Duesterberg: “At a minimum, this forecasting exercise ought to lend some hope that we can indeed look ahead to a manufacturing resurgence and the sustainable economic gains that it brings, if we choose to follow this path.”
Actions to Control Costs, Improve Labor Force
The Aspen Institute and MAPI also recommend a wide variety of other actions designed to bolster the manufacturing sector in the next decade, including:
Energy: The report calls for a “do no harm” approach to energy policy that allows the U.S. to capitalize on the boom in domestic oil and natural gas production. It urges faster approval of drilling permits on federal lands, investments in the smart grid to help the wind and solar industries, and support of energy conservation efforts.
Labor Force: At the press conference, Ron Bullock, chairman of the Bison Gear Corp. and chairman of the Manufacturing Institute, noted that the nation will need to replace 4 million baby boomers retiring from manufacturing over the next 10 to 15 years plus the 3.7 million workers that would be added to manufacturing payrolls under the resurgence scenario. The report calls for education and training efforts including adding more apprenticeships and vocational programs, developing skills certification programs such as the NAM-endorsed Skills Certification System and reforming immigration policies to facilitate permanent visas and citizenship for skilled workers, especially scientists and engineers with degrees from U.S. colleges.
Regulations: The report notes that “regulatory forbearance is fraught with controversy,” but advocates efforts to slow the pace of new regulations while looking for ways to reduce overlapping and duplicative regulations. It said trade agreements negotiations offered one avenue for producing harmonized testing and standards so that manufacturers only have to produce one version of a product.
Taxes: The report calls for a corporate tax rate in line with the OECD average of about 25%. Lowering the U.S. rate would “help to liberate capital locked away in foreign locations, eliminate the incentive to reincorporate in low-tax havens, and reduce wasteful expenditures on tax arbitrage schemes.” It recommends making the research & experimentation tax credit permanent and cautions policymakers to consider the impact of tax changes on small and medium firms which are pass-through entities and have already been affected by the increase in personal tax rates.
The economic model and expert advice used for the projections were provided by the University of Maryland’s Interindustry Forecasting Project (Inforum). Inforum was commissioned to make projections based on a target of moving manufacturing’s share of GDP back to the level last seen in 1998 (approximately 15%), before the “dot-com” recession and the “Great Recession.”
“At a minimum, this forecasting exercise ought to lend some hope that we can indeed look ahead to a manufacturing resurgence and the sustainable economic gains that it brings, if we choose to follow this path,” Duesterberg concluded.
