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Jigar Shah Headshot

President Obama: "Final Assembly Required" Spurs Middle Class Jobs Faster Than "Made in America"

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On Tuesday, President Obama addressed the nation to lay out a blueprint for an American economy that's built to last.

The president promises to address the following:
• American manufacturing -- with more good jobs and more products stamped with Made in America.
• American energy -- fueled by homegrown and alternative energy sources.
• Skills for American workers -- getting people the education and training they need so they're ready to take on the jobs of today and tomorrow.

While I commend the president for pushing us to drive an economy that is built to last, I think in our global economy, stamped "Made in America" is not the only goal when it comes to building the things that give us pride. We have also created an energy and transportation infrastructure that has been the envy of the world. So, beyond, Made in America, "Final Assembly in America" is another key to job restoration.

While "Made in America" is certainly an important goal, his two other points, a) American Energy and b) Skilled American Workers, can be achieved with infrastructure jobs. I saw this through the founding of SunEdison, the largest U.S. solar services provider.

SunEdison has been the model to create a multi-billion solar industry. The economic drivers to make the industry take off have been 1) rising fossil fuel energy costs and 2) global sourcing of solar materials (especially panels) to drive down the cost of solar installations. When these two forces meet, it reduces the cost of solar generated electricity equal to, or less than, the price of fossil fuel generated electricity delivered to consumers in many parts of the country.

When solar gets deployed in a community, it creates local jobs in American communities. Today, the U.S. solar industry has about 100,000 workers in the U.S. With the U.S. solar industry set to install $12B and 3,500MW of power the industry generates roughly 30 jobs per MW. With only an average of three jobs per solar panel manufacturer, the other 27 jobs are in the rest of the supply chain.

Of the 100,000 U.S. workers, 52 percent are construction workers that could have been retrained from building new homes. Construction jobs initially offer modest pay, but an experienced worker can command more pay. The reason: in construction, value is the ability to complete custom jobs on time and on budget. That requires experience and know-how. People who have experience and can demand and receive higher salaries.

People representing sales, marketing, engineering, design, accounting, permitting, paralegals, lawyers, executive assistants, and other jobs in the great middle are filling the other 48,000 jobs.

Separately, last weekend, there was an article in the New York Times by Charles Duhigg and Keith Bradsher that reminded me that the solar industry is an example of an industry rebuilding the middle class in America.

The article revealed that manufacturing, like the auto industry in the 1900s, has been the backbone of jobs the American economy. And, according to the story, many manufacturing jobs, which created the U.S. middle class, are now in China and other nations, particularly in Asia. Bottom line is we are losing middle class here in the U.S.

The authors showed that 1,000 auto manufacturing jobs for a generation ago created more than 5,700 jobs. While in the healthcare sector today, a service sector, 1,000 jobs spur a total of only 1,700 jobs.

In the new world of global manufacturing, the reporters' iconic example is Apple. The company, with the highest enterprise value of $353 billion, has created many high-paying design and engineering jobs in America. Apple has also spurred thousands of jobs in their stores and online customer support that offer modest pay.

But those middle-management/middle-class manufacturing jobs that used to be the heartbeat of America have gone elsewhere. In essence, Apple is a product designer and distributor/service-support provider in America. It is no longer a manufacturer in America of the finished product.

When the imported iPhone arrives in America, there is "no assembly required."

However, with a solar panel imported from China, to have a solar system on the roof of a local Walmart or Staples, "assembly is required."

Our global sourcing economy -- whether for iPhone parts or solar panels means we can't count on manufacturing a product in America in perpetuity. For that matter, no country can. Those manufacturing jobs can be outsourced at some point.

But, our infrastructure jobs cannot be outsourced.

The Apple's iPhone that lands on our shores, it creates service jobs for customer support and sales, not manufacturing jobs. The solar panel that lands on our shore creates manufacturing jobs right in our communities.

The rebuilding of America's energy infrastructure system is one example of how we are rebuilding our middle class with highly skilled workers.

In the case of solar, we do not necessarily need solar panels that are stamped, "Made in America" to create new jobs. We need the demand for solar as a fuel source for electricity. We can shop for the lowest cost, highest quality solar panels around the world. The highly skilled workers, we can source locally, right here in America.

In doing so, we meet President Obama's second point of rebuilding American Energy -- fueled by homegrown and alternative energy sources. And, to deploy this new energy requires his third point, skilled American workers.

Focusing on infrastructure, like solar, which requires local fabrication and installation, will help re-build middle class jobs in America. And those jobs and projects cannot be outsourced. In the end, it will help reweave the core of what makes America great: The middle class. Then we can proudly stamp on each site: "Assembled by Americans for America."

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