Baltimore Sun Editorial: A manufacturing agenda
Baltimore Sun
Editorial Board
Given that it's an election year, it's not surprising to hear candidates for office describe U.S. manufacturing as being in decline. Donald Trump isn't the first to pledge a turn-around or to make "America great again." The reality of U.S. manufacturing is, however, quite different: Job openings in the sector are at a 15-year high, and layoffs are down significantly. Manufacturing is, for lack of a better description, booming.
That's why Rep. Steny Hoyer's call for a bipartisan approach to encourage further growth in U.S. manufacturing is right on point. Mr. Hoyer made his comments this week at the ceremonial opening of The Foundery, the manufacturing incubator for innovation and entrepreneurship at Port Covington that is part of Under Armour's push to foster next generation opportunities in manufacturing and design in South Baltimore.
U.S. manufacturing certainly took a hit in the Great Recession — total jobs in the sector are still below 2006 levels — but there's something else going on as well. Manufacturing is undergoing fundamental change, responding to a global economy where a premium is placed on agility, knowledge and technical training. This isn't the single-purpose Bethlehem Steel economy of the World War II generation, stamping out steel ingots to be finished elsewhere, it's the Sparrow's Point of Tradepoint Atlantic with a shipping terminal, warehouse operations and manufacturers, as well as office and retail space.
Cheaper U.S. energy prices, improved labor productivity and export growth have been important factors in the trend. Meanwhile, rising costs of imported goods and services are likely to foster further demand for domestic manufacturing. Now is exactly the time for Congress to make an investment in future jobs — not by refusing trade deals like the Trans-Pacific Partnership but by preparing the workforce for 21st century job skills.
Mr. Hoyer, the House Democratic Whip, obviously sees political advantage in a message of job creation and opportunity. But that doesn't make it less authentic or important. That blue-collar Americans have seen wages stagnate and believe the economic recovery has failed them while the wealthy have prospered is well-documented, but the solution to that circumstance is not to stop fostering free trade, it's to improve competitiveness.
The Southern Maryland Democrat's push for a bipartisan "Make It in America" initiative has been years in the making with modest success. But surely there are areas where Republicans and Democrats can agree — beginning with the need to bridge the so-called "skills gap," the expected shortfall in U.S. workers to fill as many as 2 million manufacturing jobs in the next decade. Considering the average salary for those jobs is in the neighborhood of $80,000 per year, that's an opportunity the U.S. economy can't afford to miss.
Greater government investment in technical training programs to cultivate the next generation not only of scientists and engineers but entry-level shop workers in advanced manufacturing ought to be of the highest priority in Washington and in state capitals. Why not, for instance, invest far more in community colleges, as President Barack Obama proposed last year? Gov. Larry Hogan has shown interest in making Maryland more "business friendly," but more is required than what we've witnessed from Annapolis so far — a modest reductions in fees, streamlining government agencies or fostering a better customer service attitude among state employees. (In fairness, Mr. Hogan offered a manufacturing tax credit bill this year, but the legislature killed it.)
As the annual report card of manufacturing and logistics by Ball State University recently concluded, Maryland's manufacturing industry's overall "health" earned a "D" in 2015 just as it did in 2014 with a tax climate that has actually worsened, going from a C to C-minus. Initiatives like the Foundery and Under Armour's other efforts to find ways to make footwear and sports apparel within the United States point us in a better direction.
Instead of thinking big, the future of manufacturing may be in thinking small and smart and innovative. The opportunity to create high-paying jobs is certainly there. As a recent survey of 500 CEOs from around the world by the U.S. Council on Competitiveness and Deloitte concluded, U.S. manufacturing should be the most competitive in the world by 2020. What's needed? Greater public and private collaboration to cultivate the technology and training to make it happen.