Over on Procurement Leaders blog, my old friend Paul Teague recently touched on the issue of jobs growth and creation, especially in the context of re-shoring manufacturing work from East to West. In his post, Paul mentions that President Obama is about to "make a big pitch for legislation to allow tax breaks for companies that insource jobs back to the US ... [and in a recent] weekly radio address, he pleaded with manufacturers to bring jobs back home, saying they should ask what they can do to bring jobs back to the country that made them successful." Paul then goes on to argue for capitalism -- and by extension, the Invisible Hand -- as the best tool to bring jobs back (i.e., re-shore when they make economic sense). Yet here at Spend Matters, we take a slightly different viewpoint.
It's out belief that jobs growth could, in fact, be an outgrowth of good policy. But not just policy aimed at rewarding those who moved jobs offshore in the first place, as Obama is introducing. Rather, we need policy aimed at achieving a range of ends that start with reducing business uncertainty (e.g., Obama's healthcare policy after he took office was the quintessential example of legislation that created uncertainty rather than taking it away). But even more important, we need policy aimed at creating a sustainable base of skills and infrastructure to make the US a more attractive manufacturing base. Indeed, we need to foster an environment, a market, that can create a critical mass of multi-tier suppliers in key industries where they no longer exist (to recall a high-tech manufacturing industry in the US, we need to go all the way back to televisions before the Japanese originally created the new manufacturing value chain -- from individual parts to finished product -- in this market).
Such a policy move might begin with (as Lisa Reisman and I recently suggested in an issue of Surplus Record) a pro-manufacturing policy plank that implements "tax credits and programs with teeth." Consider "as one example, we need to get beyond just a payroll tax credit or refund for new employees or those that were previously unemployed, which has done little or nothing to fuel permanent manufacturing hiring. A more radical and effective path would be to truly stimulate hiring by a policy that allowed manufacturers to gain a credit equal to the first year of salary for skilled manufacturing positions, along with ongoing credits in future years of employment. Such efforts should also be tied to public and private sector training and apprenticeship programs for skilled manufacturing trades, from welding to machining -- and beyond."
In the second post in this series, we'll suggest a number of other recommendations for dealing with the manufacturing jobs challenge, going beyond the lip service our current Federal elected officials are giving to the issue.