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Economist Jerry J. Jasinowski served as President of the National Association of Manufacturers for 14 years, and later as President of the Manufacturing Institute. Widely recognized as an expert on manufacturing and other economic issues, Jerry is a popular speaker and frequent guest on TV programs such as CNBC, Bloomberg and Fox Business.

 

Jasinowski regularly blogs and shares his insights on the economy. This week he discusses how the Presidential candidates approach manufacturing.

 

Bringing Manufacturing Jobs Back To the U.S.  – By Jerry Jasinowski

For as long as I can remember, economic growth and jobs has been a major theme of both major political parties. They disagreed on the best way to achieve it, but both made it a top priority. “It’s the economy, stupid,” was the Clinton Administration’s war cry when it won two terms in the White House.

The ingredients of economic growth and employment are no great mystery. We must first find ways to increase aggregate demand and stimulate productivity which means more capital investment, more spending on research and development, upgrading our infrastructure, incentives to reward entrepreneurship and – most important – investing in people. Far too many of our workers have been marginalized by technology. There are many ways to use technology to increase growth and create advanced worker jobs.

 

Our primary focus should be on manufacturing. The widespread assumption that unfair competition has denuded the U.S. manufacturing sector is wrong. The U.S. is still the second largest manufacturer in the world. Since the recession, manufacturing employment is up 900,000 and overall output is up 20 percent. True, we have lost some five million manufacturing jobs since 2000, but they were mostly low skill jobs that yielded to advancing technology. We still have more than 12 million manufacturing jobs and today as always they are the engine of our economy. A recent study by MAPI demonstrates that every new manufacturing job supports 3.6 jobs in other sectors that would otherwise not exist – or 32 percent of all employment.
 

Secretary Clinton offers numerous viable growth and employment ideas, including addressing the serious income gap challenge. Sensibly she would increase the minimum wage to a living wage and she also advocates profit sharing by business, and that also not only benefits workers but increases productivity.

Clinton is also an advocate of vocational training. Not everyone should pursue a four-year academic degree. Millions of our brightest young people are drawn to practical careers in industry or the trades. And Clinton grasps the vital importance of a modern infrastructure to a healthy economy. Clogged highways and airports, overburdened railways and obsolete river locks are holding us back. She also understands the role of technology in improving the supply chain and modernizing our infrastructure. She sees the infrastructure as a technology and investment initiative that can be financed at today’s low interest rates.

Clinton also is a strong advocate for re-shoring, a favorable trend that is driving a resurgence of U.S. manufacturing within our borders. Success stories are not hard to find. For example:

The U.S. now makes the lowest cost high efficiency solar panels available on the market, a growth industry that was once assumed to reside permanently in China.

When General Electric decided to reshore water heaters, it was able to produce a higher quality model for a retail price 20 percent lower than the Chinese model it replaced, creating 1300 jobs and leading to reshoring of refrigerators and washing machines too.

 

Walmart now has at least 46 companies participating in its Made in USA initiative, making quality goods at better prices than those it replaces.

 

In contrast, Donald Trump’s policies would actually erode business confidence and dampen economic growth. He says he would invent millions of new jobs, but does not say how. He did say he would actively pursue a variety of guaranteed job killing initiatives such as shutting down trade, dropping out of the World Trade Organization (WTO), and tearing up the North American Free Trade Agreement (NAFTA).
 

Secretary Clinton would like to do more to highlight and encourage the reshoring of jobs to our country. Please send me any success stories of how other manufacturers have achieved reshoring; and also send me suggestions for additional public policies that you believe will encourage growth, boost manufacturing and jumpstart reshoring even more – to be shared with Secretary Clinton.

Clinton needs to go further in terms of cutting taxes, reducing regulatory burdens and encouraging innovation. I suggest she craft a Checklist for Economic Growth from the ideas she has already embraced and share it with the country as she travels the campaign trail, soliciting input from academics, business leaders and workers on how we can best raise growth from 2 % to 4%.

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