Innovation Should not be a Scapegoat for Rising Health Care Costs

By | Around the States, Health Care, Innovation, intellectual property, Shopfloor Main, Shopfloor Policy | No Comments

Cutting-edge advancements in pharmaceutical medicine improves lives and reshapes the health care industry as we know it every day. Innovation fuels progress, and America’s biopharmaceutical manufacturers are leading the way toward developing solutions to the greatest health care challenges, as they always have. The results are clear: more new medicines are created in the United States than every other country in the world combined. Unfortunately, some states have pursued and continue to pursue legislation to address rising health care costs that would stifle innovation—neither improving care for patients nor reducing health care costs in the process.

Minnesota House File 1246 would threaten intellectual property rights by requiring manufacturers to disclose highly-sensitive proprietary information, creating unnecessarily burdensome requirements that are contrary to the free and competitive market that has allowed biopharmaceuticals to develop new life-saving treatments. Our country far outpaces others in the discovery of new cures because of our emphasis on innovation that is carried out through robust research and development and protected by vigorous intellectual property rights. Degrading those rights degrades the progress they make possible.

The legislation being considered in Minnesota will not lower prescription drug costs nor address the rising cost of health care. Manufacturers support solutions to address rising health care costs, but as the manufacturing sector accounts for more than three-quarters of all private sector R&D in the United States and receives more patents than any other industry, proposed solutions must not come at the cost of crippling the biopharmaceutical sector’s innovation.

 

Supremes Hear False Claims Act Challenge

By | Shopfloor Legal, Shopfloor Main | No Comments

This morning, the U.S. Supreme Court heard oral arguments in Cochise Consultancy v. United States. The case concerns the statute of limitations for a relator in a False Claims Act (FCA) qui tam lawsuit in which the United States has declined to intervene. Relators, also known as whistleblowers, may bring a lawsuit for alleged fraud against the government and potentially receive a share of any recovery as a reward. The FCA establishes two distinct statute-of-limitations periods: six years for relators’ claims and no more than 10 years for claims brought by a government official or with the knowledge of a government official.

After serving time in prison for being part of a fraudulent subcontracting scheme, the relator in this case alleged that Cochise violated the FCA. Cochise argued the statute of limitations barred the claim because it requires a violation to be brought within six years of the violation or three years “after the date when facts material to the right of action are known or reasonably should have been known by the official of the United States charged with responsibility to act in the circumstances, but in no event more than 10 years after the date on which the violation is committed.” The Supreme Court is addressing the issue of whether the “government knowledge” period of up to 10 years applies only when the government intervenes in the case or whether that period also applies to relators even when the government has chosen not to pursue the claim.

The National Association of Manufacturers (NAM) filed an amicus brief in the Supreme Court urging a limited time frame for private relators to bring FCA cases. The NAM’s brief argues that a relator in an FCA action is limited to the six-year statute of limitations. The shorter statute of limitations would reduce the number of very old claims that manufacturers would be forced to defend—at significant expense and with the disadvantage of faded memories and dated evidence.

Advance Regulatory Policies to Encourage a 21st Century Rail Network

By | Infrastructure, Innovation, Shopfloor Main, Shopfloor Policy, Technology, Transportation | No Comments

Since their inception, railroads have paved the way for American industrialization, safely transporting freight across the country with an efficiency and speed never before imagined possible. The American rail network has driven some of our most consequential economic developments, using that innovation to improve millions of lives. Now, groundbreaking advances in automation and analytics are opening yet another exciting frontier for rail—one that, with the right approach from D.C. policymakers, and the Federal Railroad Administration (FRA) in particular, can once again redefine the world of transportation.

To craft a technology-friendly regulatory strategy, FRA need simply look to its peer agencies in the automotive sector. The recent flurry of innovation in autonomous vehicle technology is progressing thanks in large part to the U.S. Department of Transportation’s (DOT) “light touch” regulatory approach toward testing and deploying these new technologies. Despite the fact that all real-world testing carries some initial risk, DOT has not allowed misconceptions to stand in the way of progress and the long-term safety benefits of autonomous vehicles. The same approach that is working there will work for rail as well.

While rare, one-third of train accidents are caused by human error, many of which will be eliminated by integrating automated processes into rail operations. Further, the deployment of autonomous technology is easier in the rail industry given that railroads operate on separate fixed tracks. In a world where DOT has vigorously supported the automation of millions of interacting cars and trucks, FRA’s support for similar—and simpler—opportunities to automate many different aspects of rail operations is an attractive and less controversial way to facilitate analogous rail-safety benefits.

Encouragingly, FRA made progress last April when it issued a request for information on automation in the rail industry. In response, Norfolk Southern provided substantive insights into the many technologies available to automate various aspects of our network—from locomotives and dispatch, to yard operations and inspections. We look forward to the next steps and urge FRA to promote the safety benefits of such technologies by issuing guidance that encourages railroads and third-party technology vendors to pursue innovation.

At Norfolk Southern, we are firmly committed to developing high-tech tools that will undeniably improve the safety and efficiency of our operations. Indeed, automated and predictive technologies can help open a new world of operational improvements, and we are working hard every day to realize these benefits and reimagine a safer, more reliable future for freight transportation. Yet we simply cannot unlock the full potential of this new technology without a 21st century regulatory environment that facilitates private innovation.

Just as it has throughout our country’s history, the rail industry is leveraging technology to surge towards transportation’s new technological horizon. By following the lead of other DOT agencies and regulating in a flexible, outcome-based manner, FRA can accelerate this technological progress, helping to dynamically transform the freight-rail industry and creating a safer system and a more efficient transportation network for 21st century manufacturers

NAM Supports Bill to Codify Workplace Equality for LGBTQ Employees

By | Shopfloor Main, Shopfloor Policy | No Comments

Today the Equality Act—bipartisan legislation that would, among other things, protect LGBTQ individuals from discrimination in the workplace—was introduced in the House and Senate. The National Association of Manufacturers has long opposed discrimination based on an employee’s sexual orientation or gender identity. Today we joined with more than 40 other industry associations—representing a truly stunning breadth of the American economy—in supporting the Equality Act.

Manufacturers have led the way in providing their employees with fair and meaningful protections against sexual orientation- and gender identity-based discrimination. The reason for this is simple: talented employees demand it, and employers understand the importance of creating an environment in which the very best people can succeed based on merit. At the same time, manufacturers know that discrimination in any form is antithetical to the values that we work to uphold every day: equality of opportunity, individual liberty, free enterprise, and competitiveness.

The bill’s basic approach of including protections based on sexual orientation and gender identity under the existing framework of the Civil Rights Act is sensible. By making these protections consistent with those for other protected classes, it takes advantage of decades of judicial precedent to provide as much clarity as possible to the businesses who must ultimately comply. The Civil Rights Act also provides long-established protections for religious organizations, and it limits its reach to employers with 15 or more employees.

The Equality Act creates a clear federal standard that matches the sentiments manufacturers already share: gender identity and sexual orientation have no impact on an employee’s abilities and discrimination is not welcome on the manufacturing floor. This legislation will no doubt see twists and turns as it works its way through Congress. We welcome this process, which will undoubtedly include a robust debate. We look forward to working with Congress as this important legislation moves forward.

Old Ideas on So-Called “Net Neutrality” Resurface in the New Congress

By | Culture and Entertainment, Economy, Regulations, Shopfloor Main, Shopfloor Policy, Technology | No Comments

Senator Ed Markey and Representative Mike Doyle recently introduced the Save the Internet Act in the Senate and House (S. 682 and H.R. 1644 respectively). The bills resurrect some old ideas on regulating the internet in the name of so-called “net neutrality”. Today, the House Energy and Commerce Committee held a hearing entitled “Legislating to Safeguard the Free and Open Internet” where they considered this legislation.

Manufacturers agree that Congress, rather than the Federal Communications Commission, should act to establish a predictable legislative framework for a free and open internet, but the bill the committee considered today is not the way to do so. The Save the Internet Act would repeal the FCC’s most recent action that replaced heavy-handed, Obama-era regulations with sensible regulations designed for the internet of today. And, rather than provide new ideas to bring our nation’s communications law into the 21st century, the bills would then reinstate those earlier overly-burdensome regulations classifying the internet as a utility under Title II of the Communications Act of 1934.

Title II regulations are not the correct way to achieve an open internet. They ignore the competitive landscape of the marketplace and, based on a law enacted before color television much less the internet, fail to account for the internet as it exists today. They would have the unintended effect of harming consumers and industry by injecting further regulatory uncertainty into the shifting federal approach to broadband, potentially stymying private sector capital investments. The FCC’s most recent actions only went into effect last summer, and the sensationalized predictions that they would signal the end to an open internet were not accurate.

Manufacturers depend on a reliable telecommunications infrastructure to connect and enable manufacturing technologies. While the legislation the House committee considered today would unquestionably be a step backwards, the National Association of Manufacturers encourages Congress to consider forward-thinking legislative solutions for our nation’s broadband future—solutions that apply fairly across the internet ecosystem and provide the certainty necessary for our industry’s continued innovation.

Energy Efficiency Legislation Paves the Way for Smart and Sustainable Manufacturing

By | Energy, Environment, Shopfloor Main, Shopfloor Policy, Sustainability | No Comments

This week, Senators Jeanne Shaheen from New Hampshire and Lamar Alexander from Tennessee introduced the Smart Manufacturing Leadership Act (S. 715), a bipartisan bill that would support manufacturers—particularly small- and medium-sized manufacturers—in adopting advanced technologies to increase their sustainability by improving the energy efficiency and productivity of their facilities and operations. Representatives Peter Welch from Vermont and Tom Reed from New York also introduced companion bipartisan legislation (H.R. 1633) in the House. The National Association of Manufacturers has been a longstanding proponent of The Smart Manufacturing Leadership Act and looks forward to working with Congress as these measures moves forward.

The legislation would leverage existing Department of Energy programs and resources at the National Labs to ensure that advanced technologies are being considered to reduce energy consumption. Additionally, the measure would establish a competitive grant program for states to assist small- and medium-sized manufacturers in implementing smart manufacturing practices. Manufacturers have taken the lead in making energy efficiency a priority and remain committed to reducing their energy intensity while producing more energy efficient products. Manufacturers already implement energy efficiency solutions to reduce their costs, become more competitive and help lessen environmental impacts. The industry continues to lead the way in deploying sensible efficiency and waste reduction measures and embracing the importance of utilizing state-of-the-art energy efficient technologies. In fact, manufacturers contributed 19 percent more value to the American economy over the past decade while reducing greenhouse gas emissions by 10 percent.

Manufacturers are committed to increasing their productivity, expanding their businesses and doing so in a way that is sensible, smart and sustainable. During the 115th Congress, the NAM supported the Smart Manufacturing Leadership Act, and we applaud Senators Shaheen and Alexander and Representatives Welch and Reed for reintroducing the bill this Congress. Their leadership continues to demonstrate a strong commitment to policies that promote energy efficiency to improve manufacturing and benefit the environment—and we will urge Congress and the administration to enact this legislation into law.

Don’t Panic About The February Jobs Report. Manufacturing Still Has 428,000 Open Jobs To Fill.

By | Shopfloor Main, Shopfloor Policy | No Comments

Manufacturers added just 4,000 workers in February, the industry’s slowest monthly pace of job growth since July 2017 and pulling back from a gain of 21,000 jobs in January. The overall nonfarm payroll data were also disappointing, from a solid increase of 311,000 in January to 20,000 in February. Weather might have negatively impacted employment growth in the month, and economists were largely expecting a pullback after the strong figure in January (especially in the aftermath of the partial government shutdown). The consensus estimate was for around 180,000 jobs created, though, not the 20,000 the Bureau of Labor Statistics reported. I would not be surprised to see an upward revision in the next release or, at a minimum, a sharp rebound.

With that in mind, it is important to not read too much into these data, as the labor market continues to be strong overall. The U.S. economy has generated a robust 209,080 jobs, on average, each month over the past 12 months, with manufacturers hiring more than 20,000 workers per month, on average, since February 2017. In addition, the unemployment rate dropped from 4.0 percent in January to 3.8 percent in February, continuing to be near 50-year lows. In addition, the so-called “real unemployment rate” declined from 8.1 percent to 7.3 percent in this report, a rate not seen since March 2001. There were 12,834,000 manufacturing workers in February—the most workers in the sector since December 2008—with almost 1.4 million employees added since the end of the Great Recession.

Manufacturers are experiencing a tight labor market that is not expected to go away anytime soon, as businesses face concerns about finding the skilled workers they’ll need to continue growing. In the most recent NAM Manufacturers’ Outlook Survey (released earlier this week), 9 in 10 manufacturers expressed a positive outlook for their business—hitting nine consecutive quarters of record optimism—but the inability to attract and retain workers continues to be the top concern for the sixth consecutive quarter. There are nearly half a million available manufacturing jobs in the United States.

And according to a study from Deloitte and The Manufacturing Institute—the education and workforce partner of the NAM—manufacturers will need to fill 4.6 million jobs over the next decade. That’s why the NAM is working hard, in conjunction with the Trump administration through its American Workforce Policy Advisory Board, to develop cutting-edge solutions to address this workforce shortage. Our country’s continuing economic prosperity will depend on developing the tomorrow’s workforce today, and manufacturers are committed to leading the way toward that end.

Why the NAM Urges the Senate to Get the Ex-Im Bank Back Up and Running

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Securing a level playing field internationally is vital to manufacturers in the United States, which already export about half their production, supporting millions of workers across the country. While there’s been a lot of focus on foreign barriers that impede U.S. exports, one of the most concerning problems is of our own making: the Senate’s failure to confirm nominees to the Board of Directors of the U.S. Export-Import Bank. The U.S. Ex-Im Bank is a federal agency that provides loans and other tools to aid businesses in the U.S. seeking to export their products to foreign markets. Without these nominees, the Ex-Im Bank cannot even consider major deals over $10 million or even act on the reforms that Congress set out it when it last reauthorized the bank in 2015.

With the Ex-Im Bank severely weakened, manufacturers in the United States are losing sales to foreign competitors who are backed up by nearly 100 other export credit agencies around the world. Indeed, virtually every major country, from Canada to China and the UK to Ukraine, provides export financing tools that are being used to the detriment of manufacturers and workers in America. For example, China’s two Export Credit Agencies routinely help their companies out-muscle their U.S. rivals. Last year, China provided $45 billion in medium- and long-term investment support for projects around the world, more than the rest of the world combined.

While foreign countries are expanding their use of export credit, the United States has been essentially sitting on the sidelines since 2015, undermining U.S. manufacturing companies big and small and manufacturing workers across the nation. According to the National Association of Manufacturer’s estimates, manufacturers lost at least $119 billion in manufacturing output, translating into 80,000 fewer manufacturing jobs in 2016 and 2017 as a result of an inactive Bank.

This week, the NAM urgently called on the Senate leadership to come together in a bipartisan manner and vote to confirm well-qualified Ex-Im Board of Directors nominees that the Senate Banking Committee approved last week on a broad, bipartisan basis. That’s a positive step forward—and a sign that senators from both parties are ready to work together to get the Ex-Im Bank back up and running.  Now the full Senate must commit to the businesses and workers that rely on the Bank by confirming these nominees as soon as possible. The cost of inaction is already too great.

Congress Must Act Now To Stop Burdensome Health Care Taxes From Taking Effect

By | General, Shopfloor Main | No Comments

Rising health care costs continue to burden manufacturing workers and American families. Unfortunately, three health care taxes are set to add even more costs to health care budgets across the country.

In 10 months, the medical device tax and the health insurance tax will go into effect. The Cadillac Tax, a 40 percent tax on “high-quality” employer-sponsored health plans, will come into full force in 2022. Regrettably, more and more employer-sponsored plans will be considered “high-quality” and taxed at the 40 percent rate because of the design of the tax, which will increase the financial burden on American families and manufacturing workers.

But it doesn’t have to be this way. Congress can act now to prevent these taxes from increasing health care costs—and manufacturers are urging it do so.

Companies are already facing hard decisions between setting aside funds to pay for the looming medical device tax bill or hiring potential new employees, investing in research and development or expanding operations. We already know the impact of the 2.3 percent excise tax on medical technologies because it went into effect for the two-year period of 2013 and 2014. During this time, tens of millions of dollars were diverted—either canceled or delayed—from innovative new research and almost 29,000 jobs were lost, according the U.S. Department of Commerce. Congress cannot allow this to happen again.

With the clock ticking on health care taxes, companies have already started preparing, and Congress must unite to address these health care taxes in advance of the looming deadlines. Today, a bipartisan group of 20 senators worked together to advance efforts to achieve full repeal of the medical device tax by introducing the Protect Medical Innovation Act of 2019. The National Association of Manufacturers key-voted similar legislation in the 115th Congress, which passed the U.S. House of Representatives with an overwhelming bipartisan vote of 283-132.

Manufacturers urge the House to introduce companion legislation and for Republicans and Democrats to expeditiously advance legislation to address the health care taxes that are fast approaching.

 

President Trump Just Held a White House Meeting About the Manufacturing Workforce Crisis…

By | General, Shopfloor Main | No Comments

Job creation in the modern manufacturing industry is surging, but employers are struggling to find enough workers with the right set of skills. This workforce crisis has caused nearly half a million open manufacturing jobs to remain unfilled, and the Manufacturing Institute’s 2018 Skills Gap Study found that number is expected to swell to 2.4 million within the next decade.

Manufacturers aren’t sitting on the sidelines, and neither is the White House. 

Yesterday, President Trump, Ivanka Trump, and Secretary of Commerce Wilbur Ross sat down with business leaders, educators, and policy makers on the American Workforce Policy Advisory Board to discuss the depth of the workforce crisis, how it is negatively impacting economic growth, and pro-active solutions to up-skill America’s workforce:

Last month, the Bureau of Labor Statistics said U.S. job openings reached a record high in December at 7.3 million. The White House says the job openings present “a mismatch between the skills needed and those being taught, requiring immediate attention to help more Americans enter the workforce.”

The advisory board members will work “to develop and implement a strategy to revamp the American workforce to better meet the challenges of the 21st century,” the White House said.

NAM President and CEO Jay Timmons, as a member of the board, participated in the White House meeting, and shared a few words with President Trump about manufacturing’s historic optimism and growth, and how the workforce crisis is acutely threatening the industry. 

 

Timmons cited the results of our latest Manufacturers’ Outlook Survey, which showed optimism in the industry at historic highs for the ninth consecutive quarter: 

JAY TIMMONS: I had the great fortune yesterday of being able to announce the results of our first quarter 2019 Survey of Manufacturers with the Vice President present at our Board of Directors meeting. And as you know, that survey has been going on for 20 years. I was able to announce that we have had nine consecutive quarters of record optimism — 

PRESIDENT TRUMP: Great. 

JAY TIMMONS: — for manufacturers. 91.8 percent. And that’s no accident. That is because of the tools we’ve been given to invest, to hire, to raise wages on benefits through tax reform, through regulatory certainty. And that’s created a bit of a challenge for us because now we have 428,000 jobs open in manufacturing. Our Manufacturing Institute predicts that that number will increase to 2.4 million in the next 10 years. So this Board, this Advisory Board, it’s perfect timing. 

THE PRESIDENT:  Thank you, Jay.  And if you remember from past years, others said that manufacturing was not going to happen; those jobs were never coming back.  And they are coming back.  We have 600,000 —

MR. TIMMONS:  Well, they’re coming roaring back.

“Thank you for taking this on,” Timmons said. “It really is going to matter for America’s future. It’s going to matter for our success in the global economy.”

It will take collaboration from manufacturing leaders, policy makers, educators, and communities to tackle the workforce crisis and guarantee further growth in the modern manufacturing industry. Yesterday’s meeting was an encouraging sign that we’re headed in the right direction. 

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