Posted on 02/26/2004 2:06:43 PM PST by Kenautry
Is cooking a hamburger patty and inserting the meat, lettuce and ketchup inside a bun a manufacturing job, like assembling automobiles?
That question is posed in the new Economic Report of the President, a thick annual compendium of observations and statistics on the health of the United States economy.
The latest edition, sent to Congress last week, questions whether fast-food restaurants should continue to be counted as part of the service sector or should be reclassified as manufacturers. No answers were offered.
In a speech to Washington economists Tuesday, N. Gregory Mankiw, chairman of the president's Council of Economic Advisers, said that properly classifying such workers was "an important consideration" in setting economic policy.
Counting jobs at McDonald's, Burger King and other fast-food enterprises alongside those at industrial companies like General Motors and Eastman Kodak might seem like a stretch, akin to classifying ketchup in school lunches as a vegetable, as was briefly the case in a 1981 federal regulatory proposal.
But the presidential report points out that the current system for classifying jobs "is not straightforward." The White House drew a box around the section so it would stand out among the 417 pages of statistics.
"When a fast-food restaurant sells a hamburger, for example, is it providing a 'service' or is it combining inputs to 'manufacture' a product?" the report asks.
"Sometimes, seemingly subtle differences can determine whether an industry is classified as manufacturing. For example, mixing water and concentrate to produce soft drinks is classified as manufacturing. However, if that activity is performed at a snack bar, it is considered a service."
The report notes that the Census Bureau's North American Industry Classification System defines manufacturing as covering enterprises "engaged in the mechanical, physical or chemical transformation of materials, substances or components into new products."
Classifications matter, the report says, because among other things, they can affect which businesses receive tax relief. "Suppose it was decided to offer tax relief to manufacturing firms," the report said. "Because the manufacturing category is not well defined, firms would have an incentive to characterize themselves as in manufacturing. Administering the tax relief could be difficult, and the tax relief may not extend to the firms for which it was enacted."
David Huether, chief economist for the National Association of Manufacturers, said he had heard that some economists wanted to count hamburger flipping as manufacturing, which he noted would produce statistics showing more jobs in what has been a declining sector of the economy.
"The question is: If you heat the hamburger up are you chemically transforming it?" Mr. Huether said.
His answer? No.
Well, there you have it people. The IRS tax code is the authoritative guide to common sense. How lucky we are to have them!
LOL, you are a riot.
Fight taxes not BUSINESS. Socialism kills business and leads to these WalMart fuedal/sharecropping systems becase they tax them out of the country. Destroy socialism completley and you wouldn't have to worry about your jobs leaving. DESTROY TAXES, there is your answer in two words. No deep philosophical pondering, economic analysis about interest rates, debt or assets.... Communism fails every time, and if the government keeps getting involved in every aspect of American life, there will be another 1860
Common sense is maintaining consistent definitions. Why you would somehow intimate this isn't "common sense" is really without merit.
The change is a technical decision. Thus, maintaining consistency between government agencies and their classifications is common sense...even if it is the IRS
Jobs are going out of this country at an accelerating rate, spurred on by policies enacted by our government.
In an effort at damage control, minumum wage burger flipping jobs are reclassified as manufacturing, so when this becomes an issue in the next election, statistics can be cited that show things aren't so bad.
All of this is painfully obvious to everyone with an IQ above room temperature. Claiming this reclassification is done for any other reason but political damage control is an insult to the voters intelligence and reaffirms cynicism and distrust in government.
Now, labor unions can be good things. What needs to happen, though, is a restoration of the balance of power between unions and corporations, as Barry Goldwater suggested in The Conscience of a Conservative. Unfortunately, his ideas were never properly implemented; as a result, labor unions have become increasingly corrupt and manufacturing jobs increasingly prone to offshoring.
BINGO on every count! Thank you.
Mankiw. In terms of an asset.....The Republican's Terry McAuliffe
Virtually everyone I know has far too much self-respect to ever desire to be, much less actually be, a government employee.
The few I know who are, are almost to a man, complete dolts.
Yeah and plugging in the buffer is an electrical engineering job.
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