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WH Considering Reclassifying Fast Food Jobs As 'Manufacturing'
NY Times ^ | 2/20/2004 | David Cay Johnston

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.


TOPICS: Business/Economy; Culture/Society; Government
KEYWORDS: newyorkslimes
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I once believed in utter market contolled free enterprise...but when I think about all the money Walmart makes and the percentage the lowest employees get...I'm outraged. When I think of engineering firms or law firms, if their company is successful their employees share in that success; their employees also share the failure.

JUST BECAUSE something CAN be done...does that make it right?

Just because these service, low-skill oriented jobs can pay every worker minimum wage, is it right? I used to believe that the market would determine the wage and that certain businesses would pay their workers what the workers deserved; in many markets this is true. The context that I'm looking at are those markets that are dominated by very successful organizations.

There must be some solution. Namely, because everyone can't be: a technical worker, professional worker, or government employee. As a matter of fact, I'm going to be an air traffic controller. I'm not an economist or accoutant or professional businessman so I don't understand every element involved with gigantic corporations. But think about this, one family, the owners of Walmart is worth near 100 billion dollars.

I'm not suggesting that every successful person give their money to government...I'm suggesting every successful CORPORATION give MORE of that success to their workers.

My concept of a perfect pay system.

When business is good...employees share the wealth (comparatively), and when business is bad...employees share the loss. Just that simple.

1 posted on 02/26/2004 2:06:43 PM PST by Kenautry
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To: Kenautry
Is cooking a hamburger patty and inserting the meat, lettuce and ketchup inside a bun a manufacturing job, like assembling automobiles?

Um, no.

2 posted on 02/26/2004 2:10:11 PM PST by Still Thinking
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To: Still Thinking
BUMP
3 posted on 02/26/2004 2:13:24 PM PST by international american (Kerry has hired a full time clerk to keep track of his lies..........)
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To: Kenautry
But think about this, one family, the owners of Walmart is worth near 100 billion dollars.

So?

4 posted on 02/26/2004 2:13:29 PM PST by facedown (Armed in the Heartland)
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To: Kenautry
It's ideas like this that give Democrats hope.Take this genius out into the woods. Shoot him and call it improving the breed.Republicans survived calling ketchup a vegetable, I don't know if they'd survive calling making a Big Mac manufacturing. It never helps to look ridiculous.
5 posted on 02/26/2004 2:16:39 PM PST by xkaydet65
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To: Still Thinking
"Is cooking a hamburger patty and inserting the meat, lettuce and ketchup inside a bun a manufacturing job, like assembling automobiles?"

Absolutely, [in an election year.]


6 posted on 02/26/2004 2:19:22 PM PST by John Beresford Tipton
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To: Kenautry
Namely, because everyone can't be: a technical worker, professional worker, or government employee.

But every single American believes his or her can and should be. And *that* is why there will always be a need for an economic underclass. The Dem's know this and choose to exploit them via the unions or as political pawns in the case of illegal immigrants. It's all a scam.

Perhaps on some level we're fortunate there are so many underachievers and drop outs. Or are we?

7 posted on 02/26/2004 2:21:21 PM PST by newzjunkey (NO on 55 & 56 -- YES on 57 & 58)
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To: Kenautry
Is cooking a hamburger patty and inserting the meat, lettuce and ketchup inside a bun a manufacturing job, like assembling automobiles?

"Well, I guess that depends on what the definition of 'manufacturing' is."

It a good thing we have Republicans now, otherwise we'd be stuck with dishonest politicians who parse meanings of words for political advantage!

8 posted on 02/26/2004 2:21:23 PM PST by freeeee ("Owning" property in the US just means you have one less landlord)
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To: Kenautry
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."

Stupid writer and stupid proofreader for this report, if this account is true.

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.

Mankiw, of "outsourcing is good" infamy, looks like he might be getting set up here. His only quote is "an important consideration," yet the NYT is trying to link it directly to the quotes from the report.

So does every other article I found on the subject...

Special Ed Administration
Cornell Daily Sun - Feb 25, 2004
... written by Chairman of the Council of Economic Advisors N. Gregory Mankiw, is presented ... In
a speech to Washington economists Tuesday, Mr. Mankiw was blunt and ...

Quaqmire World
Mother Jones, CA - Feb 22, 2004
... In a speech to Washington economists Tuesday, N. Gregory Mankiw... said that properly
classifying such workers was 'an important consideration' in setting ...

Bush Wants to Classify Fast Food Worker as a Manufacturing Job
ShortNews.com - Feb 23, 2004
... N Gregory Mankiw, Council of Economic Advisers chairman, says this
is "an important consideration" in setting economic policy. Fast ...

Forest and Trees
The Dominion, Canada - Feb 23, 2004
... N. Gregory Mankiw, chairman of the president's Council of Economic Advisers, this
distinction is "an important consideration" when looking at economic policy. ...

In the New Economics: Fast-Food Factories?
New York Times, NY - Feb 19, 2004
... N. Gregory Mankiw, chairman of the president's Council of Economic Advisers, said
that properly classifying such workers was "an important consideration" in ...

In the New Economics: Fast-Food Factories?
New York Times - Feb 19, 2004
... N. Gregory Mankiw, chairman of the president's Council of Economic Advisers, said
that properly classifying such workers was "an important consideration" in ...


9 posted on 02/26/2004 2:21:41 PM PST by Sabertooth (Malcontent for Bush - 2004!)
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To: Kenautry
When I think of engineering firms or law firms, if their company is successful their employees share in that success; their employees also share the failure

You obviouly have never worked in a law firm or in an engineering firm. Many of their employees are among the lowest paid anywhere. Only the partners share in the success or failure. Rarely do their employees.

10 posted on 02/26/2004 2:23:45 PM PST by AmusedBystander
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To: Sabertooth
Question: when the NYT manufactures a controversy, is it classified as a service? How about when the article is recycled by Bernie Sanders of Vermont and posted on his website? Or when it is then re-posted here?
11 posted on 02/26/2004 2:31:43 PM PST by 1rudeboy
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To: Kenautry
Mankiw needs to stop running his sewer. He's costing Bush untold numbers of votes among people who would otherwise be inclined to support him every time he opens his lousy trap. Bush is already in trouble on the jobs and economy issue, the Rats are slaughtering him with it. If these bonehead "advisors" try a stupid stunt like this, it could very well be the final nail in Bush's reelection hopes.
12 posted on 02/26/2004 2:37:34 PM PST by chimera
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To: Kenautry
...one family, the owners of Walmart is worth near 100 billion dollars.

Considering that sometime, in the beginning, the Waltons started with little or nothing, and through very long hours, hard work, smart business, investing in themselves and in their company, the business expanded and prospered beyond their wildest dreams, and is now a staple of most communities nationwide, I don't see how you cannot say, "Good for Them". That's what America is about. Same thing with Bill Gates. People may hate Microsoft and how he runs it and how it controls the market, but he built the business from the ground up. "Good for Him". And if someday you build that better mousetrap and find your worth in the Billion dollar range, Good for You.

13 posted on 02/26/2004 2:37:56 PM PST by theDentist (Boston: So much Liberty, you can buy a Politician already owned by someone else.)
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To: xkaydet65
Republicans survived the ketchup issue because ketchup is manufactured by an industrial proletariat out of vegetables.

Democrats who'd never been part of any industrial proletariat thought ketchup was made out of plastic. More than one of them undoubtedly thought of moving over to the use of recycled plastics so that people could have an environmentally friendly ketchup.

14 posted on 02/26/2004 2:40:50 PM PST by muawiyah
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To: Kenautry
Mankiw is going to cause Bush to lose in Nov
15 posted on 02/26/2004 2:42:49 PM PST by raloxk
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To: chimera
Mankiw caouldnt be doing a better job if he were a Democratic plant
16 posted on 02/26/2004 2:44:22 PM PST by raloxk
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To: Kenautry
This seems logical to me. Hamburgers are a manufactured product. These products endanger the public health, so say the shyster lawyer class. The government closes down these factories to protect the public health. We start importing tofu or whatever the politically correct deem the fashionable food of the day and the government has done what it does best and that is expedite the exporting of manufacturing jobs to Asia. Not to worry because the government has already declared outsourcing healthy to the economy.
17 posted on 02/26/2004 2:49:16 PM PST by Biblebelter
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To: theDentist
"Considering that sometime, in the beginning, the Waltons started with little or nothing, and through very long hours, hard work, smart business, investing in themselves and in their company, the business expanded and prospered beyond their wildest dreams, and is now a staple of most communities nationwide, I don't see how you cannot say, "Good for Them"."

Consider also that the profit margin on anything you purchase from Wally World is razor thin. On groceries, it's less than one percent net profit. In the rest of the store, the margins roam around in the low single-digits. The only reason they're able to have such laughably-low margins and still reap a handsome return is the profit of SCALE. And it costs billions to build a retailing chain of their magnitude, and in so doing, creates lots of construction and supply jobs.

Wal-Mart has negotiated very very low prices from its suppliers - who then are rewarded with far more units sold than if the prices were higher. Yes, you as a supplier, might only make a few cents on each bottle of salad dressing you sell to WM, but since they buy 80 million bottles of the stuff from you every year, WHO CARES?!?!

Michael

18 posted on 02/26/2004 2:50:42 PM PST by Wright is right! (It's amazing how fun times when you're having flies.)
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To: Kenautry
From a tax basis, food preparation is considered manufacturing. In fact, because of that classification, many companies can save $$ on utility bills from having portions of the bill regarded as tax exempt.

So, for the WH to make this change wouldn't be that much of a stretch.

19 posted on 02/26/2004 2:54:07 PM PST by Solson (Our work is the presentation of our capabilities. - Von Goethe)
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To: Wright is right!
Exactly. They built the better mousetrap.
20 posted on 02/26/2004 2:55:13 PM PST by theDentist (Boston: So much Liberty, you can buy a Politician already owned by someone else.)
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