Federal Initiatives to Support Reshoring

Federal Initiatives to Support Reshoring

'Manufacturing has been one of the few bright spots in the recovery, and if we are going to meet the President’s goal of creating one million new manufacturing jobs by 2017, we’ll need an aggressive set of policy measures to make that happen,' said Scott Paul, executive director of Alliance for American Manufacturing.

While the U.S. is doing some things right when it comes to encouraging companies to bring manufacturing operations back to the U.S., there is a lot more that needs to be done, according to Scott Paul, executive director of the Alliance for American Manufacturing.

Speaking at the “Reshoring Summit” that was held in Cleveland, Ohio, on March 13 and 14, Paul pointed to efforts to close the skill gap as an example of what the U.S. is doing right. One program he highlighted is the government program called “Skills for the Future Initiative.”

The program, launched in 2010 by President Obama, is an “industry-led initiative to dramatically improve industry partnerships with community colleges and build a nationwide network to maximize workforce development strategies, job training programs and job placement,” according to the White House.

The program matches up employers like PG&E and United Technologies with community colleges to develop curricula that will prepare graduates to excel in the workforce. The President has set a goal of 5 million more community college graduates and certificates by 2020. 

Scott pointed to other programs such as the National Skills Certification program, MEP programs and a renewed focus on STEM education as steps in the right direction to ensure that the manufacturing sector has qualified workers. He was also very enthusiastic about the new Innovation Institute and the government’s commitment to invest $1 billion in 15 of these centers.

Another positive development is that manufacturing is front and center in the public’s conscious starting with the presidential campaign featuring candidates strolling through working factories as opposed to past campaigns that showed factories closing. And the State of the Union address placed a strong spotlight on the sector.

In fact, manufacturing in America is quite popular with the public. In a 2011 poll, conducted by AAM, 97% have a favorable view of U.S.-made goods, which is up from 5% in 2010. And 90% support Buy America policies “to ensure that taxpayer-funded government projects use only U.S-made goods and suppliers wherever possible.”

All of these positive sentiments have lead to more research institutions--public and private--examining manufacturing issues than at any time since the early 1980s. Part of this is due to the fact that this sector has been performing well and is in fact expected to continue to outpace GDP growth.

Since 2010 almost 500,000 jobs have been created.

More needs to be done

“But, a renaissance in American manufacturing is far from certain,” Scott said. He referenced his testimony at a hearing on American Manufacturing and Job Repatriation before the House Committee on Appropriates, last year. “We've regained only a fraction of lost factory jobs, our trade deficit with China in particular is growing and not shrinking, and capacity utilization is still well below pre-recession levels and historic norms.”

The issue of the U.S. trade deficit with China is one that is particularly worrying to Paul. His group points to an Economic Policy Institute report that claims the US-China trade gap has claimed 2.1 million U.S. manufacturing  jobs between 2001-2011. “If Washington spent as much time worrying about the trade deficit as it did the budget deficit, our unemployment rate would be a lot lower than it is right now.”

“Putting pressure on the administration to demand action from the World Trade Organization when trade cheats like China illegally subsidize competitive industries and manipulate their currency to artificially cheapen their exports is one of the more effective strategies to help American manufacturers,” Paul said on the sidelines of the conference.

Other effective strategies on Paul’s wish list for government action include:

  • Making the R&D tax credit permanent
  • Easing access to credit – This is still a problem and a barrier especially for small companies.
  • Building up our infrastructure
  • Providing lower cost energy. He would like to see a bigger push toward renewable energy.
  • Improving gobal procurement. All nations need to allow each other access to their markets.

These points are part of a larger Comprehensive Manufacturing Strategy that the group has been pressing.

Paul remains hopeful that with the right policies manufacturing will continue to grow. “Manufacturing has been one of the few bright spots in the recovery, and if we are going to meet the President’s goal of creating one million new manufacturing jobs by 2017, we’ll need an aggressive set of policy measures to make that happen.”

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