Eight family businesses join Family Business Association

Eight family-owned businesses have joined the Family Business Association of California in recent months, increasing the strength and effectiveness of the only organization devoted solely to advocating for family businesses in Sacramento.

“Now more than ever, family businesses need to stand together as the Legislature and the regulators continue to impose new requirements that make it more difficult for these firms to remain family-owned,” said Robert Rivinius, FBA’s Executive Director.

“While family businesses have a great track record of supporting their employees and giving back to their communities, only about 30 percent survive into the second generation, 12 percent to the third and just 3 percent to the fourth generation and beyond. FBA was founded to be an aggressive advocate for family businesses and we’re extremely pleased that these companies have joined.”

In alphabetical order, the new members are:

  • Acorn Surfaces and Treatments, a first-generation Fresno-based company that provides concrete treatments and solutions for its customers.
  • Allied Managed Care, a medical case management company founded in 1995, and Acclamation Insurance Management, a third-party insurance claims management firm launched in 1989. The two second-generation, Sacramento-based companies are owned and managed by the same family.
  • Ceronix, Inc., an Auburn company that is the leading U.S. developer and manufacturer of custom color monitors and circuit boards, primarily for the gaming industry. Its first-generation founder launched the company more than 30 years ago.
  • Flyers Energy, which is one of the largest commercial fueling providers and Mobil lubricant marketers in the nation. The Auburn-based company, founded in 1979 by four brothers, also produces renewable energy.
  • Haney Business Ventures, a Rocklin-based business and management consulting firm dedicated to helping entrepreneurs grown their businesses.
  • River City Bank, a Sacramento-based bank founded in 1973 and has 12 branches in the Greater Sacramento Area and a commercial banking office in Walnut Creek. Its chairman is a second-generation member.
  • Skyline Self Storage, a Susanville company that operates two self-storage facilities and is run by first- and second-generation family members.
  • Taylor Farms, a Salinas-based fresh produce processor and packager founded in 1994 that has grown to have 12,000 employees and sales of more than $3 billion per year.

As an example of the obstacles family businesses face, Rivinius noted that legislation was introduced this year that would create a new California estate tax to replace the federal tax being considered for elimination. While the bill is currently on hold, its author has stated it will be brought back in 2018 if federal tax laws are changed. Estate taxes are one of the biggest obstacles in allowing businesses to remain family-owned from one generation to the next.

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About the Family Business Association of California (FBA): Founded in 2012, the Family Business Association of California is the only organization working exclusively at the Capitol to educate lawmakers and regulators about the importance of family businesses to the state’s economy and to their communities. For more information, visit www.myfba.org.

 

 

Fear Not Robots, Artificial Intelligence, or Algorithms

By Elliot Eisenberg, Ph.D.

October 2017

Almost daily, we hear that robots, machine learning, and automation will destroy jobs — and not just a few, but tens of millions of them, and soon! Some experts predict that 47% of all US jobs are at high risk of disappearing over the next few decades due to computerization; others predict even more dire outcomes. Doomsayers suggest that “this time is different,” and that the technological apocalypse to come will be so profound that we are on the precipice of an employment crisis. I doubt it — just think about electricity and how disruptive it was, or how farming was transformed by mechanization and massive consolidation, yet employment growth in both cases hardly skipped a beat.

This pessimism would be at least plausible if there were a shred of evidence to support it! While the US economy has numerous problems, job creation is not one of them. Nonfarm employment and has risen for 87 months in a row, and job growth has been twice its sustainable level for years, driving the unemployment rate down to its best level in decades. Moreover, labor productivity growth, which should be skyrocketing because of all these robots and automation, is, in a word, abysmal.

In fact, going back to 1850, job creation and destruction, as measured by job losses in slow-growing occupations and job growth in fast-growing ones, is at its lowest level on record! There are two main reasons for this: first, the past was much more convulsive than we think. The arrival of the steam engine, cotton gin, and internal combustion engine, wrought economic havoc on the labor force as they were deployed. Ditto for the railroad and the mechanical switchboard. In fact, adjusted for labor force size, 57% of the jobs that workers performed in 1960 no longer exist!

As for the second reason, because Americans now consume substantially more services than in the past, and because the goods they consume are less easily automated, technological disruption moves much more slowly than before. That is, massages and boat cruises are services that are very labor intensive and cannot be automated, and even goods such as artisanal cheese and free-range eggs lend themselves to less automation than the manufacturing of American cheese slices and amusement park rides. As a result, robots and artificial intelligence can replace a lot less economic activity than we might think. And this is likely to continue. Just consider for a moment the likelihood of a parent leaving their young child in the care of a robot.

Lastly, in low productivity growth areas such as education, healthcare, transportation, and construction, where jobs are largely performed the same way they were decades ago, the productivity gains from technology can’t come fast enough and may well be economically transformative. If suddenly millions of truck, bus and taxi drivers are freed up to do other tasks that are more productive, that would be an economic boon. Similarly, if residential construction, where there been have no productivity gains at all in decades, can use robots to build homes better and faster, we will all be better off. Otherwise, our ever-tightening labor market and aging population will cause wages to rise and growth to decline. In short, we need technology to destroy more jobs more quickly.

Elliot Eisenberg, Ph.D. is President of GraphsandLaughs, LLC and can be reached at Elliot@graphsandlaughs.net. His daily 70-word economics and policy blog can be seen at www.econ70.com. You can subscribe and have the blog delivered directly to your email by visiting the website or by texting the word “BOWTIE” to 22828.