Archive for September, 2011

U. S. Lost 1.9 Million Manufacturing Jobs due to Trade Deficit with China

Tuesday, September 27th, 2011

According to a study released on September 20, 2011 by the Economic Policy Institute, the U.S.-China trade deficit has eliminated or displaced nearly 2.8 million jobs, of which 1.9 million or 70 percent were in manufacturing.

The study, “Growing U.S. trade deficit with China cost 2.8 million jobs between 2001 and 2010” by Robert Scott, EPI’s director of trade and manufacturing policy research, writes, “Since China entered the World Trade Organization in 2001, the extraordinary growth of U. S. trade has had a dramatic effect on U.S. workers and the domestic economy.”

The trade deficit with China grew from $84 billion in 2001, when China entered the WTO, to $278 billion in 2010.  It eliminated or displaced 2,790,100 jobs, or about 2 percent of total U.S. employment over that period. All 50 states, the District of Columbia and Puerto Rico suffered jobs lost or displaced as a result of the growing U.S.-China trade deficit.  The 10 states that suffered the biggest net losses were California (454,600 jobs), Texas (232,800), New York (161,400), Illinois (118,200), Florida (114,400), North Carolina (107,800), Pennsylvania (106,900), Ohio (103,500), Massachusetts (88,600) and Georgia (87,700). ).  These losses comprise more than 2.2 percent of total employment.

A total of 453,100 jobs were lost or displaced from 2008 to 2010 alone—even though imports from China and the rest of world collapsed in 2009 during the height of the global financial crisis.  In fact, the report notes the U.S. trade deficit with China increased $8 billion during the great recession, despite a collapse in world trade at that time.

The largest share of manufacturing jobs lost or displaced were in computer and electronic parts, accounting for more than 44 percent of the $194 billion increase in the U. S. trade deficit with China between 2001 and 2010.  In 2010, the total U.S. trade deficit with China was $278.3 billion, of which $124.3 billion was in computer and electronics parts.  This growth of the trade deficit resulted in the loss of 909,400 jobs in these industries.

Apparel and accessories lost 178, 700 jobs, textile fabrics and products lost 92,300 jobs, fabricated metal products lost 123,900 jobs, plastic and rubber products lost 62,000 jobs, motor vehicles and parts lost 49,300 jobs, and miscellaneous manufactured goods lost 119,700 jobs.   The job displacement estimates in the report are conservative and represent only the direct and indirect jobs displaced by trade and exclude jobs in domestic wholesale and retail trade and advertising.

“Global trade in advanced technology products—often discussed as a source of comparative advantage for the United States—is instead dominated by China,” the report concludes.  The U.S. had a new record $94.2 billion trade deficit in Advanced Technology Products (ATP) with China in 2010 compared to a $40.7 billion trade deficit in 2007, an increase of 45.5 percent in three years.  In contrast, the United States had a $13.3 billion surplus in ATP with the rest of the world in 2010.

The impact of the trade deficit with China extends beyond U.S. jobs lost or displaced, according to the Alliance for American Manufacturing (AAM). Competition with China and countries like it has resulted in lower wages and less bargaining power for U.S. workers in manufacturing and for all workers with less than a four-year college degree.

Cheap labor may well be the main reason for China’s manufacturing advantage, but the report cites illegal currency manipulation as a major cause of the rapidly growing U.S. trade deficit with China.  Unlike other currencies, the Chinese yuan does not fluctuate freely against the dollar, but is artificially pegged in order to boost China’s exports.  While the cost of labor affected China’s exports, the currency manipulation, which happened despite China joining the World Trade Organization in 2001, distorted its imports.

American policymakers have long assumed that as China’s huge middle class grew, U.S. companies’ sales to these new consumers would also grow.  But it did not work out that way, the EPI reports: “as a result of China’s currency manipulation and other trade distorting practices, including extensive subsidies, legal and illegal barriers to imports, dumping and suppression of wages and labor rights, the envisioned flow of U.S. exports to China did not occur.”  Added to its labor cost advantage, this currency manipulation has been devastating to many U.S. companies.

China’s currency manipulation, state-owned enterprises, heavy industrial subsidies, intellectual property theft and piracy, indigenous innovation policies, rare earth mineral export restrictions and other trade-distorting practices have caused China’s share of the total U.S. non-oil goods trade deficit to soar from 69.6 percent in 2008 to 78.3 percent in 2010.

“Unless China raises the real value of the yuan by at least 28.5 percent and eliminates other trade distortions,” the report concludes, “the U.S. trade deficit and job losses will continue to grow rapidly.”

“This report offers conclusive evidence that immediate action by the Administration is needed to curb China’s currency manipulation, which, along with China’s blatant trade violations, are having the same devastating impact on high-tech production that they’ve already had on the nation’s longstanding industrial base,” said Scott Paul, executive director of the Alliance for American Manufacturing (AAM), a partnership of America’s leading manufacturers and the United Steelworkers union.

“We urgently need a national strategy for restoring America’s global leadership in manufacturing,” he added. “Challenging China’s currency manipulation would be an important first step toward developing such a strategy.  It would not only cut unemployment, it would result in a much-needed increase in federal revenue.”

According to a blog notice by the Coalition for a Prosperous America today, Majority Leader Reid has filed for cloture on the Senate currency bill that was filed last week.  This bill is the Brown-Schumer-Graham-Snowe-Stabenow-Sessions-Casey-Burr Currency Exchange Rate Oversight Act of 2011 (S. 1619), which is the consensus bill negotiated among Senators to deal with Treasury’s oversight role as well as the Commerce Department’s role in countervailing duty investigations.  Reid’s announcement means that there will be vote on the cloture on Monday, October 3, 2011, followed by debate on the currency bill and a vote on the bill.  A similar bill, H.R.639, was introduced recently in the House and had 206 co-sponsors as of last week.

The EPI report cites Foreign Direct Investment (FDI) as another key factor in the job loss.  FDI is money invested in China by other countries, such as the United States.  It can take the form of American companies buying or building plants in China to move manufacturing operations to China.  When outsourcing to China first occurred in the mid 1990s, American companies just outsourced parts and assemblies to Chinese companies.   Then, it became the trend to outsource whole product lines to Chinese companies.  The next step was for American companies to buy or build new plants set up as subsidiaries in China to manufacture their products.  The report states that “China is the largest recipient of FDI of all developing countries and is the third largest recipient of FDI over the past three decades, trailing only the United Stated and the United Kingdom.  Foreign-invested enterprises (both joint ventures and wholly owned subsidiaries) were responsible for 55 percent of China’s exports and 68 percent of its trade surplus in 2010.  Outsourcing ? through foreign direct investment in factories that make goods for export to the United States ? has played a key role in the shift of manufacturing production and jobs from the Unites States to China since it entered the WTO in 2001.”

The EPI research does not make a forecast of how many more American jobs may be lost in the future due to China’s manufacturing cost advantages and questionable trade policies.  The damage, of course, did not suddenly end in 2010, and is almost certainly ongoing.  And, of course, “the U.S. is piling up foreign debt, losing export capacity, and faces a fragile macroeconomic environment.”

The report concludes that “the U. S. trade relationship needs a fundamental change.  Addressing the exchange rate policies and labor standards issue in the Chinese economy are important first steps.”

I think it’s high time that these issues are addressed by Congress.  I’ve watched one company after another outsource manufacturing to China in my sales territory in Southern California as a manufacturers’ sales rep for American companies.  I’ve personally witnessed my customers who are engineers and purchasing agents at these companies lose their jobs and have increasing difficulty finding replacement jobs. My career in manufacturing includes the major recessions we have experienced since 1980, and I have never known so many people out of work for so long.  The joblessness problem in the U.S. is so serious that any added erosion of employment opportunities from our trade deficits with China will make a recovery of the American economy all the more difficult.

According to a study released on September 20, 2011 by the Economic Policy Institute, the U.S.-China trade deficit has eliminated or displaced nearly 2.8 million jobs, of which 1.9 million or 70 percent were in manufacturing.

The study, “Growing U.S. trade deficit with China cost 2.8 million jobs between 2001 and 2010” by Robert Scott, EPI’s director of trade and manufacturing policy research, writes, “Since China entered the World Trade Organization in 2001, the extraordinary growth of U. S. trade has had a dramatic effect on U.S. workers and the domestic economy.”

The trade deficit with China grew from $84 billion in 2001, when China entered the WTO, to $278 billion in 2010.  It eliminated or displaced 2,790,100 jobs, or about 2 percent of total U.S. employment over that period. All 50 states, the District of Columbia and Puerto Rico suffered jobs lost or displaced as a result of the growing U.S.-China trade deficit.  The 10 states that suffered the biggest net losses were California (454,600 jobs), Texas (232,800), New York (161,400), Illinois (118,200), Florida (114,400), North Carolina (107,800), Pennsylvania (106,900), Ohio (103,500), Massachusetts (88,600) and Georgia (87,700). ).  These losses comprise more than 2.2 percent of total employment.

A total of 453,100 jobs were lost or displaced from 2008 to 2010 alone—even though imports from China and the rest of world collapsed in 2009 during the height of the global financial crisis.  In fact, the report notes the U.S. trade deficit with China increased $8 billion during the great recession, despite a collapse in world trade at that time.

The largest share of manufacturing jobs lost or displaced were in computer and electronic parts, accounting for more than 44 percent of the $194 billion increase in the U. S. trade deficit with China between 2001 and 2010.  In 2010, the total U.S. trade deficit with China was $278.3 billion, of which $124.3 billion was in computer and electronics parts.  This growth of the trade deficit resulted in the loss of 909,400 jobs in these industries.

Apparel and accessories lost 178, 700 jobs, textile fabrics and products lost 92,300 jobs, fabricated metal products lost 123,900 jobs, plastic and rubber products lost 62,000 jobs, motor vehicles and parts lost 49,300 jobs, and miscellaneous manufactured goods lost 119,700 jobs.   The job displacement estimates in the report are conservative and represent only the direct and indirect jobs displaced by trade and exclude jobs in domestic wholesale and retail trade and advertising.

“Global trade in advanced technology products—often discussed as a source of comparative advantage for the United States—is instead dominated by China,” the report concludes.  The U.S. had a new record $94.2 billion trade deficit in Advanced Technology Products (ATP) with China in 2010 compared to a $40.7 billion trade deficit in 2007, an increase of 45.5 percent in three years.  In contrast, the United States had a $13.3 billion surplus in ATP with the rest of the world in 2010.

The impact of the trade deficit with China extends beyond U.S. jobs lost or displaced, according to the Alliance for American Manufacturing (AAM). Competition with China and countries like it has resulted in lower wages and less bargaining power for U.S. workers in manufacturing and for all workers with less than a four-year college degree.

Cheap labor may well be the main reason for China’s manufacturing advantage, but the report cites illegal currency manipulation as a major cause of the rapidly growing U.S. trade deficit with China.  Unlike other currencies, the Chinese yuan does not fluctuate freely against the dollar, but is artificially pegged in order to boost China’s exports.  While the cost of labor affected China’s exports, the currency manipulation, which happened despite China joining the World Trade Organization in 2001, distorted its imports.

American policymakers have long assumed that as China’s huge middle class grew, U.S. companies’ sales to these new consumers would also grow.  But it did not work out that way, the EPI reports: “as a result of China’s currency manipulation and other trade distorting practices, including extensive subsidies, legal and illegal barriers to imports, dumping and suppression of wages and labor rights, the envisioned flow of U.S. exports to China did not occur.”  Added to its labor cost advantage, this currency manipulation has been devastating to many U.S. companies.

China’s currency manipulation, state-owned enterprises, heavy industrial subsidies, intellectual property theft and piracy, indigenous innovation policies, rare earth mineral export restrictions and other trade-distorting practices have caused China’s share of the total U.S. non-oil goods trade deficit to soar from 69.6 percent in 2008 to 78.3 percent in 2010.

“Unless China raises the real value of the yuan by at least 28.5 percent and eliminates other trade distortions,” the report concludes, “the U.S. trade deficit and job losses will continue to grow rapidly.”

“This report offers conclusive evidence that immediate action by the Administration is needed to curb China’s currency manipulation, which, along with China’s blatant trade violations, are having the same devastating impact on high-tech production that they’ve already had on the nation’s longstanding industrial base,” said Scott Paul, executive director of the Alliance for American Manufacturing (AAM), a partnership of America’s leading manufacturers and the United Steelworkers union.

“We urgently need a national strategy for restoring America’s global leadership in manufacturing,” he added. “Challenging China’s currency manipulation would be an important first step toward developing such a strategy.  It would not only cut unemployment, it would result in a much-needed increase in federal revenue.”

According to a blog notice by the Coalition for a Prosperous America today, Majority Leader Reid has filed for cloture on the Senate currency bill that was filed last week.  This bill is the Brown-Schumer-Graham-Snowe-Stabenow-Sessions-Casey-Burr Currency Exchange Rate Oversight Act of 2011 (S. 1619), which is the consensus bill negotiated among Senators to deal with Treasury’s oversight role as well as the Commerce Department’s role in countervailing duty investigations.  Reid’s announcement means that there will be vote on the cloture on Monday, October 3, 2011, followed by debate on the currency bill and a vote on the bill.  A similar bill, H.R.639, was introduced recently in the House and had 206 co-sponsors as of last week.

The EPI report cites Foreign Direct Investment (FDI) as another key factor in the job loss.  FDI is money invested in China by other countries, such as the United States.  It can take the form of American companies buying or building plants in China to move manufacturing operations to China.  When outsourcing to China first occurred in the mid 1990s, American companies just outsourced parts and assemblies to Chinese companies.   Then, it became the trend to outsource whole product lines to Chinese companies.  The next step was for American companies to buy or build new plants set up as subsidiaries in China to manufacture their products.  The report states that “China is the largest recipient of FDI of all developing countries and is the third largest recipient of FDI over the past three decades, trailing only the United Stated and the United Kingdom.  Foreign-invested enterprises (both joint ventures and wholly owned subsidiaries) were responsible for 55 percent of China’s exports and 68 percent of its trade surplus in 2010.  Outsourcing ? through foreign direct investment in factories that make goods for export to the United States ? has played a key role in the shift of manufacturing production and jobs from the Unites States to China since it entered the WTO in 2001.”

The EPI research does not make a forecast of how many more American jobs may be lost in the future due to China’s manufacturing cost advantages and questionable trade policies.  The damage, of course, did not suddenly end in 2010, and is almost certainly ongoing.  And, of course, “the U.S. is piling up foreign debt, losing export capacity, and faces a fragile macroeconomic environment.”

The report concludes that “the U. S. trade relationship needs a fundamental change.  Addressing the exchange rate policies and labor standards issue in the Chinese economy are important first steps.”

I think it’s high time that these issues are addressed by Congress.  I’ve watched one company after another outsource manufacturing to China in my sales territory in Southern California as a manufacturers’ sales rep for American companies.  I’ve personally witnessed my customers who are engineers and purchasing agents at these companies lose their jobs and have increasing difficulty finding replacement jobs. My career in manufacturing includes the major recessions we have experienced since 1980, and I have never known so many people out of work for so long.  The joblessness problem in the U.S. is so serious that any added erosion of employment opportunities from our trade deficits with China will make a recovery of the American economy all the more difficult.

 

 

 

 

 

 

imX Event Charts New Course for American Manufacturing

Tuesday, September 20th, 2011

Last week, I attended the imX (interactive manufacturing eXperience) in Las Vegas (September 12-14, 2011.)  The imX was jointly sponsored by the Society of Manufacturing Engineers (SME) and the American Machine Tool Distributors’ Association (AMTDA).  The event had eight eXperience partners:  DMG/Mori Seiki U.S.A., Fanuc, Kennametal, MAG IAS LLC, Makino, Methods Machine Tools, Okuma America, and Sandvik Coromant, as well as strategic media partner, Manufacturing Engineering, and three media sponsors, www.cnc-west.com, Micro Manufacturing, and Cutting Tool Engineering.

It was different than any other trade show that I have attended in the past 30 years.   What made it different was that the whole focus of the show was benefits for the attendee instead of focusing primarily on benefits to the exhibitors.  Traditional shows concentrate on bringing as many attendees as possible to the show to be sales leads for the exhibitors and may offer some technical sessions as an added draw to increase attendance.  To attend imX, you had to be invited as a guest by one of the sponsors, the eights partners, or other exhibitors in the event. The goal of imX was to chart a new course for the future of the domestic manufacturing industry by fostering collaboration among American Manufacturers of all sizes.

SME President, Paul Bradley, PE, said that this event was in development for five years.  The imX team spoke with members and customers to discover what they wanted and needed from an event. AMTDA and the eight eXperience partners identified the needs of their members and customers.  Individual meetings and group discussions between exhibitors and attendees were identified as key needs to provide a higher level of customer engagement and education to create an event that was unlike any other.  For the first time, the manufacturing industry came together not as competitors, but as collaborators with the common goal and focus of long-term industry viability.  The participants had the opportunity to meet to discuss and foster an understanding of the challenges and opportunities facing their customers and their competition and to explore the latest manufacturing technology.

imX event manager, Steve Prahalis said  that their survey of exhibitors and buyers revealed that some hadn’t been to a show in as long as five years.  Instead, they were attending corporate technical sessions at plants around the country.  They got together a roundtable of CEO’s over a period of three years to come up with ideas for a new kind of event that would be invitation only and incorporate the kind of experience the corporate technical sessions provided, but in one location and one time.

For decades, trade shows for the manufacturing industry were events at which you either exhibited or attended every year.  If you didn’t, you would be missing out on the latest trends in your industry, missing out on getting new sales leads, and missing out on networking opportunities with peers in your industry.  For show managers, it was easy to sell booth space because trade shows were the “in” thing to do, and attendance at some shows like COMDEX was as high as 250,000.

According to Prahalis, two major events changed trade shows forever:   the internet and 9/11.  It became possible to keep up with industry trends and find out information about potential sources for equipment, products and services on the internet.  If 9/11 and the subsequent recession caused you to miss a trade show, you discovered it didn’t matter as much as you thought it would.  You may have missed the networking opportunities, but LinkedIn and Facebook became the replacements.

This is why education received major emphasis at imX in the form of Learning Labs presented by the eight eXperience partners and “knowledge bars” provided by other exhibitors.  The Learning Labs provided a small setting where buyers and sellers could share information on business-critical solutions.  Each partner had from one to four theaters scheduled at one to five time slots during the three days of the event.  A few examples of the topics are:  Delivering Productivity from Art to Part, Tooling Trends and Technologies, The Fearless Use of Today’s Technology, and Training within Industry.  The Knowledge Bars were intimate sessions to discuss such trends and topics as:  manufacturing software, automation, machining, energy, aerospace and defense manufacturing, and medical manufacturing. .   Invited attendees were able to sign up ahead of time for technical sessions in the Leaning Lab and “knowledge bars.”

There was a keynote presentation and an interactive industry panel scheduled each day.  The keynote presentation on the first day featured the newly appointed National Institute of Standards and Technology (NIST) Chief Manufacturing Office, Michael Molnar.  Mr. Molnar shared information about how individual manufacturers can participate in and benefit from the new national Advanced Manufacturing Partnership recently launched by President Obama.  According to the Department of Commerce, the Partnership “brings industry, universities and the federal government together to invest in emerging technologies…building domestic manufacturing capabilities to create the new products, new industries and new jobs for our future.”

The second day’s keynote presentation featured Peter Schutz, Harris & Schutz Inc., author of The Driving Force and retired CEO of Porsche AG.  Mr. Schutz led Porsche to its peak performance during the 1980s and shared his thoughts on how the leadership of people in a company becomes the pivotal competitive edge for business in his address:  “Leadership:  Extraordinary results from ordinary people.”  I especially liked it when Mr. Schutz said, “Only you can create jobs, nobody in Washington can do it.”    He emphasized the importance of putting together a team that has “diversity,” of views, attitudes, priorities, and outlook so you can listen and learn from others in making decisions.  He advised to “always hire character and teach skills.”  He said, “labor costs globally will equalize and transportation costs are going to be critical…quality instead of cost and outperforming will become more important.”

On the third day, the keynote presenter was Jim Carroll, acknowledged as one of the world’s leading global futurists, trends, and motivation experts.  In his address on “What do world class innovators do that others don’t?” he outlined eight strategies that world class leaders concentrate on to ensure market success and seize transformative opportunities.  In these rocky times, his admonition to abandon doomsday scenarios, put things in perspective, adopt a realistic view, and don’t be afraid of thinking boldly were especially pertinent.

The interactive panels also provided opportunities for executive guests to engage directly with leading end users and industry observers on topics from future technologies to automation and benchmarking.

On Monday, the panel on “Market & Technology Outlook:  Charting a Course for the Future” featured an interactive discussion focused on the outlook of key markets and how future enabling technologies impact the way many manufacturers do business.  Featured panelists were:

  • William J. Geary, Director of Mid-Body Assembly, the Boeing Company
  • Michael Packer, V. P. Manufacturing Strategy & Technical Integration, Production Operations, Lockheed Martin
  • Peter Schutz, Harris & Schutz Inc.
  • Rob Wideboer, Executive Chairman, Martinrea International
  • Moderator:  Rick Kline Sr., President, Garner Publications, Inc.

On Tuesday, the topic was “The Edge Factor:  Best Practices in Manufacturing Automation,” in which the owners of Straitline Components shared their successful transition from a job shop to creators of  a line of mountain bike components now used by some of the top competitive racers  in the world.  Jeremy Bout, Executive Producer of The Edge Factor show, shared the video on “Mountain Biking …Getting Back to Making America Great,” showing how some of the components were made and  “the edge factor” of the quality, “made in USA” components played in the race won by Mike Montgomery, freestyle mountain bike rider.  Mike Montgomery then commented on the importance of being able to trust his safety and even his life to these quality components.

On Wednesday, the panel shared the results of a comprehensive survey of 200 machining businesses in the panel on “Top Shops:  Benchmarking Your Machining Business.”   The panel identified optimal shop floor practices, as well as operational and business metrics that define world-class competitiveness in parts manufacturing.  Derek Korn, Senior Editor, Modern Machine Shop, Ron Woosel, President, C&R Manfuacturing, Mike Dufford, V. P., Altech Machining participated in the panel moderated by Travis Egan, Publisher of Modern Machine Shop.

On the last day of the show, ImX event manager, Steve Prahalis said that attendees were giving a good rating for the event and had shared some of their experiences.  As an example, the owner of a small company from Ohio got to have a private meeting with the technical team at the Kennemetal exhibit, and they provided a solution to a key problem they were having in their shop.

Judging by what I saw at the event, I would say that ImX succeeded in accomplishing its goal to chart a new course for the future of the domestic manufacturing industry by fostering collaboration among American manufacturers of all sizes.  I am sure everyone who attended this event will look forward to attending the next eXperience.

 

Poll Shows Creating Manufacturing Jobs is Key to Recovery

Tuesday, September 6th, 2011

A July 2011 poll of 1,202 likely voters American voters conducted by The Mellman Group and Ayres, McHenry & Associates revealed that voters want Washington to act on jobs, especially in manufacturing, which they believe will help restore America’s lost status as the world’s number one economy.  Despite overwhelming public concern about these issues, fewer voters now believe the President or either party in Congress is focused on jobs than thought so in 2010.

“This poll is a stark reminder that while official Washington goes back and forth in our newest crisis, Americans still feel no one is focusing on the real problems that matter to them:  losing jobs, losing our manufacturing base, and the decline of our position in the world,” said Scott Paul, Executive Director of the Alliance for American Manufacturing (AAM).

The study finds that across the partisan spectrum, Democratic and Republican voters ranked job creation and rebuilding the nation’s manufacturing base at the top of their list of priorities.  When asked to select the most important task for Congress and the President, “creating new manufacturing jobs” ranked just below creating jobs more generally and saw a bigger gain from 2010 (up 9%) than any other option.

Americans don’t believe that Congress or the President has done enough to support manufacturing.   Poll results showed that by a more than two-to-one margin (67% to 29%) voters prefer that Washington focus on job creation rather than deficit reduction.  This was down from the 2010 poll where 94% of voters wanted Washington to focus on jobs even more than on the deficit, with 85% specifying creating manufacturing jobs, and 88% of voters wanting Congress and the President to strengthen manufacturing in the U. S.

Voters are less convinced than a year ago that Congress and the Administration are doing anything to create manufacturing jobs or to enforce fair trade.  Although manufacturing was again ranked as the most important source of economic strength (by a wide margin over both healthcare and high tech), voters gave both Congress and the President lower marks on creating manufacturing jobs or addressing trade issues than they did in 2010.

AAM’s 2010 poll first demonstrated serious voter concern about factory closings and job loss.  In the 2010 poll, there was very little difference in the opinion of Independents, Democrats, and Republicans (64%, 67%, and 66% respectively) on the viewpoint that “manufacturing is a critical part of the American economy and we need a manufacturing base here if this country and our children are to thrive in the future.”

Said Paul, “Voters see manufacturing as the key to recovery, and though it may surprise some pundits, this is the clear message from every voting demographic, including Tea Party and Republican voters.”

Along with manufacturing’s rising profile, support for “Made in America” has also skyrocketed since 2010.  Pollster Whit Ayres explains, “Americans strongly believe that we cannot be the world’s leading economy and job creator without manufacturing.  They want to be able to buy top-quality products that say ‘Made in America.’”

The poll also found concern over America’s lost standing in the world.  Pollster Mark Mellman says, “Americans no longer believe we have the world’s strongest economy.  But they do believe that a renewed focus on manufacturing jobs can turn things around.  Americans understand that manufacturing is central to creating jobs and getting the economy back on track.”   Some key findings from the poll include:

  • 90% have a favorable view of American manufacturing companies – up 22% from 2010
  • 97% have a favorable view of U. S.-made goods – up 5% from 2010
  • 94% of voters say creating manufacturing jobs is either “one of the most important” things government can do or “very important.”
  • 83% have an unfavorable view of companies that go to China to manufacture
  • 90% support Buy American policies “to ensure that taxpayer funded government projects use only U. S.-made goods and supplies wherever possible.”
  • 95% favor keeping “America’s trade laws strong and strictly enforced to provide a level playing field for our workers and businesses.”
  • 59% say we need to “get tough with China and use every possible means to stop their unfair trade practices

Only 50% of voters believe that the President is working to create manufacturing jobs – an 11% drop from 2010. Congress fares even worse – 41% say Democrats in Congress are working to create jobs, and 32% see the GOP working to create jobs.
In an Op Ed article, “How Congress can start creating jobs in the U.S,” that appeared August 15, 2011 in The Hill, Mr. Paul made the following recommendations of what Congress could do to spur private sector job creation that would not increase our federal budget deficit.

“Establish a national infrastructure bank to leverage capital for large-scale transportation and energy projects.

Reshape the tax code in a revenue neutral way to provide incentives for job creation and inward investment.  R&D tax credits should help firms that not only innovate in America but also make their products here.  Lower tax rates for manufacturing activity in America and eliminate tax shelters for hedge funds or financial transactions that have no real value.

Apply “buy America” provisions to all federal spending to ensure that American workers and businesses get the first shot at procurement contracts.

Shift some education investment to rebuilding our vocational and technical skills program, which would address looming shortages in the manufacturing sector.

Refocus the trade agenda by giving American businesses new tools to counter China’s currency manipulation, industrial subsidies, intellectual property theft and barriers to market access.

Condition new federal loan guarantees for energy projects on the utilization of domestic supply chains for construction.

In addition, President Obama could do the following on his own immediately:

Expedite small business loans through the Small Business Administration and Treasury Department to help firms expand, retool and hire.

Convene a multilateral meeting to address global imbalances and Chinese mercantilism. If China doesn’t agree to participate, designate it a currency manipulator. (China ships fully one-third of its exports to the U.S. and finances less than 10 percent of our public debt, so we have more leverage than some might suggest.)

Secure an additional agreement from all foreign and domestic car companies to increase their levels of domestic content by at least 10 percent over the next three years.

Direct the Department of Defense to leverage existing procurement to contractors that commit to increasing their domestic content of our military equipment, technology and supplies.

Approve additional applications for renewable and traditional energy projects, contingent on the use of American materials in construction.

Kick any CEO off of federal advisory boards or jobs councils who has: (1) not created net new American jobs over the past five years, or (2) is expanding the company’s foreign workforce at a faster rate than its domestic workforce. Replace them with CEOs who are committed to investing in America.”
In contrast,  Henry Nothhaft, veteran entrepreneur and author of  Great Again: Revitalizing America’s Entrepreneurial Leadership (Harvard Business Review Press, 2011) had some very different suggestions for President Obama in a Labor Day letter to President Obama published in the Wall Street Journal.  Since “100% of net job growth in the U.S. comes from entrepreneurial start-ups.” he asked:

“…why aren’t you doing everything you can to nurture start-ups and make it easier for them to access capital, grow and hire people so they can develop the breakthrough products, services and medical advances that drive our national prosperity?

He urged the President “to seek an exemption for small job-creating start-ups from the more onerous Sarbanes-Oxley rules, at least until they reach $500 million in revenues. This will help to revive the feeble IPO market, and job creation with it.”

He suggested the President and his “Republican opponents could also spur job creation by withdrawing your support for a patent-reform bill that puts the needs of big technology firms ahead of the real job creators—entrepreneurial start-ups—and that continues to divert hundreds of millions of dollars annually in patent-office user fees to other purposes …Congress has starved it of funds and created a backlog of 1.2 million patent applications waiting for examination. Your own patent office director, David Kappos, says this backlog has cost the nation “millions of jobs.”

He questioned  “why are we the only major nation on Earth that refuses to offer tax and other incentives to manufacturers who set up shop here? Every other nation in the Organization for Economic Cooperation and Development does so.”

None of the measures suggested by Mr. Paul or Mr. Nothhaft would increase the deficit.  They would work to create millions of new jobs quickly.  I agree with Mr. Nothhaft ? “Mr. President, there’s still time for you to kick-start the engine of job growth.  All you need to do is listen to the voices of entrepreneurs who create those jobs.”