Industry groups are lining up against President Trump’s edict that domestically produced steel be used in new pipelines for oil and natural gas transport.
So, are these groups somehow unpatriotic? Hardly. For it has everything do with economics.
As The Hill newspaper reports, “The oil and pipeline sectors say Trump’s ‘Buy America’ idea would increase costs, add to uncertainty and threaten his goal of boosting the domestic fuel industry.”
And these are no outlier groups. Among them — the Interstate Natural Gas Association of America and the American Petroleum Institute.
But it’s not just a matter of cost, per se: These groups remind that “a number of hurdles unique to pipeline-grade steel and pipe manufacturing must be overcome to expand domestic pipeline production and manufacturing.”
That is, users say the domestic industry can’t now offer — in quality, quantity or price — the product required.
Pittsburgh-based U.S. Steel disagrees with that contention. In a statement to the Commerce Department, it spoke of America’s energy independence being “undercut and undermined by a reliance on foreign sources and suppliers.”
It is, of course, a reference to “dumping,” which runs counter to the “free market” that should — should — be governing supply, demand and, thus capacity and price.
But Energy Transfer Partners, a pipeline operator, is pretty succinct in its opposition to the president’s order:
“If the U.S. pipeline industry were constrained to only domestic steel and pipe mills, we do not believe the domestic producers have sufficient capacity. The impacts of such a restriction are expected to severely delay project schedules, drive up costs, decrease availability and lower quality.”
This, of course, leads to an interesting question: What really causes this — “dumping” or inferior product?
It’s pretty astounding, those numbers from the commonwealth’s Independent Fiscal Office (IFO) that gauge the damaging economic effects of Gov. Tom Wolf’s proposal to raise the Keystone State’s minimum wage from $7.25 an hour to $12 hourly.
IFO boss Matthew Knittel says raising the government-dictated wage floor by nearly $5 an hour would not raise anywhere near the $100 million in new tax proceeds and would cost Pennsylvania about 54,000 jobs.
“You might have staff who retire, and then those positions wouldn’t be filled,” he says. “You might have some unfilled positions that you would eliminate. You may have created some jobs in the future and, due to a higher (pay) rate, a firm may not do that.”
And you can rest assured that such a dramatic raise by government fiat also would result in outright layoffs and expedite more automation, especially in the fast-food industry.
Now, some have rationalized the IFO’s findings, noting that these job losses would not happen in one fell swoop but over time. Well, isn’t that cold comfort, especially for those 54,000 people who won’t be able to find entry-level work because the government was so fatally conceited as to think it, and it alone, could command higher wages without consequences.
A few local college students quoted in a recent news report lament that Pennsylvania does not follow New York State’s new example of offering free tuition to full-time students at public universities and community colleges.
But one commentator on the story offers an object lesson that should be a part of the curriculum at every institution of higher education:
“It isn’t ‘free,’ children. You want taxpayers to pay for your secondary education which you have chosen to pursue. You are NOT entitled to have anyone’s money to pay for what you should be earning yourself. If this happens, then the tax burden on the middle to lower classes will increase making it more difficult for those individuals to make ends meet. This entitlement and me-only mentality needs to stop. If you want something, then work for it.”
The course should be called “Life 101.”
Another news story laments that development of the old Pittsburgh Civic Arena site in the lower Hill District has lagged.
Anybody care to wager that had development rights to the 28-acre site been competitively bid — instead of handed to the Pittsburgh Penguins — that redevelopment would have been well underway now?
Sadly, this latest example of government attempting to command the economy with one party given favored developer status likely will end up as something vanilla, architecturally cookie-cutter and, thus, quite underwhelming.
The North Shore between PNC Park and Heinz Field is a sad testament to just that.
Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
