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New Federal “Make It In America Challenge”

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Reposted from the Campaign for America’s Future blog.

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New Federal “Make It In America Challenge”

Dave Johnson  |  September 28, 2012  |  Campaign for America’s Future

The Department of Labor has announced a new “Make it in America Challenge” to American businesses, to “to accelerate the trend of insourcing, where companies are bringing jobs back and making additional investments here in America.” The challenge is a national competition, funded with $40 million, that will distribute approx 15 awards to companies that meet the challenge and bring jobs home.

To be eligible for an award, projects must encourage insourcing through onshoring of productive activity by U.S. firms, fostering increased foreign direct investment or incentivizing U.S. companies to keep their businesses and jobs here at home, as well as train local workers to meet the needs of those businesses.

Announcing the Challenge, Commerce Secretary Rebecca Blank said,

“This administration’s top priority is creating American jobs, and through the Make it in America Challenge, we will be supporting business’ efforts to expand here at home,” Blank said. “By making competitive investments, the Challenge will help communities across the U.S. accelerate economic growth, attract business investment, and create jobs.”

In the White House Blog post, Administration Teams Up to Bring Jobs Back to America, Commerce and Labor Secretaries Rebecca Blank and Hilda Solis wrote,

Beginning next year, three-year grants will be available to states, cities, nonprofits, colleges and economic development districts that develop plans to help attract companies that want to build in the U.S. but might need a few more resources.

… This is going to be a coordinated, multi-agency effort to promote job creation and expand domestic production. The fact is, when we travel here and abroad, we are hearing from business owners that now is the right time to invest in America. It’s the right time because with both foreign labor costs and international shipping costs on the rise, it makes sense for the company’s bottom line. But it’s also the right time because our workforce remains the most skilled and most dedicated there is. And the U.S. energy outlook has never been brighter, with growing supply and falling prices.

8 Responses to “New Federal “Make It In America Challenge””

  1. The Protectionist says:

    Sky-high tariffs will save you $40 million and bring every single industry home. Is it really to complex for anyone to grasp?

  2. Arthur Taylor says:

    What about a reward for those of us who never left in the first place? How about plaque for those of us who refused to drink the free trade, offshoring Kool Aid?

  3. Bruce Bishop says:

    Sure. Why not create one more redundant federal agency to compete with a well-established organization that is just about to run out of manufacturing jobs to retain. As to creating jobs, no one in their right mind would consider a manufacturing venture while the country is drifting in the direction of national socialism.

    In case you weren’t aware that an organization like the one proposed above already exists, here is some information from the U.S. Commerce Department’s NIST website:

    “The National Institute of Standards and Technology’s Hollings Manufacturing Extension Partnership (MEP) works with small and mid-sized U.S. manufacturers to help them create and retain jobs, increase profits, and save time and money. The nationwide network provides a variety of services, from innovation strategies to process improvements to green manufacturing. MEP also works with partners at the state and federal levels on programs that put manufacturers in position to develop new customers, expand into new markets and create new products.”

    “MEP field staff has over 1,400 technical experts – located in every state – serving as trusted business advisors, focused on solving manufacturers’ challenges and identifying opportunities for growth. As a program of the U.S. Department of Commerce, MEP offers its clients a wealth of unique and effective resources centered on five critical areas: technology acceleration, supplier development, sustainability, workforce and continuous improvement.”

    “As a public/private partnership, MEP delivers a high return on investment to taxpayers. For every one dollar of federal investment, the MEP generates around $30 in new sales growth. This translates into $3.6 billion in new sales annually. For every $2,067 of federal investment, MEP creates or retains one manufacturing job.”

    http://www.nist.gov/mep/about.cfm

  4. Tom T. says:

    If only the USTR could put in as much effort in making sure the labor and environmental standard imposed on U.S. manufacturers was imposed on foreign manufacturers, this MIGHT be a good investment.

    I don’t think they are even trying. Our trade deals don’t include these costs so you will continue to have Foxconns making the world’s largest company products to sell in the most lucrative market. No amount of bureaucratic “help” can overcome this basic policy failure.

    Tom T.

    • Bruce Bishop says:

      Tom,

      According to “Fortune 500″ statistics for 2011, Apple’s profit on revenue was 23.9% while Walmart’s profit on revenue was 3.5%.

      It would appear that Apple has a choice, while Walmart does not. If labor is only 10% of cost, as some on this web site have claimed, Apple could afford to produce the iPhone here.

      The problem goes much deeper than that. For one thing, we no longer have the capability to ramp up production on electronic products because we don’t have the facilities and we don’t have the organized expertise. Moreover, we don’t have the will to do battle with the dozens of government agencies and thousands of regulations that would come into play if we attempted it.

      Products like the iPhone have a very short life cycle. Apple can’t wait for U.S. production to gear up. By the time a U.S. company could produce the first iPhone, it would be obsolete. Foxconn was the only rational choice in a world that moves at the speed of thought. The Chinese have positioned themselves to be the producers of 21st Century products. The U.S. is no longer in the game.

      Thank you for the kind words regarding my other post. Our government has destroyed our engine of wealth creation – manufacturing. This was the theme of “Atlas Shrugged” by Ayn Rand.

      Bruce

      • Tom T. says:

        Bruce, Walmart chooses its profit margin (profit margins can be low if you deal in volume so every industry is different) as a competitive tool. Just because Walmart chooses to do business this way doesn’t justify any immoral, unethical, or illegal activities. If they don’t survive on low margins, then there are competitors who will take their place. I do consider paying your workers so low that they are still categorized as below the poverty line as abusive, although I will have to admit I have treated myself to that position in many of my own businesses from time to time.

        Just because Foxconn and China were the cheapest at producing the Apple products, it in no way excuses the way they treated their labor. There are no market conditions that justify these kind of situations and it should be one of the limiting factors of supply on the market.

        These kind of manufacturing practices should not be able to compete with those products in the U.S. market because of this.

        Tom T.

        • Bruce Bishop says:

          Tom,

          When the choice is either a minimum wage, part-time job, or no job at all, the former can be very attractive.

          When we get beyond the statistics, we find that those people in the bottom quintile of wages are not starving. Many are living with their parents or grandparents, and pay no rent, utilities or household expenses. It’s true, many get “food stamps,” but they often spend those “food stamps” on Doritos, Snickers and Hawaiian Punch because their meals are provided.

          Many are young people whose part-time job covers their car payment, insurance, gasoline and beer.

          Some of them are graduate students who survive on Ramen Noodles.

          My aged aunt, until she passed away at 98, was in that “poorest” 20%. Her only income was her social security check. She lived in a nice, modern home, which was paid for. Her neighbor took her to the store weekly for shopping and she lived comfortably and well for years. She did gripe about the fact that here CDs weren’t earning her any interest, but she didn’t really need the extra income.

          Finally, many of the “poorest” 20% are people who managed to find work for only a portion of the year, or who just started up a business. If you graduate from college in June and start working in October, your $50K salary might only generate enough to put you in the “poorest” 20%.

          As Thomas Sowell says, there are more of the lowest 10% of income who end up in the highest 10% within ten years than remain in the lowest 10%. These brackets are dynamic and to assume they are all “poor” is wrong.

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