families.” They are teams and — in the end — the majority owners  and senior execs will almost always make their calculations based on economic self-interest — maximizing profit, share price and senior executive pay. Obviously, the owners’ and senior execs’ personalities and whether they’re likely to bump into employees on a day-to-day basis can play some supporting roles in the drama. Owners and executives who live far away  understandably care less about inflicting pain on employees than do ones close by.

Workers who entrust their lives to corporate entities make a big mistake. Out of self-respect and to make a living, employees should do their jobs as best they can while realizing that companies are self-interest machines. And bear in mind some advice a new boss gave me a long time ago: “As soon as you have a new job, you’d better start looking for the next one.” We all want someone to take care of us. In the end, that someone must be us. Executives come and go, companies are bought and sold. (Another chain will probably buy Market Basket and lay off thousands to pay off the debt to buy it.)

There may be some comfort in knowing that for those who have 401(k)s and/or old-fashioned pensions, the cold, hard calculation now more dominant in American capitalism than at any time perhaps since the 1920s has expanded their retirement funds even as globalization, automation (automatic checkout machines may ultimately wipe out even most Market Basket cashier jobs) and information technology continue to hollow out the American middle class.

American public policy heavily favors capital over earned income. Those who fully realize the implications of that have done much better than people working long hours at low wages in part because a very rich boss smiles and asks after their families.

Robert Whitcomb, who oversees New England Diary (newenglanddiary.com),  is a Providence-based writer, editor and business consultant, a former finance editor of the International Herald Tribune and a former editor at The Wall Street Journal.