Zero Manufacturing Jobs Added — Zero

In this Dec. 14, 2011 photo, a line worker moves an engine on the assembly line for a Ford Focus at the Ford Michigan Assembly plant in Wayne, Mich. (AP Photo/Paul Sancya)President Obama set a goal of 1 million new manufacturing jobs in his second term. Last month we added zero. Not one. Nada. Zip. We did add low-wage jobs, though. Maybe we can talk about a national manufacturing strategy now?

A Million Manufacturing Jobs?

In the 2012 campaign President Obama set a goal of creating 1 million new manufacturing jobs. (This goal comes after the country lost 5.5 million manufacturing jobs between 2000 and 2009.) Manufacturing jobs bring money into the economy. Manufacturing jobs also bring along with them many jobs in other sectors that support manufacturing, from the supply chain to the maintenance to the marketing and sales of the goods. This is what the president understood when he set this goal.

But with the March jobs numbers out this morning the economy has created a total of only 39,000 manufacturing jobs this year — zero in March. That leaves the country with 961,000 manufacturing jobs to go in the time remaining.

Perhaps this dearth of new manufacturing jobs has something to do with the economic stagnation we see around us?

Job Report Summary

While the jobs report was not too bad overall, it was terrible for manufacturing. Job growth for January and February was revised up by 114,000, so average job growth for the last three months was 212,000. But job gains were largely in low-wage sectors with zero gained in manufacturing. Employment services, restaurant employees and the retail sector accounted for more than half of April job growth. Health care added 19,000 jobs.

The sequester started to hit, with 8,000 jobs lost in the federal government (3,500 of those from the Postal Service.) State and local governments lost 3,000 jobs, which means 224,000 jobs lost over the last year. Construction lost 6,000 jobs, apparently from public projects.

The #AAMeter Manufacturing Jobs Tracker

The Alliance for American Manufacturing (AAM) Jobs Tracker — the #AAMeter — tracks progress toward the president’s goal of adding 1 million manufacturing jobs. AAM uses the monthly jobs report data to keep track of how we are doing towards reaching the 1-million-jobs goal, which would require an average monthly increase of 20,833 manufacturing jobs. The picture tells the story.

Not so great. What do we need to do to boost our manufacturing sector, bringing better-paying jobs and the jobs that support manufacturing?

First We Need A National Manufacturing Strategy

We need more jobs, higher-wage jobs, and jobs in sectors that do more for the economy. This requires a national manufacturing strategy.

Other countries have national strategies to increase the strength of their national manufacturing sector. We do not. We are wedded to an ideology that says that we as a nation should not protect our good-paying jobs and our manufacturing sector. In fact, the “free-market” and “free-trade” ideology even says it is wrong to have a strategy as a country to keep and strengthen our important economic sectors.

Alliance for American Manufacturing’s Scott Paul said, “The United States is the only major industrial nation that does not have a cohesive national manufacturing strategy. We’ve outlined steps the president should to help meet his manufacturing jobs goal. If the Administration and Congress show a genuine willingness to act on these common sense policies, we’ll see our Jobs Tracker move toward 1 million jobs gained.”

Democrats in Congress have, in fact, outlined a Make It In America legislative plan,

The Democrats’ Make it in America plan is a bold initiative to get America working again by building the products of the future here at home. Make it in America will create the conditions necessary to unleash American skill and ingenuity to power our 21st century economy. As President Obama has said, America must out-innovate, out-educate, and out-build the rest of the world and our initiative will help our nation do just that. When we Make it in America, American families will make it too.

Democratic Whip Sten Hoyer has been a leader in promoting the Make It In America agenda, with a Make It In America web page as well.

Ideology, or Something Else?

But here is the thing: everything is being blocked by Republican obstruction in the name of “free market” and “free trade” ideology.

And here is the other thing: those who are driving and funding the ideology are making big money off of the damage this ideology is doing! The financial sector funds much of the push to “free trade” and against a national manufacturing strategy. And as a result the financial sector is soaring at the expense of manufacturing and the jobs it brings. The oil and coal industries are funding much of the fight against alternative energy, energy efficiency, green manufacturing and the jobs it brings. And as a result the oil and coal sectors are booming at the expense of the rest of the economy.

The Koch brothers alone gained $15 billion — a 43 percent increase — between March 2010 and Sept 2011. Are their motives really ideological? It turns out to be a very profitable ideological agenda for them.

And we don’t even know if other countries are helping drive America’s ideological opposition to national strategies by funding the right-wing “free market” “think tanks” that push it, because the funding for these efforts is not disclosed.

Other Steps

Along with implementing a national manufacturing strategy there are many other things we can do to promote our manufacturing sector to revive our economy and create meaningful, good-paying jobs. Among these:

Tax policies: End the tax incentives that encourage American companies to move jobs, factories and profit centers out of the country. Immediately end the “deferral” of taxes on foreign income. Companies get a tax advantage on foreign profits over profits they earn here, so they more operations out of the country.

The big one in tax policy is offshore tax deferral: Companies are currently holding $1.7 trillion out of our economy and away from shareholders, just because we let them avoid taxes until the bring it back. So they move profit centers of tax havens, etc. Repeal this deferral and make them bring that money home now and stop moving profit centers out of the country from now on.

Other tax policies that would help: Section 199 Domestic Production Deduction; Accelerated Cost Recovery; Depletion Allowances; Net Operating Losses; Last-In, First-Out Accounting; Interest Cost Deductibility; Research & Development Tax Credit; Current Tax Treatment of Employee Health Care and Pension Contributions; Credit for Prior Year Minimum Tax.

Currency manipulation: Countries like China manipulate their currency to give them a price advantage in international markets. This must stop. There are steps we can take to stop this but our administration is hog-tied by foreign policy needs that conflict with our country’s trade-balance needs. For example they can’t crack down on China and then ask China’s help with North Korea. The answer is for Congress to pass a law requiring balancing tariffs on goods from countries that manipulate currency.

Buy American policies: Congress and states should improve Buy American requirements in procurement. Our tax dollars should boost our economy.

A recent example — Reps. Pete Visclosky (D-IN) and Tim Murphy (R-PA) have introduced the American Steel First Act of 2013, a bill to require the Department of Transportation, the Department of Defense, and the Department of Homeland Security to exclusively use American-made iron and steel in infrastructure projects.

Defense procurement especially needs Buy American requirements. Contractors should be required to increase their domestic procurement. This is about national security vulnerabilities just as much as about our tax dollars supporting our economy.

Fix and modernize our country’s infrastructure: We could have full employment right away if we just did what we need to do anyway and will have to do eventually. Maintain and modernize our infrastructure (with American-made supplies.) Our infrastructure is crumbling. We need to completely modernize our infrastrucutre so our economy is competitive, and in the process we will revitalize jobs and manufacturing.

Invest in education: To improve our high schools, colleges and universities. We need 21st century education with a renewed focus on manufacturing in America.

Invest in energy efficiency and green manufacturing: There is a green revolution taking place in the world and we are not in the lead. The President’s 50mpg mandate is a great start, but we need renewable energy standards, tax credits for alternative energy, and policies to promote green manufacturing, especially working to capture a share of wind, solar, advanced battery, electric car and similar manufacturing.

Dave Johnson is a fellow at the Campaign for America’s Future (CAF) and the Commonwealth Institute, and is a Senior Fellow at the Institute for the Renewal of the California Dream.

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