President Obama's announcement last week that Commerce Secretary John Bryson will join National Economic Council Director Gene Sperling as co-chair of a new White House Office of Manufacturing Policy offers a glimmer of hope that our government will finally get serious about promoting U.S. manufacturing.
The good news is we still have a vibrant manufacturing base that is dominant in many key industries. We can turn things around if our leaders will get behind sensible policies that will strengthen our manufacturing sector. There is a diversity of opinion about how best to achieve this, and it is vital that we keep our eyes on the ball and not get distracted by a well-intentioned social agenda driven by politics instead of market incentives.
But many good people have been working on this challenge and there is a wealth of intelligence available to Bryson and Sperling. For example, the Information Technology & Innovation Foundation (ITIF) has developed The Charter for Revitalizing American Manufacturing built on four T's: technology, taxes, trade and talent.
While the charter focuses on all manufacturing, it gives special emphasis on encouraging small manufacturing. It is worth nothing that this ITIF document represents a consensus among diverse interests including the AFl-CIO Industrial Council, the Alliance for American Manufacturing, The Brookings Institution, the Council on Competitiveness, the Manufacturers Alliance, the Manufacturing Institute, MIT and many others. While there is room to strengthen the agenda further -- by adding major regulatory reforms -- it provides the building blocks of what is needed for strengthening manufacturing competitiveness, economic growth and job creation.
Jerry Jasinowski, an economist and author, served as President of the National Association of Manufacturers for 14 years and later The Manufacturing Institute. Jerry is available for speaking engagements.
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Technology -- Much of the decline in R&D funding in America has been the result of declines in government support of basic research at the university level. Therefore, if ITIF wants more R&D spending it should support an increase in government funding for research.
Taxes -- The effective corporate tax rate (as opposed to the nominal rate) already is lower than many other countries. However, ITIF is correct in arguing that there are inefficient tax breaks and that the tax system needs to be revamped to make it more equitable and effective.
Trade -- I think ITIF got this one correct.
Talent -- Rather than complaining about the sad state of education in America, ITIF should make constructive suggestions for improving our educational system.
OR, you can flunk out of the engineering college, get into the business college, have a weak starting salary and retire making millions. My college roommate, who did what is noted above, retired at age 37.
Apart from the wage disparity, you are also under threat from the excellent Asian engineers who work for about $15,000 a year.
I read in the 1980s that the biggest obstacle facing manufacturing industry was UNIONS with their high cost of salaries and benefits. It's never been about taxes or regulations - its always been the almighty hourly wage - too high in USA. The plan was to move manufacturing to where the hourly wage was cheap, cheap thereby over the years wages in 3rd world countries will slowly rise. Meanwhile in USA, unions will be eliminated or wages renegotiated to lower level thereby forcing hourly wages down. People will be so in need of jobs they will take whatever wage is offered.
Now 30 yrs later we see this lower hourly in USA come to pass. Last month I heard of a new boots manufacturing plant that opened in KY, hourly wage $8.00. Over 30,000 applicants received for less than 500 jobs. New Wal-Mart stores opened, hourly wage about $8.00. Thousands of applications received.
Recently Jeff Immelt (sp), GE CEO and the president's jobs council said in an interview that if hourly wages in USA were under $10 many companies would bring their manufacturing back.
So folks, tax issues and overloaded regulations as the reason for jobs' lost is BALONEY. It's the hourly wages. Once this is open up for discussion, the quicker the 'bring the jobs back' can get started.
As I have heard so many union members say, "at least I got mine."
Good job, too bad the big boys will be against anything that forces them to get away from outsourcing.
More jobs were lost in the recession of 2007-09 than in the previous four recessions combined. At the current pace, it looks as if it will take until late 2016 to make up for the net job loss to date of 7.5 million. There were six million jobs outsourced under President Bush and then we lost 8.5 million jobs under the recession the GOP passed to the current administration. Isn't that 8.5 million jobs lost and 6 million outsourced jobs really close to the 15 million unemployed Americans? Bush and the Republicans ended their term with payroll employment below where it was when they took office, the first time that’s happened since the Hoover administration.
http://www.democraticleader.gov/news/reports?id=0472
Long before the banking collapse of 2008, such important U.S. industries as machine tools, consumer electronics, auto parts, appliances, furniture, telecommunications equipment, and many others that had once dominated the global marketplace suffered their own economic collapse. Manufacturing employment dropped to 11.7 million in October 2009, a loss of 6 million or 32 percent of all manufacturing jobs since October 2000. The last time fewer than 12 million people worked in the manufacturing sector was in 1941. In October 2009, more people were officially unemployed (15.7 million) than were working in manufacturing.