Protect the U.S. Manufacturing Base

July 30, 2003

"U.S. manufacturing is the heart of a significant process that generates economic growth and has produced the highest living standards in history. But today this complex process faces serious domestic and international challenges, which, if not overcome, will lead to reduced economic growth and, ultimately, a decline in living standards for future generations of Americans."

So concludes a new study commissioned by the Council of Manufacturing Associations and performed by economist Joel Popkin of Joel Popkin and Co. The study, Securing America's Future: The Case for a Strong Manufacturing Base, contends that manufacturing is "the heart of an innovative process that powers the U.S. economy to global leadership" and makes possible America's wealth and top economic rank.

However, states the study, "America's leadership is being squeezed [by] unprecedented foreign competition based upon predatory trade practices that make it impossible to raise prices." In addition, rising healthcare costs, "runaway" litigation and excessive regulation are taking their toll on the manufacturing sector. As a result, U.S. manufacturers have been forced to cut back on research and development (R&D) and capital investment and to trim their workforces.

The natural gas crisis alone is reason enough for widespread panic among manufacturers. According to a new Global Insight report commissioned by the American Chemistry Council (ACC), America will lose 100,000 jobs if natural gas prices do not take a nose-dive soon.

In testimony this June before the House Subcommittee on Energy and Mineral Resources, an ACC witness said: "American consumers will pay $70 billion more for natural gas in 2003 than they did in 2002." That price tag, said ACC, is a direct result of federal policies that promote natural gas demand, but restrict its supply.

As active participants in the U.S. chemical manufacturing sector ," a sector that has, of late, suffered particularly brutal blows to its economic foundation ," you should be very afraid. If the U.S. manufacturing base continues to shrink at its current rate, says the study, "the manufacturing innovation process will shift to other global centers." And if that scenario should become a reality, "a decline is U.S. living standards in the future is virtually assured."

A plan for action

Earlier this year, the National Association of Manufacturers (NAM) released a strategy for growth and manufacturing renewal. Among the strategy's priorities were:

A tax policy that enhances economic growth and promotes productivity.

Cost-cutting reforms that would improve legal, regulatory, health care and retirement systems while tempering growth and job threats associated with existing systems.

A national energy policy that would ensure sustainable economic growth.

Asbestos litigation and legal system reforms.

A technology policy that would preserve and enhance the United States' leading role in R&D and innovation.

Programs to provide workers with the skills needed to meet the demands of modern manufacturing.

NAM called on President Bush to appoint an interdepartmental and interdisciplinary Blue Ribbon Commission to analyze current manufacturing threats and "to propose a strategy and plan of action for the federal government to complement private-sector actions to effectively sustain U.S. leadership at the top of global competitiveness."

You count

Industry associations are taking the current manufacturing crisis very seriously, and have been extraordinarily vocal in their attempts to influence policy. But their efforts might not be enough.

You, too, must play an important role in effecting the changes that will preserve and enhance not only our country's leadership status in the manufacturing sector, but also your job.

Educate yourself on health-care and retirement costs and potential cost-cutting reforms. Make your voice heard. If you stay silent, you stand to lose more than small change from your paycheck as these costs continue to skyrocket.

Stay abreast of energy and tax policies ," and let Congress know what you think.

Fight for increased R&D funding on the part of government. After all, the government itself stands to benefit from the dollars gained through resulting innovations.

If hundreds ," or thousands ," of individuals stepped up to truly speak their minds, then the manufacturing sector just might find itself on the road to a much brighter future.

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