The Daily Star, Oneonta, NY - otsego county news, delaware county news, oneonta news, oneonta sports

Guest Column

April 27, 2013

A closer look at our economy - Part II

We have talked about the public sector component of our economy. Now let’s take a brief look at the manufacturing and retail/services sectors. Our early history is steeped in the entrepreneurial tradition and includes our railroad, lumber, hops and the dairy industry. Back then Oneonta was encouraging growth and, as a result, prospered and grew. Today we are passing moratoria to restrict the use of our roads and to the keep “unwanted” business out. What has changed and why? Who defines “unwanted”?

The manufacturing sector is generally a capital, labor and energy intensive component of the overall economy, and one that is vital to having a vibrant and prosperous “middle class”. The capital and labor are needed to fulfill the vision of an entrepreneur seeking to make a profit. Chobani Yogurt in South Edmeston is an example. They invested in buildings, machinery, equipment, trucks for distribution and hired about 1,500 local people (labor). Together the people and equipment take raw material including milk from nearby farms (if they can meet the need), water and energy to create a product that has a greater monetary value than the sum of the costs it took to make it. That value is what we know as profit, and it’s that profit that drives a healthy economy. When either manufacturing or retail can’t make a profit, they either leave or go out of business. Consider a comment the governor made in response to questions about what is being done to keep Remington Arms, and the 3,200 jobs it supports, from leaving New York. He said: “That kind of thing is a regular occurrence. We have to deal every day with companies that want to leave NY.” (paraphrase).

Economic incentives provided by local government (like tax relief for a period of time) to the manufacturer or retailer help attract the new company to the area and help insure their viability. Chobani, and the people it employs, pay the taxes and fees which the public sector requires in order to provide both the company and the community at large with public services like education, health care and government.

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