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Manufacturing Continues to Be a Pathway to the Middle Class

A recent analysis by the National Employment Law Project asserts that manufacturing wages are declining, and employees in the sector are falling behind their peers in other industries. The reality is that manufacturing continues to be a pathway to the Middle Class for millions of Americans, with compensation that is rising, not falling, in recent years.

According to data from the BLS, average weekly earnings for manufacturing employees have increased from $847.60 in January 2007 to $1,018.37 in October 2014, a gain of 20.1 percent. Over the past two years, average weekly earnings have grown 5.1 percent, or roughly twice the rate of consumer prices (which were up 2.6 percent over that time frame). On an hourly basis, the average manufacturing worker earned just shy of $25 per hour in October, up from $21.19 in January 2007 or $23.92 two years ago.

Moreover, total compensation (which includes benefits, as well as wages and salaries) in manufacturing has risen from $32.20 per hour worked in the first quarter of 2010 to $35.74 in the second quarter of 2014. On a year-over-year basis, total compensation has grown 5.6 percent. In annual terms, the average manufacturing worker earned $77,506 in 2013, or almost $15,000 more than the overall average for all industries.

Overall, manufacturing workers continue to receive excellent compensation, which has risen steadily in recent years.

Chad Moutray is the Chief Economist for the National Association of Manufacturers.

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Lame Duck Congress Must Revive R&D Credit, Jobs Depend on It

Congress still has the opportunity this year to take a major step in boosting the economy and jobs by reinstating and making permanent some of the expired tax provisions – including the R&D tax credit, which is critical to domestic manufacturing jobs.

The R&D tax credit is a true jobs credit—70 percent of the credit’s dollars go to paying salaries of high skilled R&D workers. Since the credit applies only to domestic workers, it is an incentive for research and new product innovation in the United States. Not only that, but as a Nov. 17 R&D Credit Coalition letter to Congress points out, if Congress enhanced the R&D credit and made it permanent, research-related employment would be increased by 300,000 jobs.

Need more proof of the credit’s effectiveness? Take a look at Ball Corporation, a manufacturing company founded in 1880 that employs over 14,500 people worldwide. The R&D tax credit has helped Ball Corporation make investments of roughly $125 million in new manufacturing capabilities that have directly led to the creation of more than 120 high-paying manufacturing jobs in Colorado and Indiana.

Ball Corporation invested in R&D to develop the new Alumi-Tek bottle, an aluminum vessel that allows consumers to re-close their beverage. The research and development done in Broomfield, Colorado resulted in an Alumi-Tek production line in Ball’s plant in Monticello, Indiana, and now the line and the jobs created from this innovative product have spread to Golden, Colorado. Just this one example of an R&D investment enabled by the R&D tax credit has led to the creation of more than 120 long-term high-paying manufacturing jobs in multiple local communities.

If Ball was able to create hundreds of jobs because of the R&D tax credit, just imagine the exponential increase in research and resulting jobs that Ball and other manufacturers could undertake if the credit was strengthened and made permanent. Plus, we would gain the added benefit of having these new cutting-edge products being developed here in the USA.

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Monday Economic Report – November 24, 2014

Here is the summary for this week’s Monday Economic Report:

Central banks around the world have acted recently in an attempt to lift a sagging global economy. On Friday, for instance, the European Central Bank (ECB) announced that it has begun purchasing asset-backed securities, finally beginning a quantitative easing program that some have long sought. Earlier in the day, ECB President Mario Draghi said that “we will do what we must” to spur economic growth. In addition, the People’s Bank of China surprised markets by cutting interest rates on Friday. These actions followed the Bank of Japan’s announcement on October 31 that it would increase the amount of its monthly asset purchases. (continue reading…)

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Kansas City Fed Reported Increased Manufacturing Activity in November

The Federal Reserve Bank of Kansas City said that manufacturing activity picked up somewhat in its district in November. The composite index rose from 4 in October to 7 in November, its highest level in four months. Along those lines, the pace of production (up from 3 to 9), shipments (up from zero to 7) and employment (up from 6 to 9) improved for the month. In addition, export sales (up from -9 to 8) were positive for the first time since April. Yet, growth remains far from robust, with new orders (down from 2 to 1) decelerating for the fourth consecutive month and just barely above neutral. (continue reading…)

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NAM Partners with Global Business Dialogue to Promote Environmental Goods Agreement

This morning the NAM and the Global Business Dialogue hosted a discussion about the Environmental Goods Agreement (EGA) negotiations underway at the World Trade Organization (WTO). NAM’s Linda Dempsey, Vice President for International Economic Affairs, spoke about the benefits to manufacturing of a broad EGA, mentioning that, “increased trade and global engagement is vital for our manufacturers. With only a 9 percent share of the global $11 trillion market in manufactured goods trade outside our borders, manufacturers can and should be able to expand commercial opportunities.

(continue reading…)

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Manufacturers support H.R. 4795, the Promoting New Manufacturing Act

The Environmental Protection Agency (EPA) is just weeks away from proposing a new ozone standard that the NAM estimates could impose over $2 trillion in compliance costs for manufacturers. With so much at stake, manufacturers need improvements to the air permitting process so that when these new standards take hold we can still get our permits and operate our facilities. We support H.R. 4795, the Promoting New Manufacturing Act, which is on the House floor this morning.  (continue reading…)

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NAM Hosts Shopfloor Briefing on Investment Week

On Friday, November 14th, the NAM wrapped up “Investment Week” with a Shopfloor Hill briefing held in the Rayburn House Office Building which focused on the importance of the investment tax incentives that are currently part of the “tax extenders” debate. (continue reading…)

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NAM Hosts Shopfloor Briefing on Investment Week

On Friday, November 14th, the NAM wrapped up “Investment Week” with a Shopfloor Hill briefing held in the Rayburn House Office Building which focused on the importance of the investment tax incentives that are currently part of the “tax extenders” debate. (continue reading…)

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Monday Economic Report – November 17, 2014

Here is the summary for this week’s Monday Economic Report: 

Manufacturers produced $2.085 trillion in value-added in the second quarter, according to new data from the Bureau of Economic Analysis. That figure is continued evidence that the manufacturing sector has a significant impact on economic activity, accounting for 12 percent of GDP. Moreover, the sector added 0.81 percentage points to second-quarter real GDP growth, which rebounded by 4.6 percent after weakness in the first quarter. This suggests that manufacturers had an outsized impact on economic growth in the second quarter, with only the professional and business services sector having a larger contribution to real GDP. (continue reading…)

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Global Manufacturing Economic Update – November 14, 2015

Here is this month’s Global Manufacturing Economic Update:

The global economy has seen its share of challenges this year. These include deflationary worries in Europe, decelerating growth in China and declining activity in South America, among others. Along those lines, the Bank of Japan announced on October 31 that it would increase the amount of its monthly asset purchases, stepping up its quantitative easing program in an effort to spur faster growth. As we noted in last month’s report, the United States fares pretty well in comparison. The International Monetary Fund slightly downgraded its global outlook, with world output now estimated to expand by 3.3 percent and 3.8 percent in 2014 and 2015, respectively. Yet, it raised its estimates for real GDP growth in the United States in 2014 from 1.7 percent to 2.2 percent. (continue reading…)

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