Manufacturing Alliance Official Scott Paul: Obama Factory-Jobs Plan Has Failed

Wednesday, 10 Jul 2013 10:30 AM

By Michael Kling

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President Barack Obama set a goal of creating 1 million manufacturing jobs during his second term. So far, we've created just 13,000, says Scott Paul, Alliance for American Manufacturing (AAM) president, in an article for Huffington Post.

"The manufacturing numbers are dismal, at best."

The manufacturing sector gained 14,000 jobs in January and 23,000 jobs in February but lost anywhere from 4,000 to 7,000 jobs a month from March through June, he says, citing Bureau of Labor statistics.

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"It's not a promising trend."

The manufacturing group thought that the one million jobs goal was actually a modest considering the millions of manufacturing jobs lost in the U.S. in the past few years — 5.5 million from 2000 to 2009.

To reach Obama's goal of 1 million new manufacturing jobs by 2017, the United States must create an average of 24,000 manufacturing jobs per month, Paul notes. "That suddenly looks like a daunting task."

Neither the Obama administration nor Congress is doing much to encourage more manufacturing jobs, Paul charges. They may be doing more harm than good.

Congress is underinvesting in research, education, and infrastructure. The Obama administration is not holding our trade partners, especially China and Japan, accountable for currency manipulation and other market-distorting practices.

The AAM is advocating more infrastructure spending, workforce training, strong enforcement of trade laws, and preference for American workers in public works projects.

"At times, we wonder if anyone in Washington is even interested in creating jobs," Paul laments. "Sequesters, debt, and scandals capture the attention of the pundits. But, none of that is doing a thing to put America back to work."

Despite recent poor job numbers, more companies are bringing jobs back to the U.S. in what's known as reshoring, backshoring, onshoring, or insourcing, according to Alan Mayer, a managing director at Green Manning & Bunch, an investment bank.

Most companies underestimate the outsourcing costs by as much as 30 percent and dramatically underestimate risks to their supply chain, Mayer writes in an article for the Denver Business Journal.

American manufacturers risk poor quality and theft of intellectual property, he says. In addition, foreign labor costs are increasing, transportation costs are up, energy costs in the U.S. are down due to domestic oil production, and the U.S. dollar has depreciated against China's currency.

A recent poll of manufacturing executives, he says, indicated that 37 percent of U.S. companies with production plants in China have either brought that work back to America or are strongly considering doing so.

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