Member Briefing March 12, 2024
Q4 Manufacturing Productivity Rise Driven By Fewer Hours Worked
For the fourth quarter of 2023, the U.S. Bureau of Labor Statistics reported a 3.2% increase in nonfarm business sector labor productivity, alongside a 3.5% rise in output and a slight 0.3% increase in hours worked, marking a 2.6% year-over-year productivity gain and a 1.3% annual rise in productivity from 2022 to 2023. Unit labor costs in the nonfarm business sector edged up by 0.4% due to higher hourly compensation and productivity gains.
During the fourth quarter, the manufacturing sector experienced a modest 1.3% increase in overall productivity, alongside a 2% drop in output and a significant drop in hours worked of 3.3%. The 3.3% reduction in hours worked represents the most significant drop since the historic downturn observed in the second quarter of 2020. Productivity across the entire manufacturing sector increased 0.5% compared to the same quarter in the previous year. Within the durable manufacturing sector, there was a 1% decline in productivity, which was a result of a 4% fall in output and a 3% reduction in hours worked. Conversely, productivity in the nondurable manufacturing sector rose by 3.8%, despite a 3.6% decrease in hours worked, with output remaining stable compared to the previous quarter.
Read more at The Bureau of Labor Statistics
For Equal Pay Day, Racial and Gender Pay Scorecard Ranks How Largest U.S. Companies Stack Up
March 12th is Equal Pay Day—marking how far into 2024 women need to work to make what men earned in 2023 alone. Arjuna Capital, Proxy Impact, and DiversIQ have released the seventh annual Racial and Gender Pay Scorecard, ranking how the largest 100 U.S. companies (as well as companies engaged by investors) stack up on pay gap disclosure and performance.
The 2024 Scorecard highlights companies and sectors that are leading the way, including consumer companies Target and Starbucks that earned perfect scores of A+ due to comprehensive disclosures of median and adjusted pay gaps and annual commitments to conduct and publish pay equity analyses. The consumer and financials/REITs sectors lead in disclosure, with 56 percent and 68 percent of companies, respectively, disclosing pay gap data. That’s compared to only 25 percent of companies in the industrial/materials sectors and 20 percent in the energy/utilities sectors.
Global Headlines
Middle East
- Israel and Hamas: The Latest News – The Guardian
- Palestinians Prepare for Ramadan in the Shadow of Gaza War – Reuters
- Gaza Aid Ship Yet to Leave Cyprus - BBC
- UN Chief Calls for Gaza Truce, Massive Lifesaving Aid Deliveries – Reuters
- IDF Completes Road Across Width of Gaza, Satellite Images Show - BBC
- Israel Checks Whether Hamas Military No.2 Killed in Gaza Strike – Reuters
- Israeli President Sparks Protests in Visit to Amsterdam’s New Holocaust Museum – Politico
- Interactive Map- Israel’s Operation in Gaza – Institute for the Study of War
- Map – Tracking Hamas’ Attack on Israel – Live Universal Awareness Map
Ukraine
- Ukraine and Russia: The Latest News – The Guardian
- Startup Wants To 3D-Print Military Drones On The Front Lines Of Ukraine - Forbes
- Ukraine War Film ‘20 Days in Mariupol’ Among Oscars 2024 Winners - Politico
- Russia's Spy Service Accuses US of Trying to Meddle in Presidential Election – Reuters
- Netanyahu Rejects Biden’s Criticism: Says Most Israelis Support Him - Forbes
- Trump Will Not Give a Penny to Ukraine - Hungary PM Orban - BBC
- Sanders: ‘No More Money to Netanyahu’s War Machine’ - Politico
- Responding to Pope, NATO Boss Says Ukraine Needs Weapons, Not White Flags – Reuters
- Interactive Map: Assessed Control of Terrain in Ukraine – Institute for the Study of War
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
Other Headlines
- Sudan Army General Rules out Ramadan Truce Unless RSF Leaves Civilian Sites - Reuters
- Haiti Spirals to Collapse as Gangs Tighten Grip - BBC
- India Adds Firepower to a Missile Program Focused on China - WSJ
- Greta Thunberg, Other Climate Activists Block Swedish Parliament Entrances - Reuters
- Portugal’s Far Right Comes Roaring Back – Politico
- Argentina Launches $65 Billion Bond Swap to Ease 2024 Debt Load – Reuters
- Nigeria: More Kidnappings are Feared as State Body Prepares Intervention Measures – Africa News
Policy and Politics
Biden Sends $7.3 Trillion Budget for FY 2025 to Congress
President Biden’s proposed budget would boost federal spending to $7.3 trillion next fiscal year and raise taxes on wealthy people and large corporations, in an attempt to cut the deficit while also lowering the costs of prescription drugs, childcare and housing. It is a policy vision that isn’t expected to gain momentum in Congress, but will be a cornerstone of Biden’s re-election campaign. The largely symbolic document, which sets out spending and revenue plans for a decade, typically kicks off debate with Congress over plans for the next fiscal year. But the divided Congress is still straining to approve funding plans for the current fiscal year, which began on Oct. 1, giving the latest set of proposals even lower odds of becoming law in an election year.
The fiscal 2025 budget would cut the deficit by $3 trillion over the next decade, and it would raise taxes by a net total of $4.9 trillion, or more than 7% above what the U.S. would collect without any policy changes. Biden proposes spending $895 billion on defense programs in the coming fiscal year, up from an expected $886 billion this year, amid a series of conflagrations around the world, including Russia’s assault on Ukraine and Israel’s war in Gaza. That increase is one of several that lifts overall outlays by $300 billion from the roughly $6.9 trillion the federal government is set to spend this year.
McMahon: NY’s Post-Pandemic Recovery Hasn’t Been “Full”
Nearly four full years since the COVID-19 lockdown of March 2020, statewide private employment in New York has finally (barely) returned to pre-pandemic levels—but it’s hardly the “full economic recovery” touted by Governor Hochul in a press release. On a seasonally adjusted basis, the latest NYSDOL data pegged New York’s total private employment at 8.34 million jobs in January—slightly above the 8.33 million level of February 2020. However, job gains over early 2020 levels have been far from evenly distributed around the state.
All of the state’s net recovery—and then some—has been concentrated in New York City and the downstate suburbs of the lower Hudson Valley and Long Island, where total employment as of January was up 51,000 jobs (about 1 percent) from the same month in 2020, on a non-seasonally adjusted basis. In the 50 upstate counties, total private employment as of January was still 49,300 jobs below the January 2020 level—continuing a long-term trend in which the metro and rural areas north of the mid-Hudson Valley have fallen further and further behind statewide and national growth trends. Statewide manufacturing employment as of January remained 16,600 jobs below the January 2020 level, a decrease of 3.8 percent during a period when the nation as a whole was adding 177,000 manufacturing jobs (up 1.4 percent).
Read more at The Empire Center
House to Move Ahead With Bill Targeting TikTok as Users Swamp Capitol Hill
The lead sponsors of a bill that would force TikTok’s parent company to divest the popular app or face a ban in the U.S. sent a letter to the company Monday bashing its use of a pop-up notification campaign last week urging users to call Congress about the measure. Reps. Mike Gallagher (R-Wis.) and Raja Krishnamoorthi (D-Ill.), the top lawmakers on the House Select Committee on the Chinese Communist Party, called the “deceptive pop-up” a “new low” for TikTok.
“Using your platform to deceive the American people about bipartisan U.S. legislation underscores the clear necessity of the bill currently under consideration,” they wrote. “Next week, TikTok could be spreading false information about a war. This fall, it could be about our elections,” they added. TikTok sent users a notification Thursday that urged them to call Congress to “stop a TikTok shutdown,” as the House Energy and Commerce Committee prepared to vote on the “Protecting Americans From Foreign Adversary Controlled Applications Act.” The panel advanced the bill unanimously. House Majority Leader Steve Scalise (R-La.) said he will be bringing the bill to a floor vote this week.
Health and Wellness
Smoking Cannabis Associated with Increased Risk of Heart Attack, Stroke
Frequent cannabis smoking may significantly increase a person’s risk for heart attack and stroke, according to an observational study supported by the National Institutes of Health. The study, published in the Journal of the American Heart Association, uses data from nearly 435,000 American adults, and is among the largest ever to explore the relationship between cannabis and cardiovascular events.
The study, funded by the National Heart, Lung, and Blood Institute (NHLBI), part of NIH, found that daily use of cannabis — predominately through smoking — was associated with a 25% increased likelihood of heart attack and a 42% increased likelihood of stroke when compared to non-use of the drug. Less frequent use was also associated with an increased risk of cardiovascular events. Weekly users showed a 3% increased likelihood of heart attack and a 5% increased likelihood of stroke.
Read more at The National Institutes of Health
Election 2024
- Battle for the House: 9 Races that Will Determine the Majority – The Hill
- Trump Ally and Daughter-in-Law Officially Take Over R.N.C. Leadership
- Real Clear Politics Latest GOP Primary Polls – Real Clear Politics
- Real Clear Politics Latest General Election Polls – Real Clear Politics
- Latest Polls - FiveThirtyEight
Industry News
China Doubles Down on Manufacturing, Leaving Real Estate Behind
China revealed last week it aims to spend more than a billion dollars to bolster manufacturing and domestic tech in a bid to remain globally competitive, while divulging little new support for the struggling real estate market. Industrial support clearly ranked first on Beijing’s priority list for the year ahead, according to three major plans released this week as part of China’s annual parliamentary meetings.
One of those reports, from the Ministry of Finance, said the central government would allocate 10.4 billion yuan ($1.45 billion) “to rebuild industrial foundations and promote high-quality development of the manufacturing sector.” While that’s down from the 13.3 billion yuan earmarked for the same category last year, the sector overall gained greater prominence. In 2023, plans to spend on industrial development came second to support for consumption.
A New Wave of Cyber Attacks: Five Actions to Take Now
The National Security Administration and the FBI have recently raised alarms over the growing threat of destructive Chinese cyberattacks on American critical infrastructure. While manufacturers have certainly had their fair share of cyber threats over the years, most notably a recent surge in ransomware attacks, these attacks use different tactics, ones that manufacturers may be unfamiliar with.
Cyber threat actors in China, such as “Volt Typhoon,” are more technically advanced and well-resourced than other cybercriminal or ransomware groups in operation today. They are able to evade existing defenses and sneak inside manufacturers’ networks without being detected, hide inside them for many years, and launch sudden attacks to cripple operational technology (OT) systems. China isn’t the only country doing this. Other foreign adversaries – particularly Russia and Iran – are developing similar capabilities that can be used across critical infrastructure sectors.
Here are Five Actions to Take from IndustryWeek
Congress Passes Final Fiscal Year 2024 Spending Bill for NASA, NOAA and FAA
The Senate passed a spending bill March 8 that combined six separate spending bills, including those for commerce, justice and science (CJS) and transportation. The House passed the bill two days earlier, and the Senate passage came hours before a continuing resolution funding those parts of the government was set to expire. The bill was unchanged from what House and Senate appropriators released March 3. It provides NASA with $24.875 billion for 2024, 8.5% below its original request and 2% lower, even before adjusting for inflation, from what NASA received in 2023.
Other civil space programs in the bill had mixed outcomes. Two ongoing weather satellite efforts at the National Oceanic and Atmosphere Administration, the GOES-R geostationary program and the Polar Weather Satellites program, received their full request of $276 million and $342.4 million, respectively. Passage of the bill has left the industry relieved that uncertainty about spending levels is now resolved, although with some disappointment about what those levels are.
Behind the Alaska Blowout: a Manufacturing Habit Boeing Can’t Break
Months before a piece of a Boeing BA -2.92%decrease; red down pointing triangle 737 blew out midflight, leaving a door-sized hole in its side, the plane spent nearly three weeks shuffling down an assembly line with faulty rivets in need of repair. Workers had spotted the bad parts almost immediately after the plane’s fuselage arrived at the factory, federal investigators have said. But they didn’t make the fix right away and the 737 continued on to the next workstation. When crews completed the repair 19 days later, they failed to replace four critical bolts on a plug door they had opened to do the job, leading to the Jan. 5 accident on an Alaska Airlines flight.
Boeing and federal investigators probing the Alaska Air incident have said the practice of completing work out of sequence is a liability when it comes to airplane quality. Boeing leaders, as they canvass factory workers for insight on where safety is falling short, have said traveled work tops employees’ lists of concerns. The company has said it believes documentation required in the opening of the plug door was never created.
Despite Ongoing Challenges Import Cargo Returning to Normal
Inbound cargo volume at the nation's major container ports remain ton track to show year-over-year increases through the first half of 2024, according to the Global Port Tracker, released on Mark 8. Carriers are avoiding the Red Sea and the initial surge in shipping prices and delays is subsiding, Hackett Associates Founder Ben Hackett said. U.S. ports covered by Global Port Tracker handled 1.96 million Twenty-Foot Equivalent Units in January, the latest month for which final numbers are available. That was up 4.7% from December and up 8.6% year over year.
“Despite the shipping disruptions cause by Houthi rebels in the Red Sea, the global trade of consumer goods, industrial materials and bulk commodities continues to flow relatively smoothly,” Hackett said. “Fear of an inflationary impact due to the raised cost of transportation should be alleviated by now. Retailers and their carrier partners are adjusting to the re-routings and new schedules, which add new costs but those can be partially offset by not having to sail up the Red Sea and not having to pay Suez Canal transit costs. This will continue until there is a resolution and freedom of navigation through the Red Sea and Suez Canal.”
Read more at Material Handling & Logistics
OSHA Changes Process Safety Management Standard
The Occupational Safety and Health Administration (OSHA) recently made several major changes to its Process Safety Management (PSM) standard for highly hazardous chemicals, which previously had remained largely unchanged for the last 30 years. Originally issued in 1992, the PSM standard lays out requirements for managing processes involving highly hazardous chemicals above set threshold quantities. It also deals with the technologies, procedures and management practices used in those processes. Among them are steps employers are required to take for compiling process safety information, process hazard analysis and procedures for process operation and for managing change.
OSHA emphasized that the changes were being announced for the purpose of instructing its enforcement personnel about the agency's interpretations of those standards. “This instruction is not a standard, regulation or any other type of substantive rule,” it stressed when announcing the changes. It also explained that employers will find that the most significant changes include the incorporation of existing OSHA PSM enforcement policies into a question-and response-format. The application of these new instructions will further the agency’s goal of uniform enforcement of these standards, OSHA noted.
Attend our OSHA Update Webinar
Mercedes-Benz Fined $439K After Firing 2 Production Workers for Taking Protected Leave
The U.S. Department of Labor announced it has recovered $438,625 in back wages and penalties for two former Mercedes-Benz workers in Alabama whose rights under the Family and Medical Leave Act the agency says were violated. The department’s Wage and Hour Division found Mercedes-Benz U.S. International Inc. illegally fired two production workers after they requested to use FMLA-protected leave. According to the agency, the employees had requested to use FMLA-protected leave because of personal and familial health conditions.
The manufacturing workers were reprimanded and denied monthly attendance bonuses because of absences. Despite the fact that the leaves were protected under the Family and Medical Leave Act, both employes were terminated under the company’s point system. The investigation also uncovered that Mercedes-Benz failed to record and maintain the amount of FMLA leave taken, did not provide notice of FMLA rights and responsibilities, and failed to designate leave as FMLA-qualifying when appropriate.
Mack Starts Production of 2nd Electric Truck
Mack Trucks announced that it has begun production of its second battery-electric vehicle, the Mack MD Electric, and delivered units to several customers. Mack delivered the Mack MD Electric to ABF Freight, DC Logistics, Mission Linen and Pronto Freight Ways to begin operations and testing. Mack says the MD Electric is in full production at Roanoke Valley Operations (RVO), in Roanoke Valley, Virginia, where the diesel-powered MD Series is also assembled. The MD Electric, which comes in both Class 6 and Class 7 variants, is based on the MD series chassis, which was released in 2020.
David Galbraith, Mack’s vice president of global brand and marketing reported that in Mack’s Class 8 orderbook, 31% of demand is for straight trucks. “That’s record high for us, and we expect that to continue,” he said. “Medium-duty is reflective of the same activity; for the last few years we’ve seen very high demand.” Galbraith shared that Mack is projecting the market for 2024 at 270,000 heavy-duty units and 112,000 medium-duty units, with spikes projected for 2026.
Why Skilled Automation Engineers Aren't Applying for your Job Openings
That skilled automation expert you desperately need? She’s getting really frustrated with you. Skilled job candidates say it’s taking longer to find work, despite huge numbers of open positions in manufacturing, because hiring companies either don’t know what they want or can’t explain it to candidates. Conducted by Unmudl, an online training platform that works with companies to train prospective hires for skills relevant to manufacturing and logistics firms, the survey’s latest numbers notably differ from previous results, particularly in the length of time job-searchers were taking to find their next position.
“It’s a disconnect from the number of unfilled jobs out there,” Parminder Jassal, founder and CEO of Unmudl said. Previous respondents, she said, had more commonly selected that they had filled out at least 30 applications. Now, though, the mood among applicants has soured, she said: “There’s a lack of confidence about folks.” According to the survey of 481 unemployed job hunters, many are taking longer to find their next job while also sending out fewer applications than previously. the survey found that 42.2% of unemployed job seekers had been looking for a job for six months or longer.