November 26, 2011 NAM Plan for a Manufacturing Renaissance

Volume 14 | Issue 3

As Washington fiddles, the National Association of Manufacturers developed a four-point agenda to foster strong and sustained economic growt

For years now, Washington has been talking about jobs. President Obama came into office with a jobs plan and now is pushing another. It seems as if every bill on Capitol Hill is labeled a jobs bill. And the dominant theme of the 2012 GOP presidential race is shaping up to be the economy.

Despite this nationwide attention to jobs and the economy, we have little to show. Growth is stagnant. Unemployment is stuck at around nine percent. Long-term unemployment poses a serious challenge for our country and the millions of families affected.

The truth is, while Washington is busy talking about jobs, it is becoming harder and harder to do business in our country.

A recent study conducted by the Manufacturing Institute and the Manufacturers Alliance/MAPI concluded that it is 20 percent more expensive to manufacture in this country than in other countries – and that excludes the cost of labor.

When the study was last conducted in 2008, it was 18 percent more expensive to manufacture here. So, amid high unemployment and rising frustration with our elected leaders, Washington has actually made it harder and more expensive to do business in the United States.

The causes of this cost differential are numerous. Regulations, taxes, the lack of an energy policy and the cost of litigation all make it harder to compete with manufacturers abroad. At a time when the United States should be bringing down barriers to competitiveness, it is sitting idle or worse, erecting new barriers.

One significant impediment to US manufacturers’ competitiveness is the country’s failure to reach the 95 percent of consumers who live outside our borders. We should be aggressively expanding our reach into markets abroad, yet the pace of our efforts is slow, even by Washington’s standards.

After four long years, Congress finally approved the free trade agreements with Colombia, Panama and South Korea. Support in Congress for these agreements was overwhelming, but they languished on the desk of President Bush for one-and-a-half years and the desk of President Obama for another two-and-a-half years.

This was a bipartisan failure and four years of missed opportunity for America’s manufacturers. Every day of delay cost manufacturers lost exports and American workers millions in foregone wages and benefits – $8 million daily, in fact.

But even with the enactment of these trade agreements, it’s still too soon to celebrate. Now the Administration must take steps to implement these agreements. Manufacturers will have to wait and see how swiftly the Administration acts. Until then, $13 billion in exports and 100,000 new jobs will be on hold.

In addition to implementing the three recently approved agreements, the Administration should negotiate new deals and conclude its negotiations on the Trans-Pacific Partnership, a free trade agreement among the United States, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. The United States lags behind in negotiating new trade agreements. Of the dozens of free trade agreements being negotiated in the world right now, the United States is party to just one. Our country is ceding market share daily.

Another barrier to US manufacturers’ competitiveness is the onslaught of rules and orders coming from the National Labor Relations Board (NLRB). TheNLRB is a small agency, but manufacturers, as well as other job creators in this country, learned of its outsize power when it charged Boeing with unfair labor practices for setting up a new manufacturing facility in South Carolina.

Even though the complaint was directed at a single manufacturer, other job creators felt the chilling effect. When the National Association of Manufacturers (NAM) asked manufacturers about the implications of the NLRB’s agenda on their operations, 69 percent said it would make it less likely that they would create new jobs.

And the NLRB is not just overreaching by trying to dictate to an employer where it can do business or where it can locate. The agency is overstepping the limits on its power established by Congress as well. The NLRB recently finalized a rule that would require employers to post a notice informing employees that they have the right to unionize or strike. Other agencies—the Occupational Safety and Health Administration, for example—can force employers to post notices because Congress gave them that explicit authority. Congress did not do so for the NLRB.

The NAM is suing the NLRB to rein in its overreach on the posting requirement rule. That case is pending in federal court. Recently, the NLRB agreed to delay the implementation of the rule after the NAM sought an injunction to block it from taking effect.

The country’s lackluster trade agenda and the NLRB’s harmful actions are just two of the many obstacles manufacturers are encountering. When I talk to NAM members, I hear time and again that manufacturers are ready to lead the economic recovery and put Americans to work, but federal policies stand in the way. To create jobs in this country and spur the economy, policymakers must reduce the cost of doing business in the United States.

Manufacturers have a plan to do just that. In October, the NAM released A Manufacturing Renaissance: Four Goals for Economic Growth, a comprehensive policy agenda to advance policies that are important to manufacturers and needed for strong and sustained economic growth.

This plan, which is available on the NAM’s website (www.nam.org), focuses on investment, trade, the workforce and innovation. It sets these common-sense and unifying goals:

• The United States will be the best place in the world to manufacture and to attract foreign direct investment.
• The United States will expand access to global markets to enable manufacturers to reach the 95 percent of consumers who live outside our borders.
• Manufacturers in the United States will have the workforce that the 21st-century economy requires.
• Manufacturers in the United States will be the world’s leading innovators.

Our blueprint lays out the policies that will help manufacturers achieve these goals. Aside from reining in the NLRB and pursuing a robust trade agenda, A Manufacturing Renaissance focuses on tax rates, the nation’s regulatory burden, our nation’s energy supply and manufacturers’ workforce needs.

The plan advocates a reduction in the corporate tax rate to 25 percent or lower. It is simply inexcusable that the United States has the second-highest tax rate among developed nations. We are standing still as other nations adopt competitive rates to attract business. The NAM’s plan also recognizes that 71 percent of manufacturers pay taxes at individual rates and underscores the importance of permanent lower tax rates for small businesses.

It highlights the unachievable and excessive regulations being proposed by the Environmental Protection Agency. These rules will cost jobs—even force entire plant shutdowns in some cases—and will increase energy prices for manufacturers and individuals alike.

The NAM proposes an “all of the above” approach to energy. The United States has abundant sources of energy, but regulations and lengthy permitting processes have placed many of these sources off limits. Manufacturers consume one-third of the nation’s energy output, so accessible and abundant energy is critical to manufacturers.

A Manufacturing Renaissance also calls for investment in science, technology, engineering and math (STEM) education so that the manufacturing workforce will have the skills that the 21st-century economy requires. Today, even as unemployment hovers around nine percent, too many manufacturers are unable to find the workers with the right skills while critical high-paying jobs go unfilled.

Our nation needs a bold and robust jobs plan. The NAM’s Four Goals is an agenda the entire country can embrace. The nation recognizes the importance of manufacturers, and our plan will help them succeed and create the growth and jobs we all want and need for the United States to maintain its mantle of economic leadership in the world.

Jay Timmons is president and chief executive officer of the National Association of Manufacturers (NAM) and a leading advocate for the nearly 12 million Americans employed in the manufacturing sector. NAM is the largest US manufacturing association. Its mission is to foster a stronger economy by enhancing the competitiveness of American manufacturers. To learn more about the organization, visit www.nam.org.

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