The Urgent Need to Revitalize U.S. Manufacturing

Labor and business leaders agree: we must revitalize manufacturing to get our economy back on track. Let’s hope the Obama Administration and Congress recognize this, as well.

The President is convening a jobs summit at a critical time for the nation's factory workers. Our manufacturing sector has lost more than 5 million jobs in the past decade and 51,000 plants have closed. According to the Bureau of Labor Statistics, the manufacturing sector experienced a staggering 566 "mass layoff events" in October 2009 alone, leaving nearly 70,000 new claimants seeking unemployment benefits.

On Wednesday evening, CNBC broadcast an exceptional “Meeting of the Minds” town hall meeting on manufacturing, taped at Carnegie Mellon University in Pittsburgh. Highlights of the discussion are available here.
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Much of the focus was on how to keep manufacturing in the U.S., and in particular how we can ensure that our R&D and technological innovation translate into jobs in the U.S. The best ideas from the CNBC show participants—business leaders such as GE’s Jeff Immelt, Ford’s Bill Ford, and Nucor’s Dan DiMicco, as well as the United Steelworkers’ Leo Gerard, Labor Secretary Hilda Solis, and John Engler of the National Association of Manufacturers—can form the framework for a good jobs policy:

Balance our Trade Relationship with China. China's protectionist policies have been a leading culprit of manufacturing job loss in the U.S. Subsidized and dumped imports, artificially low currency, and lax environmental standards have put our workers and companies at a significant disadvantage. The U.S. trade deficit swelled to $36.5 billion in September alone, but more shocking is the fact that the non-oil goods trade deficit with China has peaked at 83% of the overall deficit. [2]

Invest in Infrastructure. A January 2009 AAM report (link here) shows that roughly 18,000 new jobs would be created for every $1 billion in new infrastructure spending on our nation's transportation, energy, water systems, and public schools. In order to adequately meet the economy's assessed infrastructure needs over the next five years, the report estimates that a minimum of $87 billion per year is needed, of which $54 billion would come from the public and $33 billion would be private investment.

Buy America. Studies show that manufacturing employment gains from infrastructure investment increase by 33% when the amount of U.S.-made material inputs are increased by including a strong Buy America provision. Full transparency of the waiver process should also be implemented to increase public scrutiny and to ensure that domestic manufacturers can step in when requests for waivers are posted.

Increase Access to Credit. The lingering credit crunch continues to have an adverse effect on manufacturers, especially small- and medium-sized firms that have historically been responsible for the bulk of job creation. Access to capital is also critically important for companies seeking to meet the demand for clean energy manufacturing, such as wind turbines and solar panels.

Enhance Green Job Creation in the U.S. The recent announcement of a massive wind farm project in Texas is raising red flags because its developers plan to manufacture the high-value wind turbines in China. As a result, taxpayer dollars from the $787 billion Recovery Act will be used to create thousands of jobs in Shenyang, China. Properly-designed energy tax incentives must be employed that require manufacturing to be used in towns across America where plants are idled and workers are jobless.