The Hill News

At his town hall meeting last week, the most painful question put to President Obama was also one of the simplest: “Is the American Dream dead?”

Indeed, far too many Americans are worried that their children will inherit a diminished chance at success â€" that it is getting harder and harder to make it in America. And at a time when millions of Americans are out of work, it can be easy to feel that way.

But I believe it’s also deeply mistaken to talk about the American Dream as a thing of the past. The ingenuity and innovation that built the world’s most powerful economy are still very much with us â€" our work is to adapt those qualities of character to a new century’s worth of challenges. And to me, that work begins with restoring America’s role as a nation that makes things. It begins with producing here in America the products that are invented in America.

Manufacturing is about good jobs, strong exports, and America innova! tion â€" but it is also a question of pride. America became a world power, in part, because so much of what made the world run was produced in American factories, by American workers. And along with that success came generations of solid jobs that gave America the largest, most well-off middle class in history.

Manufacturing, and the middle-class economy it creates, is a part of the American character that we must not give up. That’s why I believe that the state of manufacturing is so important, and that’s why it is so important to our middle class. That’s why our economic recovery won’t be complete until we can be assured that making things is a viable and vibrant part of America’s economic future. And that’s why the “Make It In America” agenda, which I’m going to discuss today, is so important.

To begin, we must not forget that many of the world’s highest-quality, most reliable products are still made in America. But the statistic! s are clear: manufacturing, until very recently, has been on a! course of decline. As Congress’s Joint Economic Committee pointed out in a report released just last month, manufacturing was hit severely in this Great Recession â€" but the decline in manufacturing predates our recession by decades.

Starting from its peak in 1979, the number of manufacturing employees has been cut nearly in half: from some 20 million to fewer than 12 million today, from 20 percent of our workforce to just 10 percent today. And the damage greatly accelerated under President Bush: from February 2001 to February 2009, nearly one-third of manufacturing jobs in America disappeared.

The loss of those jobs was a substantial contributor to the middle-class stagnation that characterized those years. From 2002 to 2008, even as the economy as a whole grew, the median household income fell by $2,000 â€" the first time that had ever happened during a period of economic expansion. And when we talk about a “lost decade for the middle class,” we are! talking, in part, about a lost decade for manufacturing employment.

That’s the bad news â€" news with which I’m sure many of you are intimately familiar. But in the midst of pessimism about our manufacturing future, I believe that we are making real progress. Most notably, coming out of the depths of recession, America added 136,000 manufacturing jobs during the first seven months of this year. Seven straight months of growth â€" the most sustained growth in manufacturing employment in 13 years!

And though that string of adding jobs was broken in August, the economic activity of the manufacturing sector â€" as measured by production, exports, and inventories â€" has expanded for 13 straight months. The credit for that success belongs to the innovation and tenacity of the private sector. But in Washington, it’s our job to understand the policies that helped make that success possible, and to build on them. It will be important, as well, to look ! at policies that may impede such growth.

Investmen! ts in cl ean energy, roads, bridges, transportation networks, and other infrastructure have helped save or create three million jobs; many of those jobs have been in manufacturing, such as the hundreds of jobs created by the Advanced Energy Manufacturing Tax Credit â€" jobs at places like Cree, Inc. in Durham, North Carolina, a leading producer of advanced LED lighting. I’d also point to the administration’s clean energy investments in areas such as making homes more energy-efficient â€" and to our success in laying the groundwork for a stronger, more competitive American auto industry.

Half a year of progress may be reassuring â€" but with millions still out of work, and American manufacturing still far from the prominence it once enjoyed, we are only at the beginning of our manufacturing recovery. We have a long way to go â€" but I want to let you know that the Democratic Party is dedicated to getting us there. The administration is putting manufacturing up-front, wi! th a plan to double U.S. exports in five years â€" because it believes, as I do, that American companies and workers can compete and win in free and open world markets.

We Democrats have dedicated ourselves to passing and enacting a “Make It In America” agenda â€" a plan to continue the renaissance of American manufacturing and restore its role as a central part of our middle-class economy.

"Make It In America” means investing in manufacturing innovation and infrastructure, making the American workforce the best-trained one in the world, and creating an environment in which American manufacturers can create jobs here and still compete globally.

President Obama has already signed four “Make It In America” bills into law: they include a bill to make it cheaper for American companies to obtain the materials they need to manufacture goods, a bill to speed innovation by breaking the backlog of patents waiting for approval, and a bill to! reduce tax loopholes that encourage companies to ship jobs ov! erseas. The most recent “Make It In America” bill, which establishes a Small Business Lending Fund, provides an additional $12 billion in small business tax cuts, and promotes the export of U.S.-made goods, was signed into law yesterday. It is projected to save or create hundreds of thousands of jobs.

Seven more “Make It In America” bills have passed the House and are waiting for Senate action. These bills help clean energy firms compete at home and abroad; combat the trade imbalance that harms American job creation; help rural families upgrade their energy efficiency; build training partnerships between unions, businesses, and educators; ensure that Congress and the Department of Homeland Security buy American-made goods whenever possible; and direct the president to work with business and state leaders to develop a national manufacturing strategy, just like our toughest international competitors have in place.

In addition, this week the House will vot! e on three additional bills. One will make sure that the government buys American-made American flags. Another helps ensure that American workers are given every opportunity to earn certifications, degrees, and qualifications for the jobs American industry needs to fill. And the third addresses China’s unfair currency policy and its harms to American workers. By deliberately keeping the value of its currency low, China is able to sell its goods in the United States at an artificially low price â€" which helps put American manufacturers out of business. The bill we vote on this week will help level the playing field for American businesses and workers.

We passed these “Make It In America” bills because we refuse to write off the notion of America as a country that makes things, and because bills like these create the kind of jobs we want: the steady, secure, well-paying kind. I don’t think it will come as a surprise that, while average total compensation, ! including wages and benefits, is about $58,000 across all jobs! , manufa cturing workers receive an average of nearly $71,000. That’s a reason why strengthening manufacturing is a policy that both labor and business can supportâ€"because when we “Make It In America”, more of us will be able to make it in America. In fact, I’m proud that input on this agenda has come from all over the country: from the National Association of Manufacturers, from the Chamber of Commerce, and from labor unions. At a time when America cries out for unity of purpose, this agenda offers it.

The jobs that will come out of these bills won’t just mean opportunity for middle-class families â€" they will mean opportunity for our entire economy to innovate and grow. Though some would urge otherwise, we can’t afford to write off manufacturing â€" because our ability to remain the world’s innovation leader and create tomorrow’s jobs depends directly on our ability to make things here today.

Take the example of Amazon’s Kindle e-reader: a! s Harvard business professor Wally Shih has observed, the Kindle may have been designed in California â€" but of the approximately $185 in manufacturing costs that go into every unit, only $40 to $50 of that value, only about 25 percent, is added in America. Why should that worry us? Because, as Shih writes, missing out on manufacturing the Kindle’s advanced screen means that “the U.S. will miss out on the future industries that spring from it â€" things like large flexible displays, future generations of electronic signage, and plastic electronics. Those technologies could, in turn, spawn other innovations and new industries… This same story has played out in high-tech industry after high-tech industry.”

Those industries include everything from computer chips to precision optics to photovoltaic cells. Another example is the production of the advanced batteries that will soon power electric vehicles. Here’s how Intel’s Andy Grove explained it in an ar! ticle this summer called “How to Make an American Job Before! It’s Too Late” â€" which I hope you’ll read if you haven’t had the chance. As Andy Grove puts it, “the U.S. lost its lead in batteries 30 years ago when it stopped making consumer-electronics devices. Whoever made batteries then gained the exposure and relationships needed to learn to supply batteries for the more demanding laptop PC market, and after that, for the even more demanding automobile market. U.S. companies didn’t participate in the first phase and consequently weren’t in the running for all that followed. I doubt they will ever catch up.”

I think that Grove’s identification of the problem is dead-on: “a general undervaluing of manufacturing.” As a result, “not only did we lose an untold number of jobs, we broke the chain of experience that is so important in technological evolution.” And in the process, we contributed to America’s rapid growth in inequality.

Simply put: innovation follows manufacturing. When manufacturin! g migrates overseas, innovation eventually follows it. So our ability to create sustainable, middle-class jobs for our children â€" and a more level playing field for all Americans â€" is directly tied to the strength of our manufacturing today.

Read more...