Can We Create More Manufacturing Jobs?
Our readers can attest that as the financial crisis has been heating up, ManufactureThis has been disappointed that almost none of the discussion about what should be done to fix the problem has mentioned what ManufactureThis feels is an absolutely critical component in any long-term recovery, the need for the American economy to be rebuilt in a way that is based on manufacturing actual products, not just exotic financial instruments.
With that as background, ManufactureThis was pleased yesterday to see that one of the presidential candidates, Sen. Barack Obama, gave a major economic address in Toledo, OH and released what the campaign calls "Barack Obama and Joe Biden's Rescue Plan for the Middle Class."
In his speech, Sen. Obama pointed out the effect the economic climate (even apart from the current crisis) has had on jobs and manufacturing.
The credit crisis has left businesses large and small unable to get loans, which means they can’t buy new equipment, or hire new workers, or even make payroll for the workers they have. You’ve got auto plants right here in Ohio that have been around for decades closing their doors and laying off workers who’ve never known another job in their entire life.
760,000 workers have lost their jobs this year. Unemployment here in Ohio is up 85% over the last eight years, which is the highest it’s been in sixteen years. You’ve lost one of every four manufacturing jobs, the typical Ohio family has seen their income fall $2,500, and it’s getting harder and harder to make the mortgage, or fill up your gas tank, or even keep the electricity on at the end of the month. At this rate, the question isn’t just “are you better off than you were four years ago?”, it’s “are you better off than you were four weeks ago?”
Later in the speech, Obama reiterated the issue that we are glad to see someone finally paying attention to, when he said that his plan "begins with one word that's on everyone's mind, and it's spelled
Still, as nice as it is to hear Sen. Obama address this issue, it's also important to see what exactly he is proposing. To that end, we turn to the Rescue Plan the campaign released. In particular, two of the proposals stand out:
A New American Jobs Tax Credit. Obama will provide a new temporary tax credi to companies that add jobs here in the United States. During 2009 and 2010, existing businesses will receive a $3,000 refundable tax credit for each additional full-time employee hired. For example, if a company that currently has 10 U.S. employees increases its domestic full time employment to 20 employees, this company would get a $30,000 tax credit--enough to offset the entire added payroll tax costs to the company for the first $50,000 of income for the new employees. The tax credit will benefit all companies creating net new jobs, even those struggling to make a profit.
ManufactureThis applauds this commonsense solution to a simple problem. If the problem is that companies are finding it too expensive to create American jobs instead of offshoring production, what government can and shold do is to create incentives that make it a sound economic decision to create good jobs here at home. While this may not be a silver bullet, this is the sort of clear, reasonable policy that will, if enacted, lead to the creation of more manufacturing jobs.
Partner with America's automakers to help save jobs and ensure that the next generation of clean vehicles is built here in the United States. Senator Obama pushed for $50 billion in loan guarantees to help the auto industry retool, develop new battery technologies and produce the next generation of fuel efficient cars here in America. Congress passed only half of this amount – it is critical that the administration speeds up the implementation of the first half and that Congress move quickly to increase certainty by enacting the second half. In addition, Obama believes that with the tremendous uncertainty facing the auto industry, and the small and medium business suppliers who depend on them, it is critical that we keep all options on the table for helping them weather the financial crisis.
ManufactureThis is pleased to see that the plan mentions battery technology specifically, because it is of major concern that ending our addiction to foreign oil, while a laudable goal for many reasons, will not help the American economy if we replace it with an addiction to foreign-made batteries. Right now, Japanese and Chinese companies are cornering the market on such items as lithium-ion batteries for hybrid cars, and we need to catch up. The Advanced Technology Vehicle program Obama describes here, which was recently – finally – funded in the Continuing Resolution is a positive step toward empowering American companies to reinvest in new technologies and ensure that the components of the oft-discussed green economy, like flex fuel vehicles and like hybrid batteries, are made here in America.
Overall, there is a lot to like about the Obama plan, but, as always, there are many potential pitfalls between page and practice. It’s important that Obama and everyone else keep their eye on the ball, because while programs to create jobs are desperately needed, it is also critical that the jobs created be good, well-paid jobs in sustainable sectors like manufacturing.
(Editor’s Note: ManufactureThis is a nonpartisan blog, and as such we will also gladly discuss any proposals the McCain campaign will make about jobs. Over the past couple of days, first Lindsey Graham said the campaign would be issuing new policy proposals, then Tucker Bounds said they weren’t, and then this morning Douglas Holtz-Eakin said they would. 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