Op-Ed: Strengthen Manufacturing, Strengthen Our Union

By January 11, 2016Shopfloor Main

On Tuesday night, President Obama will lay out his agenda for his last year in office. To unleash greater economic growth, to lift wages and to create more jobs in America will undoubtedly be among his goals. But if we want to achieve those goals, our focus should be on strengthening manufacturing in the United States.

Why manufacturing? Because the strength of manufacturing in America is directly responsible for the success of America in the world. When manufacturing succeeds, America succeeds.

More than 12 million people across the country work in this industry, which contributes more than $2 trillion to national GDP annually. If manufacturing in the United States represented a country, it would be the ninth-largest economy in the world.

 When we create one manufacturing job, we spur the creation of three to five more in other industries. Spend a dollar on manufacturing, and $1.40 is added to the national economy. An entry-level manufacturing engineer can expect to earn roughly $60,000, while the average manufacturing worker earns more than $79,000 annually. That works out to about $15,000 more than the average worker across all sectors. Such job opportunities should be plentiful: Over the next decade, we will need to fill 3.4 million manufacturing jobs. And, we need to equip the workforce with the skills and education that these well-paying manufacturing jobs demand.

So what steps should we take to strengthen manufacturing? As part of our 2016 State of Manufacturing Tour, the National Association of Manufacturers (NAM) will take our message to cities and towns, colleges and shop floors across the country. Our discussion will center on what our elected officials can do on key issues to help us compete to win for America.

Start with taxes, for example. We have to fix our arcane, complicated tax code. Today, companies in America pay a higher tax rate than their competitors in other developed, major economies. The corporate rate should come down to 25 percent or even lower. And we have to move from a worldwide international tax system to a modern territorial system so U.S. companies can compete on a level playing field.

We also need to implement a competitive trade agenda because 95 percent of our potential customers are outside our borders. Undoing longstanding foreign trade barriers will open markets abroad, and enforcing international trade commitments and rules to ensure fair play will sustain and create jobs at home.

On the energy front, we now have access to a wide array of domestic energy sources that many believed would not be possible in our lifetimes. But Washington’s policies are still holding us back. The Obama administration and Congress should support an “all-of-the-above” energy strategy—instead of picking and choosing energy sources.

We can agree that having the best and most productive workplaces in the world is essential to our economic leadership. Unfortunately, labor laws and workplace regulations do not reflect the changing dynamics of modern manufacturing. Congress should ensure our laws promote 21st-century workplace ideas, such as compensatory time off and other flexible work arrangements.

Congress’ inaction on comprehensive immigration reform is especially disappointing. However, vitriol directed toward immigrants is even worse. It’s time to end the appalling rhetoric—and time to address all parts of the broken system. If we do, we will boost our economy. Talent nurtured in our universities will be put to work here in America. And above all, we will have fulfilled a moral obligation rooted in long-held American ideals.

On health care, we need to find ways to address realistically the challenges ahead. While onerous health care taxes have been put on hold temporarily, we still need to keep focus on solutions and long-term improvements, including, among other things, raising federally determined contribution limits for health savings accounts to further incentivize saving for health-related expenses.

And we have to address the fact that our legal and regulatory systems are broken. In fact, our legal system is more than twice as expensive as many of our major competitor nations. A 2014 report commissioned by the NAM found that the total cost of federal regulation in 2012 was more than $2 trillion. Curbing frivolous lawsuits and modernizing regulatory processes would save money that could be passed on to customers and employees—or spent on innovation.

There is more to do but these policies will help grow the middle class, give everyone an equal chance to live their American dream and secure American exceptionalism long into the future.

If you listen to the candidates who are out campaigning to be the next person to deliver a State of the Union address, they all support manufacturing with their words. However, words alone don’t build the right business environment or develop a skilled workforce.

It’s one thing to say you support manufacturing. It’s another to pair that verbal praise with the right policy agenda. Lawmakers and our current president—and our future president—just need to get to work.

Gregg Sherrill is chairman and CEO of Tenneco, which manufactures clean air and ride performance components and systems. He is chairman of the board of the National Association of Manufacturers.

This opinion piece originally appeared in Real Clear Politics, January 11, 2016.

Gregg Sherrill

Gregg Sherrill

Gregg Sherrill is chairman and CEO of Tenneco Inc., an $8 billion manufacturer of clean air and ride performance components and systems. With approximately 26,000 employees worldwide and more than 90 facilities in 23 countries, the company serves all major vehicle manufacturers and replacement market customers around the world.
Gregg Sherrill

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