Trump overlooks many solutions to US manufacturing issues

Donald Trump rose to power in part by pledging to rewrite unpopular trade deals that have shipped jobs overseas and hurt American workers, particularly in the Midwest, for years.

As president, he has continued to focus on renegotiating the North American Free Trade Agreement (NAFTA) and imposing new tariffs on foreign goods, taking credit for the recent growth in manufacturing jobs nationwide.

But the truth is that the nascent economic recovery in the heartland is in spite of Trump’s policies, not because of them. By framing trade deals as the principal source of America’s industrial decline — and thus the key ingredient for its renewal — Trump has diverted attention away from the other disastrous policies.

As he has railed against the Trans-Pacific Partnership (TPP), he quietly proposed to cut critical federal programs supporting small businesses and waffled on his commitment to "Buy America" rules.

The High Wage America stop in Chicago, June 2018

He boasts of record unemployment, while doing nothing to boost workers’ stagnant wages and taking aim at unions that are critical to the middle class.

There’s a better way to help struggling communities in the Midwest, one that goes beyond trade issues and is markedly different from Trump’s approach. Elected leaders in our nation’s capital should advance a forward-looking, bold policy agenda to revitalize manufacturing and raise wages for workers.

Over the past year, my colleagues and I at The Century Foundation, traveled throughout the heartland, meeting with hundreds of local policymakers and labor and business leaders who are fueling the region’s turnaround.

We saw firsthand how states weathered the storm in the decade following the Great Recession, which saw nearly two million manufacturing jobs lost, as well as how the Midwest is recovering a greater share of industrial losses than the rest of the country today.

Along the tour, trade policy was occasionally discussed, but it was rarely the priority issue for local communities. Time and again, in both our conversations with stakeholders and when analyzing economic data, different types of barriers emerged that are holding back a more robust, inclusive manufacturing recovery.

For one, companies and lawmakers are not doing enough to prepare and recruit workers into manufacturing. Employers want to come back so much so that their growth is outstripping their ability to find labor. In the Chicago region, our research found that there were two manufacturing job openings for every one person hired.

The educational and training systems that built our industrial workforce in the past, such as vocational schools and apprenticeships, have been allowed to wither.

The absence of these pipelines is how a city like Chicago can have thousands of unfilled jobs, many of which only require a high school degree, alongside youth unemployment nearing 37 and 20 percent for black and Latino men, respectively.

Second, American manufacturing is increasingly high tech, but the federal government is not doing enough to fund innovation or coordinate disparate regional strategies. In recent decades, the U.S. has ceded its edge in research and development to East Asian countries, making us less competitive globally and contributing to our large trade deficit.

As our country has disinvested in the heartland, nations like Germany — where manufacturing represents almost 21 percent of GDP, compared to just 11.6 percent here — have steadily increased their investment in modern industries.

Policymakers should do much more to invest in advanced manufacturing here at home and support the growth of factories like the ArcelorMittal steel mill in Cleveland, the world’s first plant where one hour of human labor can create one ton of steel.

Private-public partnerships that seek to bolster manufacturing clusters, such as the Manufacturing Extension Partnership and Manufacturing USA, are promising programs that should be expanded, not eliminated or scaled back, as Trump’s budgets have proposed.

Moreover, leaders in the heartland rightly note that the lack of capital investment in the region is stinting economic growth. Industrial states represent 32 percent of all domestic employment, but account for only nine percent of venture capital investment, underscoring the need to unlock new sources of capital directed at manufacturing initiatives.

There is no shortage of responsible, proven ideas to grow high-paying manufacturing jobs. As we outline in a new report, there are a myriad of policies — from new grants for career-based learning and apprenticeships, to programs that would mitigate the impacts of job loss due to automation, to the creation of a national industrial bank — that would respond to the biggest obstacles facing communities in the heartland.

Some argue that manufacturing is a lost cause, that those jobs are never coming back so why bother trying. But communities in the heartland know better.

Voters are eager for leaders willing to take meaningful steps to build a high-wage manufacturing sector, not simply pose for photos on factory floors. Lawmakers in Washington, D.C. should answer their call.

Andrew Stettner is a senior fellow at the Bernard L. Schwartz Rediscovering Government Initiative, part of The Century Foundation, and author of the new report, “A Federal Agenda for Revitalizing America’s Manufacturing Communities.”

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