Reposted from The Dayton Daily News
*******
New views, policies lift manufacturing sector
Steve Bennish | February 4, 2012 | The Dayton Daily News
A new and more positive public attitude is building toward manufacturing in the United States after decades of job losses that led some to believe the economic sector was doomed.
Part search for solutions to a slow recovery from the longest of all post-World War II recessions, part cultural shift, the change is evident in a bipartisan national survey, reoriented political views and a flurry of local activity.
“People are realizing we actually have to make things here,” said Angelia Erbaugh, president of the Dayton Regional Manufacturers Association. Erbaugh sees the opinion swing as a path to the vital job of recruiting youth to a career. “We have an opportunity now that people outside manufacturing are paying attention again. We have to seize this opportunity, particularly on the career side.”
For Bill Lukens, CEO and owner of manufacturer Stillwater Technologies in Troy, it’s time for policies to foster more domestic production.
“Finally, people are realizing — the president and his administration and both parties, everyone — that it’s time to level the playing field. And that has been past due frankly,” he said. “But we’re still losing jobs, and still going off shore.”
This is a critical moment, said Eric Burkland, president of the 1,600-member Ohio Manufacturers’ Association.
Ohio manufacturing, once left for dead, is now a matter of priority for government officials.
“There is a sentiment developing and if we seize the moment, we can experience the renaissance of American manufacturing,” he said.
The past 30 years has seen manufacturing jobs drop from 19.5 million to 11.8 million.
Ohio lost 3,500 factories in 10 years, the number of manufacturing operations falling 18 percent from 19,697 to 16,159. That has led to the loss of 369,097 jobs in Ohio since 2001, federal figures show.
President Obama in his State of the Union address used the term “manufacturing” 18 times, struck a theme of reversing the offshoring trend, and talked up the resurgent auto industry.
“Today, General Motors is back on top as the world’s No. 1 automaker. Chrysler has grown faster in the U.S. than any major car company. Ford is investing billions in U.S. plants and factories. And together, the entire industry added nearly 160,000 jobs. What’s happening in Detroit can happen in other industries.”
Ohio Gov. John Kasich said Friday that it’s urgent the manufacturing industry better communicate anticipated work force needs to education and government, saying the situation is a “total breakdown in work force training.” But he called the issue “all fixable” with cooperation. “If a company doesn’t tell me what they need, how do we fix it? People gloss over the hard stuff. Things like this don’t happen by accident,” Kasich said.
New employment figures released Friday show that U.S. manufacturing gained 50,000 jobs in January 2012 — the biggest montly gain in that sector since August 1998.
“The surge in job growth is a clear sign that American manufacturing can be competitive globally, said Scott Paul, executive director of the Alliance for American Manufacturing. “President Obama is right to focus on an array of policies to boost domestic manufacturing jobs, and we need Congress to act. There is still a long way to go to get manufacturing jobs and output above prerecession levels.”
John Russo, coordinator of labor studies at Youngstown State University, sees the discussion being driven by frustration over high unemployment, which his research puts far higher than the official figure when the discouraged and underemployed are counted.
“I would argue to you we are in a depression,” he said. “There is an enormous amount of discontent and they are looking for answers. Obama’s speech was an attempt to find a middle road through this with tax cuts and helping small business people.”
A national poll of 1,200 likely voters jointly conducted by Democrat pollster the Mellman Group and Republican pollster Ayres, McHenry & Associates found that when given an “either/or” choice, 29 percent wanted Washington to focus on deficit reduction while 67 percent favored job creation.
Creating manufacturing jobs was the top priority selected for Obama and respondents rejected the idea that high tech or service jobs could replace manufacturing.
More importantly, the poll said, there’s intensifying bipartisan agreement for “Buy American” policies and ending trade that favors foreign goods.
“What this survey demonstrates is Americans believe a strong manufacturing sector is a central requirement of a strong economy,” pollster Mark Mellman said Thursday. “The public is willing to take a wide variety of measures to strengthen manfuacturing because they realize it is central to our economic health.”
In his State of the Union, manufacturing revival was the president’s unifying theme. He proposed a policy shift to change tax laws to reward companies bringing jobs back to the U.S. and eliminate tax breaks for companies that shift business offshore.
But for Ohio, the challenge is great given the magnitude of losses and slow pace of recovery. The Ohio Department of Job and Family Services reported in January that in 12 months, nonfarm wage and salary employment grew by 72,400, with manufacturing’s share at 18,300 jobs.
However, an encouraging study last year by The Boston Consulting Group, a global management consulting firm, highlighed favorable trends. It concluded that within the next five years, “the United States is expected to experience a “manufacturing renaissance” as the wage gap with China shrinks and certain U.S. states become some of the cheapest locations for manufacturing in the developed world.”
The study predicted less labor-intensive products made in modest volumes are most likely to return to domestic production, such as household appliances and construction equipment. It said labor-intensive goods produced in high volumes, such as textiles, apparel, and TVs, would likely continue to be made overseas.
Hi Steve – This line here, “What this survey demonstrates is Americans believe a strong manufacturing sector is a central requirement of a strong economy” – THANK YOU. I work for a flange manufacturer here in Houston and wholeheartedly agree with this statement.
Anyhow, thanks for sharing! – Aly
More than welcome Aly.
You can follow me on Twitter at ohiojobswatch !
There is no choice but to manufacture. You can’t eat an apple unless its grown just like Americans can’t buy cars unless they make cars or make enough goods in equivalent value to trade for cars. The ideal of a post-industrial economy is a fallacy.
The following paragraphs from Gerard Jackson’s article, “Blame Keynes Not China for America’s Economic Mess” describes perfectly how manipulated exchange rates can distort the economy:
A country that runs an overvalued currency for a lengthy period will find its production structure becoming more domestic oriented: its export industries will decline and imports will rise.In such an economy one should expect to witness the emergence of a “rustbelt” accompanied by an excessive expansion of the financial and service sectors along with delirious claims that the economy has now entered a “post-industrial” phase. The irony is that this process was accurately described 77 years ago. (Friedrich von Hayek, Money, Capital and Fluctuations: Early Essays, Routledge & Kegan Paul, 1984, pp. 150-2.) More than 80 years ago Bresciano-Turroni noted how a rapid and sustained monetary expansion could expand the financial sector:
The increase in banking business was not the consequence of a more intense economic activity. The work was increased because the banks were overloaded with orders for buying and selling shares and foreign exchange, proceeding from the public which, in increasing numbers, took part in speculations on the Bourse. The banks did not help in the production of new wealth; but the same claims to wealth continually passed from hand to hand. (Bresciano-Turroni, The Economics of Inflation: A Study of Currency Depreciation in Post-War Germany, John Dickens & Co LTD, 1968, p. 404).
Barack Obama is a master BS artist. He has zero interest in bringing back manufacturing or in reviving the middle class, but he can throw out enough “hopeful” sound bites to keep us distracted for the next nine months. After that, it will be too late.
Manufacturing is NOT COMING BACK — unless our government imposes either “balanced trade,” (Google it) or serious tariffs on Chinese goods.
It’s only going to get worse. Anything that can be manufactured can and will be manufactured in China, at one tenth the cost of what we can manufacture it for. Arguments about currency manipulation and tax policies are merely distractions that will keep “the folks” confused and hopeful for the next nine months.
As to the Boston Consulting Group’s suggestion that Chinese wages will catch up to U.S. manufacturing wages within five years, they are either shills for the Chinese, or for the “progressives,” who don’t want manufacturing to come back, or they are simply, horribly, wrong. It took fifty years of strong labor unions battling with weak management during a time of little competition for our manufacturing wages to reach their present levels. In China, there are millions of people willing to work for FIFTY CENTS an hour, whereas, our UAW workers cost about FIFTY BUCKS an hour, and our typical manufacturing wage is around fifteen bucks an hour, plus benefits. Even our minimum wage is fifteen times China’s “minimum” wage.
It gets worse. Those service jobs that were supposed to be our salvation are also being offshored. The following is from a report to the governor of New York:
“. . . a substantial number of U.S. jobs are potentially at risk of being offshored beyond the next few years, because they are in industries particularly susceptible to this phenomenon. Princeton economist Alan Blinder estimates 42 million-56 million jobs are potentially at risk of being offshored over the next 10-20 years – this is the equivalent of roughly 30-40 percent of all current U.S. jobs.”
http://www.labor.ny.gov/stats/PDFs/Offshore_Outsourcing_ITJobs_NYS.pdf
There is more compelling evidence for the Loch Ness Monster than there is for the return of U.S. manufacturing.