Lawmaker Wants National Manufacturing Policy

WASHINGTON -- U.S. Sen. Sherrod Brown (D-OH), chairman of the U.S. Senate Banking Subcommittee on Economic Policy, conducted a hearing today on how best to establish a national manufacturing policy. The hearing was the second in the Economic Policy Subcommittee on the challenges and opportunities facing U.S. manufacturing.

The hearing featured testimony from Mark Zandi, Chief Economist of Moody’s Economy.com; Leo Hindery, Jr., Managing Director, InterMedia Partners and Chairman of the Smart Globalization Initiative at the New America Foundation; and Scott Paul, Executive Director, Alliance for American Manufacturing.

Manufacturing accounts for $1.6 trillion -- nearly 12 percent -- of the U.S. Gross Domestic Product (GDP).  It accounts for nearly three-fourths of the nation’s industrial research and development (R&D) -- with four manufacturing industries alone (computers and electronics, chemicals, aerospace, and autos) accounting for 56 percent of private sector R&D. The industry also accounts for 35 percent of value added in world high technology product production.

Jobs in the manufacturing industry pay 20 percent more on average than service jobs. Each manufacturing job supports 4-5 other jobs throughout the U.S. economy. While employment in manufacturing has steadily declined, one in six private sector jobs is still directly or indirectly tied to manufacturing.

Even before the current recession, manufacturing has faced immense challenges. The Alliance for American Manufacturing reports more than 40,000 factories across the nation closed in the past ten years. Manufacturers, particularly small and mid-sized manufacturers, face difficulty obtaining credit and competing in the global marketplace due to unfair subsidies and currency manipulation. The Manufacturing Alliance/MAPI reports the current recession in manufacturing is the worst since the Great Depression, and forecasts a decline of nearly 12 percent in manufacturing production in 2009.

Brown proposed the committee focus on five areas to help shape a national manufacturing policy:

Innovation -- Create a climate for investment in research and development and establish an Innovation Research Fund for work in clean energy, information technology, defense, and aerospace.

Supply Chains -- Give supply manufacturers the tools to transition from contracting industries, such as autos, to growing industries, like clean energy.

Skills -- Build sector-based systems that link highly-skilled workers with emerging industries to promote long-term competitiveness. 

Coordination -- Similar to a federal natural disaster plan, when there is a massive disruption in the economy due to layoffs, a plan is in place to rapidly assist workers, business and communities.

Fair Trade -- Increase enforcement of trade laws.

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