SIOR magazine

Tariffs are bad. Tariffs are passed along to consumers in the form of higher prices which takes money from consumers and gives it to the government. Government spends the money eventually, but it is always an inefficient spender. It used to be that the Republican Party was against making government bigger and always wanted individuals to have control over their money, but things have changed. And this change is bad for business.


The SIOR Report, a magazine for the commercial real estate industry focusing on the office and industrial markets, recently interviewed Louisiana Commercial Realty broker, Robert Hand, for thoughts on how tariffs will affect the commercial real estate market.  SIOR is the most prestigious commercial real estate trade organization, established in 1939 with 3,300 of the top commercial real estate members in 685 cities and 36 countries.

TariffGate As Of Friday, October 25th

economic war on tariffs

Hand provides some background on the latest tariff news: "Tariff negotiations have been going on for almost 2 years, but on September 1st, Trump imposed a 15% tariff tax on goods purchased by Americans that were made in China. Trump imposed the tariffs on nearly all of the $550 billion in U.S. imports from China because negotiations the month before fell apart. The tariff was then delayed to take effect on December 15th with the idea that by doing so, it would not dampen the economic impact of Christmas sales because the tariff applied to cell phone, toys and computers. As of today, Trump has agreed to cancel $250 billion of tariffs if China will purchase more soybeans and grains and improve protection on intellectual property."

War On Tariffs

Broker Robert Hand is in the trenches, since his clients are looking to build warehouses to store inventory and lease office space to manage growth into a new territory, so he sees effects of tariff talk on businesses who stop expanding during the uncertainty.

Hand explains, "Tariffs steal money from consumers' pockets by causing prices to increase. Tariffs steal creativity, reward inefficiencies and destroy the competitive drive that allows a free market economy to deliver cheaper, smarter and more innovative products."

For more information on tariffs, read Hand's article, "Every Economics Textbook Teaches Us Tariffs Are Bad".


Map of Unemployment by State
The Latest Unemployment Rate of 3.5% Is Only Enjoyed By Half of the States

Not all states are enjoying the benefits of September's 3.5% national average unemployment rate; in fact, 50% of the states have worse unemployment than the average and about 25% have much worse. Only 3 states enjoyed an increase in nonfarm payroll employment: Kentucky, Idaho and Hawaii.


14 States Have The Worse Unemployment Rate

14 States Have The Worse Unemployment Rate

Alaska is suffering the highest unemployment at 6.2%, with Mississippi next in line at 5.4%. Louisiana ranks 9th from bottom at 4.3%. Michigan and Ohio also fall in this category, voting their dissatisfaction.

11 States Rank Slightly Worse Than Average

Eleven States Have Unemployment Rates Slightly Better Than Average

California is a $3 trillion dollar economy, ranked the 5th largest in the world, so it's 4% unemployment puts a drag on the national average. Pennsylvania and New York are also strategic voting states and fall in the slightly worse job category.

14 States Are Slightly Better Than Average

14 States Enjoy Unemployment 3.1% To 3.4%

Texas has no state income tax and is business friendly which helps increase population which leads to jobs. When you add in Florida, Minnesota and Wisconsin plus the middle America states, you can see why better off voters can vote Trump another 4 years.

Best States For Jobs

Vermont had the lowest unemployment rate in September 2019, at 2.2 percent. Something powerful is happening in Alabama, Colorado, and New Jersey which had the largest over-the-year unemployment rate decreases (-0.8 percentage each). 

Table Of Unemployment Rates Per State For August & September 2019

Table: Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily.

What's Wrong With Mississippi?

Mississippi's unemployment rate is the 2nd worst in the nation at 5.4%, but it hasn't always been that way. It's been worse. Since 1976 when the Bureau of Labor first reports data, Mississippi only had an unemployment rate below 5% in 2 out of the 43 years: from October 2017 to August 2019.

Chart: Mississippi Unemployment Rate 1976 To 2019

Mississippi Labor Force Is Stagnate For Last 20 Years

Chart: Mississippi Labor Force 1976 to 2019

Mississippi's labor force increased steadily from 1976 at 961,115 to year 2000 at 1,252,180, then stagnated to 1,287,413 in September 2019. That's essentially zero growth in the labor force the last 20 years, even though the unemployment rate is near it's lowest level in 40 years.

Chart: US Labor Force 1976 to 2019

Compared to the national labor force which increased 72% from 1976 to 2019, Mississippi sucks hind teat at 30%. Had Mississippi kept pace with the national average, the labor force would be higher by 365,000, or 30% more workers. Mississippi just need more people moving into the state.

In summary, the unemployment rate is a misleading indicator of health. A steadily growing labor force is a better indicator since it means the population is increasing which leads to more jobs, higher production of goods and services, higher tax revenue for government spending and higher wages which leads to higher consumer spending which further drives new business formation and continues the domino effect.

Louisiana Commercial Realty

Commercial Real Estate Experts
Robert Hand, MBA, CCIM, SIOR
Licensed in Louisiana & Mississippi
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