As regular readers know, it is the policy here occasionally to step back, update some matters previously mentioned, correct any errors that need correcting, and respond to various comments and complaints. This is one of those occasions.

But we begin with an announcement: The News Guy is taking next week off.

Actually next week and the following Monday. He does have a life beyond this web site, and will live it, visiting family and wasting a few days in New York City, home to cultural and gustatory opportunities not usually found in Vermont. Posts will resume (after this Friday’s regularly scheduled offering) on Wednesday, April 7.

Now, to the updating. The post on March 8, They’ve Got a Secret, discussed, and essentially attacked, H. 331, a bill to allow the University of Vermont and the State Colleges to guarantee the anonymity of big bucks contributors.

The bill is sort of dead. Officially, in the words of the Legislative web site, it was  “ordered to lie on motion of Senator (Peter) Shumlin,” the Senate leader.

That’s legislative-talk for “dead,” but the “sort of” is required because Shumlin, having ordered it to lie, can order it to wake up, and he may be pressured to do so by Gov. Jim Douglas and the higher education establishment, neither of whom (which) is without clout.

But neither are the state’s news media, whose opposition is obviously what gave the lawmakers second thoughts on a measure that had already passed the House and looked likely to sail through the Senate.

It would be tempting for the News Guy to claim credit. It would also be absurd. Far more influential was an editorial in the Burlington Free Press, testimony by Rutland Herald/Montpelier Times-Argus publisher John Mitchell, coverage by VT Digger, and a most persuasive column by Tom Kearney of the Stowe Reporter and Waterbury Record (reprinted in the Free Press March 16).

Another bill, this one discussed in Corporate Values on March 15 is not dead. . It passed the Senate March 19 and is before the House Committee on Commerce and Economic Development. This is the bill that would allow corporations to define themselves as “for benefit” corporations with other objects in addition to making money written right into their charters.

Not because they don’t want to make money. They do. But the “for benefit” status could allow them to fend off hostile takeover efforts by larger firms offering higher stock prices. Right now, the board of the smaller company would be reluctant to resist because shareholders could sue, arguing that their shares are worth money and nothing else, and that the board was preventing them from maximizing share value.

But if the corporate charter specified that the firm had other basic objectives – supporting local businesses, practicing sustainable agriculture, or the like – its board could resist the takeover on the grounds that the would-be buyer did not share those goals.

Last Friday, after March 19^’s Austrian Delusion had gone to press (no, that’s not the right term; but what is?) the News Guy received more information about Austrian economic and social conditions, thanks to Maria Spalt, the 
Director of Business Development at the Austrian Business Agency in New York.

Austria, as the post said, is where the Burton snowboard company had decided to consolidate some of its manufacturing operations (it also produces snowboards in China), eliminating all production in Vermont, though its headquarters and other functions will remain in the state. The switch will cost 43 Vermonters their jobs, and the news set off ill-informed speculation about Vermont’s “business climate” and whether the company was taking this step to get away from Vermont’s taxes, wages, and regulations.

As the new information makes clear, it is not. Instead, Ms. Spalt provided more evidence to support the post’s contention that businesses do not move to Austria to luxuriate in some free-market paradise of low taxes, minimal regulations, and weak labor unions. In fact, the country seems far closer to a social democratic paradise of widespread entitlements and (at least compared to the U.S.) economic equality.

For instance, according to a report  last month in the Austrian magazine Gewinn, the average salary of corporate CEOs in Austria is just a bit more than 180,000 Euros a year, which comes out to about $250,000. Not a bad living, but far less than American CEOs earn. Yes, most Austrians earn less than most Americans, but the spread between the top and the middle (or the middle and the bottom) income levels is not nearly as big. In 2007, according to Statistics Austria, median individual gross income was €23,613, or not quite $32,000.

That’s only a couple of thousand dollars a year less than the median in Vermont, and slightly more than $3,000 lower than in the U.S. as a whole. Though slightly poorer, the Austrians might be happier. According to the statistics sent by Ms. Spalt, an accounting by World Competitiveness Online concluded that Austria rated second among 57 countries for its “quality of life.” The U.S. was 16^th.

These “quality of life” and “happiness” ratings should be approached with some skepticism. They are based on some assumptions which are not easily quantifiable, and others which are downright subjective. For what it’s worth, though, in a new book called The Spirit Level: Why More Equal Societies Almost Always do Better,  epidemiologists Richard Wilkinson and Kate Picket conclude that the country with the highest quality of life and least social dysfunction is Sweden.

http://en.wikipedia.org/wiki/The_Spirit_Level:_Why_More_Equal_Societies_Almost_Always_Do_Better.

Ms. Spalt also said almost one fourth of Austrian workers were unionized, twice the rate in the U.S. But she said labor-management relations were more cooperative than confrontational, and strikes were rare.

NOTE: To Stowe Reporter readers who had been told today’s post would be about some interesting new health studies: that can wait until Monday. The following should not.

Let’s stipulate at the outset that the folks at the Burton Snowboard company know their business, and if they say they can make snowboards cheaper in Austria than in Vermont, then by gum, they probably can.

Aside from that, the entire discussion about Burton’s decision to move its manufacturing operations from Chittenden County to Uttendorf, Salzburg State, Austria, has been drivel.

Political drivel and economic drivel, all driven (or perhaps drivelled?) by the same pre- or mis-conceptions.

All described by news media who acted the part of clueless doofuses who believed everything they were told, and even a few things they were not.

To begin, with, the story was grossly overblown. The move will cost 43 jobs. That’s 43 of more than 335,000 employed Vermonters, or slightly more than one hundredth of one percent of all workers. Neither the pontificating politicians nor the credulous correspondents even know whether they’re particularly good jobs because Burton isn’t saying how much the production workers earn.

Yes, Burton is an “iconic” (could we possibly retire that word?) Vermont company; if snowboarding wasn’t exactly born in the state, it at least came of age here.

But…the company isn’t moving. Its headquarters and almost all its non-production operations are staying right in Burlington, and even, it seems, expanding. Yet WCAX-TV (Channel 3) opened its Wednesday evening broadcast asking whether Burton’s move raised the question: “Is Vermont business-friendly?”

Well, it’s the default position question, isn’t it? So everybody, starting with Gov. Jim Douglas and his minions, jumped on it with the conventional assumptions.

Which were only about 180  degrees off.

The conventional assumptions are that when a business moves anything out of Vermont, it must be because Vermont is “anti-business.” It taxes the rich. It imposes mandates on companies. It coddles the workers.

Compared with Austria?

Hello, everybody. Austria is in Central Europe. It has many attractions: a highly skilled and industrious work force, Alps, Vienna, schnitzel. But it is decidedly not a place to go to save money. Like the rest of Central (and Western) Europe, Austria is prosperous and expensive.

Not as expensive as Germany, Sweden, or France. But it’s not as if Burton was moving some work to Nicaragua, or South Carolina, where the social safety net is weaker. In Austria, it’s stronger.

You’d-a-thunk someone would have noticed that and raised some questions.

Does anybody still raise questions?

The Governor, to his credit, was somewhat restrained, recognizing that manufacturing is in trouble all over America. Still, he had to throw in that Vermont has “some costs that are particularly troubling to manufacturers,” including taxes and health care.

Others jumped on the bandwagon, apparently (and, as it turned out, accurately) confident that no one would question their premises. David Mace, the spokesman for the Agency of Commerce, told the Rutland Herald that Burton’s move showed that the state has to reduce taxes and  “burdensome regulations.” Tayt Brooks, Commissioner of the Department of Housing, Economic and Community Development, said he hoped the Burton move “serves as a wake-up call to the Legislature…I mean we have bills…mandating paid sick leave…that really send a wrong message to businesses out there in the state.”

In other words, if Vermont adopts mandated paid sick leave (which it will not, at least not now), more businesses might move some of their operations to…well, obviously to Austria.

Where they have mandated sick leave, paid for by the employer at first, then by the Social Security system, said Wolfgang Renezeder of the Austrian Embassy in Washington.

(Note to Vermont reporters: Almost every country has an embassy in Washington. They are all in the phone book. Almost every one has a press attaché, most of them probably as helpful and courteous as Wolfgang Renezeder. Also, for information about economic conditions in other countries, there’s this thing called the Internet…)

Usually, when a business (or even a person) moves (or, as in this case, kind of moves) elsewhere, the immediate response is to argue that Vermont has to become more like the elsewhere.

Let’s examine that. To become more like Austria, Vermont needs:

(1)  Higher taxes;

(2)  stronger labor unions, probably meaning higher wages;

(3)  Five weeks of paid vacation for almost everyone, said Renezeder, because “unions play a very important role in our economy and we do have very strong social rights;”

(4)   An energy system that gets almost two thirds of its electricity from hydropower, wind, solar, and biomass, and none at all from nuclear reactors, which are against the law for generating electricity.

(Austria had a nuclear power plant once but shut it down   after a nationwide referendum back in the 1970s.)

Does anybody else get the feeling that the above does not describe Utopia as defined by Jim Douglas and associates?

None of which means it won’t be good business for Burton to consolidate its production in Austria. It isn’t unheard of for European countries (like American states) to offer subsidies, incentives, or bribes as they are sometimes known, to convince businesspeople to expand.

Burton officials did not respond to a request for explanation, and a call to the home of CEO Laruent Potdevin was not returned.

So we’re into conjecture here. The population density of Salzburg State, where Burton’s plant is located in the city of Uttendorf, is smaller than Chittenden County’s, meaning land prices might be lower.  But probably not much lower; it’s a ski resort area. Property taxes could be lower, too, because in general European countries have minimal local taxes.

But that elaborate Social Security system, the one that finances health care, pensions, and sick pay, costs employers up to 21.9 percent of each worker’s salary (and up to 18.2 percent from the worker), far higher than U.S. payroll taxes. Renezeder said the tax is progressive, “the more you earn, the more you pay,” unlike the flat rate in the U.S.

It’s always possible that Burton has worked out some kind of tax preference deal. But considering that, in the aggregate. Austrians pay one third more of their Gross Domestic Product in taxes than do Americans (this according to the Organization of Economic Cooperation and Development) it’s hard to see how any person or business could move from here to there and not have a higher tax bill.

Or, probably, a higher wage bill. Even if Burton’s Austrian employees are not unionized, most other production workers in the area probably are, which would keep wages on the high side.

From the company’s perspective, though, the workers might be worth it. Some of those Austrian taxes support an elaborate and apparently effective network of vocational schools. It’s a four-year course,  Renezeder said, and the graduates emerge “very qualified, very productive.”

If that’s true, there may be a lesson for Vermont here: Improve vocational education. But unless Vermont wants to transform itself into America’s leading social democracy/welfare state, that’s the only lesson.

Except maybe that reporters should ask questions.