Morning Must Reads: The Challenges of Local Economic Development

This morning's news has some interesting stories on the challenges of local economic development.

The Philadelphia Inquirer reports that regional stakeholders have been scrambling to find buyers for three area refineries slated to close.

ConocoPhillips announced that it would sell or close its nearby Trainer complex in six months. ConocoPhillips' decision came three weeks after Sunoco Inc. said it would exit the refining business, with plans to sell or close its South Philadelphia and Marcus Hook refineries in July. At risk are more than 2,000 union and nonunion jobs.

The current owners of the refineries cite declining domestic demand and oil and gas refined more cheaply in places with less stringent environmental regulations as the chief reason for their desire to close the facilities.  

On a more positive note, The Morning Call reports on Lehigh Carbon Community College's (LCCC) effort to make that region's manufacturers more competitive.  

B. Braun Medical established a customized-training program with the Career and Technical Institute that allowed the medical device manufacturer to modernize its Hanover Township, Lehigh County, plant to improve productivity and to keep 1,900 jobs in the Lehigh Valley, said Christopher Donegan, corporate vice president for Human Resources at B. Braun Medical Inc. 'We are able to retain our own workforce rather than go out and hire from other companies for these skilled employees,' Donegan said. Nestle Waters used a similar program to train workers at its Breinigsville plant to maintain and repair its production lines, improving efficiency and reducing downtime, said Peter Rittenhouse, supply chain director.

We believe the best long run approach to local economic development is to make investments in public goods as opposed to specific companies. Investing in a community college that provides skills demanded by a broad range of employers located in the community has the advantage of not tying the success of your investments of scarce public resources to the fate of any individual company.

Quickly, here are a few other items of economic news and opinion of interest this morning:

Twelve states have raised taxes on alcohol or changed alcohol laws to increase revenue, including Maryland, which in July pushed the sales tax on alcohol to 9 percent, from 6 percent — the first such increase in 38 years and one that is expected to bring in $85 million a year. In November, voters in Atlanta and elsewhere in Georgia will decide whether to repeal colonial-era laws that ban alcohol sales on Sunday.

Finally let me close with a graph. Paul Krugman reads Martin Wolf of The Financial Times and draws this Venn Diagram. To be fair, this describes our situation in the U.S. and in Pennsylvania as much as it does in Europe.


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