Blog | Page 16 of 35 | The Made in America Movement

Why ‘Made In The USA’ Is Making A Comeback

As kids in a boisterous playgroup click together the brightly colored interlocking plastic rods and connectors to assemble a toy based on Angry Birds, they may not give much thought to where the pieces came from.

But those bright K’NEX toys are trendsetters. Like most plastic toys sold in the United States, K’NEX building sets were made in China. But in 2009 the company began on-shoring much of its manufacturing and kit assembly to the eastern Pennsylvania region.

K’NEX, part of the Rodon Group, a maker of close-tolerance injection molded plastics, is one of the many companies returning manufacturing operations to the U.S. for one simple reason: it makes sense.

In fact, more than half of U.S.-based manufacturing executives at companies with sales more than $1 billion plan re-shore production to the U.S. from China or are actively considering it, according to a 2013 survey by The Boston Consulting Group.

Caterpillar, Ford, NCR and Whirlpool, to name only a few, have brought manufacturing back from over seas, and even Frisbee molding from Wham-O has left Mexico for the U.S. Walmart has committed to stocking $50 billion of domestically sourced products in the next 10 years.

Apple has contracted with a Flextronics America plant in Texas to assemble its new Mac Pro computer, using domestically sourced parts. Gorilla Glass, found in the iPhone display, comes from a small-town factory in Kentucky.

Rising wage rates in China and higher shipping rates are partly behind the on-shoring moves, as are lower U.S. energy prices. But closing the gap between the local market and U.S.-based engineering and marketing staff also pays off.

When GE brought back production of its hybrid water heater to Appliance Park in Louisville, Ky., it also re-designed the product. The company cut 20% of the parts and 25% of materials costs and sells the product for $300 less than the version made in China. Now the shipping time from factory to distribution center is 30 minutes instead of a month.

In the past five years, K’NEX moved 95% of its toy production back to Hatfield, Pa., and uses two nearby plants to print packaging and assemble the components into kits.

Before, the company made the rods, connectors, gears, wheels and other components in the Pennsylvania plant, then shipped them to China for finishing and packaging. The round-trip time was about three months. That lag made it impossible for the company to react to short-term market shifts, such as booming popularity of a licensed product.

With a long supply chain K’NEX had to make bets on which property would be hot six months or more ahead of the holiday shopping season, says CEO Michael Areten.

Building a domestic supply chain gives the company a competitive advantage.

“We got a call from a retailer a few weeks before Christmas that they had shelf space to fill, and I told them we’ll make the products this week and fill the shelves next week,” Araten says. “You can’t do that if you’re bringing it in from Asia.”

SOURCE: Forbes

The Real State Of The Union For Workers

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WASHINGTON — “The state of our union is strong,” President Obama will tell the country tonight, echoing a sentiment shared by nearly every executive before him. But just how strong is it for the country’s working people, particularly those on the lower end of the income scale?

The number of workers living in poverty exploded during the Great Recession and its aftermath, as people were hobbled by part-time work, temporary employment and the disproportionate growth of low-wage jobs. Most workers have endured at least a decade of wage stagnation, with their pay being well outstripped by corporate profits. A McDonald’s executive may now earn $8.75 million a year, but a McDonald’s worker still earns $8.25 an hour.

Below are just some of the wages and working conditions faced by tens of millions of workers in the U.S. — and how those conditions are determined in part by policy set in Washington.

Warehouse Workers

Warehouse work is the hidden engine of the U.S. retail sector, but many of the so-called “lumpers” who load trucks bound for major retailers earn poverty wages on a contingent basis. The companies whose products are being moved prefer to outsource the warehouse responsibilities to third parties, which in turn outsource the work to other third parties. While it saves the companies plenty of money, the byzantine contracting arrangements tend to blur the lines of corporate accountability, leading to widespread allegations of wage theft and other abuses by temp firms at the bottom of the contract chain. As one expert put it to The Huffington Post, “All of these companies, wherever they possibly can, they want to create a workforce that doesn’t work for them.”

Dollar Store Employees

Dollar stores — Dollar General, Dollar Tree and Family Dollar — are one of the fastest-growing sectors of the retail economy. By one measure, a new dollar store is opening every six hours in the United States. But much of that growth, as HuffPost reported, is underwritten by dubious labor practices by the big chains that collectively employ over 100,000 people. Even though managers spend their days doing grunt work — like unloading trucks and stockings shelves — their designation as “managers” excludes them from basic protections in federal labor law, like a guaranteed minimum wage and time-and-a-half for overtime. Some of them work so hard physically that they get hurt, but at the end of the day, they don’t earn much more than the workers they oversee. Managers throughout the country are now suing the chains over these practices.

Meatpackers

Working on a poultry processing line is a dangerous and low-paying job, full of repetitive motion and muscle pain. A recent government study found that four in ten workers at one chicken plant in South Carolina showed signs of carpal tunnel syndrome, the painful hand-and-wrist condition. Despite such findings, federal regulators are now considering a proposal to raise the maximum line speed even higher — a move that has the wide backing of the poultry industry. One poultry worker told HuffPost that the men and women who eviscerate and debone chicken carcasses can barely keep up at current speeds. Faster line speeds, he said, were nearly unimaginable: “It’s a job where you don’t get any relief.”

Repo Agents

While auto repossession has always been difficult and dangerous work, big banks have recently found new ways to make it low-paying as well. The lenders who underwrite auto loans have recently pushed auto repossession agents into working on a “contingency” basis — meaning if they don’t find the car, they don’t get paid a dime. Not only has that squeezed agents’ wages, it’s also encouraged them to put their lives and others’ in danger by making risky repossessions. HuffPost reported the story of one agent working on contingency who ran over a car owner during an altercation. As the owner of one repo outfit said, the lenders’ stinginess is “turning good people into bad, making them do things they wouldn’t normally do.”

Fast-Food Workers

The quintessential image of a fast-food worker is a high school kid looking for spare cash at night and on the weekends. In reality, many fast-food workers are now grownups with families to support; 40 percent are now 25 years or older, according to the National Employment Law Project. But despite the growing age and experience of its workforce, the fast-food industry is about as low-paying as its ever been when adjusted for inflation, with a median wage under $9. HuffPost has interviewed fast-food workers whose most recent raises were granted not by their employers but by the U.S. Congress, when the federal minimum wage was last hiked in 2009. For minimum wage workers in states that don’t adjust the wage floor each year for inflation — and that would be the majority of states, including pricy New York — the wait between raises can be years.

Taxi and Sedan Drivers

A lot of sedan and taxi drivers aren’t technically employed by the companies they work for. Like other folks in the transport industry, they’re instead classified as “independent contractors” working on their own. Many of them aren’t independent in any real sense. The companies set the terms of employment — where the drivers work, when they must be available, and even what they wear while on the job. But the companies reap major benefits by classifying the workers as independent — like not having to pay workers’ comp or unemployment taxes, and not having to worry about their drivers unionizing. Since they’re technically not employees, the drivers can’t expect health coverage or other basic workplace benefits. In some cases, they don’t even get to keep the “gratuities” that the companies charge their clients.

Walmart Workers

Earlier this month, officials at the National Labor Relations Board formally accused the world’s largest private-sector employer of retaliating against workers who spoke out about working conditions. The general counsel for the board charged Walmart with violating the rights of more than 60 workers in 14 states surrounding the Black Friday strikes that became
national news for the r
etailer.

Coal Miners Who Take A Stand

Coal mining remains one of the most dangerous jobs in the world. Even though U.S. miners have strong whistleblower protections written into federal law, those who speak out about mine hazards or refuse to do risky work still have a way of getting demoted or fired. The official investigations into the Upper Big Branch mining disaster, which killed 29 people, showed that miners who dared question the dubious orders coming from management were threatened with their jobs. Such coercion can be routine in some mines. Charles Scott Howard, a Kentucky miner, has been reinstated on the job at least three times after being retaliated against for his whistleblowing on safety issues. Reuben Shemwell, another Kentucky miner, was hit with a lawsuit by his own company merely for filing a whistleblower complaint with the feds.

Restaurant Workers Who Try To Unionize

With few exceptions, the restaurant industry is a union-free world. Chains and franchisees can usually rely on the work’s high turnover rate to keep unions naturally at bay, but in recent cases, owners have taken a much more proactive approach. A Jimmy John’s sandwich shop franchisee in Minnesota fired pro-union workers during a heated unionization battle. Similarly, a major Panera franchisee in Michigan has declined to accept the successful union election of its bakers. The federal labor board has issued a raft of union-busting charges against the company, but the bakers still don’t have a contract. “I came into this thinking we had the right to bargain collectively,” one baker told HuffPost.

Housekeepers

At a lot of U.S. hotels, the men and women who clean guests’ rooms are no longer even employed by the hotels. Instead, they work for temp staffing agencies on a day-to-day basis. This arrangement has obvious benefits for large hotel chains; by outsourcing the work, they don’t have to worry about offering a living wage, health care coverage or other benefits to the housekeepers who clean their hotels. But for workers, the outsourcing comes at a steep cost. Previously in-house workers can be rehired through the temp firms at substantially lower wages, and many of them enjoy no job stability whatsoever as temporary employees. “It’s everywhere now,” an Indianapolis janitor said of the hotel outsourcing. “The housekeepers, the restaurant, the stewards, laundry, room service …”

Home Care Workers

The roughly 2 million home care workers who clean, cook and care for the elderly and disabled earn some of the lowest wages in the health care sector. Part of their low earnings can be traced directly to federal law. Decades ago, Congress carved these workers out of basic labor protections through the so-called “companionship exemption,” which equated home health workers with casual babysitters. As a result, these workers still don’t have the minimum wage and overtime protections enjoyed by other hourly workers in the U.S. That will finally change in 2015, courtesy of a new rule issued by Obama’s Labor Department. After being excluded for years, workers who log as much as 80 hours a week may actually get some overtime pay.

SOURCE: Huffington Post

Wanted: A Job-Creating Manufacturing Policy

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Faced with a sluggish economy and a Congress expected to be notably unproductive, President Obama is calling for “a year of action.” Where he can, he says, he’ll go it alone. And thus we have the manufacturing institute that his administration awarded earlier this month to a consortium in Raleigh, N.C. It’s the second in a planned network of innovation hubs backed by public and private funding — all part of the president’s plan to bolster our manufacturing sector, the historic home for America’s middle-class jobs.

“I don’t want the next big job-creating discovery, the research and technology to be in Germany or China or Japan. I want it to be right here in the United States of America,” said the president, unveiling a facility that will develop advanced semiconductor technology. He’s right: The government should leverage its resources to encourage industrial research, which is sometimes difficult for private firms, particularly smaller ones, to do on their own. Although we have a long way to go to catch up with Japan, Germany, and other advanced economies, this nascent network will pay off in the long run.

But the rest of the president’s manufacturing plan could still use some work. Most of what the administration would call its manufacturing strategy is just creative data interpretation.

Take a look at Exhibit A: our growth in exports. Much of this is due to America’s boom in energy production and is benchmarked by a historic export low during the Great Recession. The president is fond of touting this figure, since it implies a healthy, productive economy. But imports in manufactured goods have grown much faster, particularly from China, resulting in a bilateral trade deficit that sets records every year.

Now consider Exhibit B: manufacturing employment. Obama told the crowd in North Carolina, “Our manufacturers have added over the last four years more than 550,000 new jobs, including almost 80,000 manufacturing jobs in the last five months alone.” But that selective reading of the numbers doesn’t acknowledge that the country lost roughly 5 million factory jobs since the year 2000, and has seen only a net increase of 77,000 since January 2013.

Job growth in manufacturing is also way off the target that the president himself set. During his re-election campaign, he pledged to create 1 million new manufacturing jobs by the end of his second term. That will require more than 25,000 new jobs a month until 2017 if he’s to meet his own expectations, and getting there will take more than an upward swing in the business cycle.

So imagine if, during Tuesday’s State of the Union address, the president unveiled a new, job-creating manufacturing strategy for America. What should the strategy include?

First: Guarantee enough new infrastructure investment to repair and upgrade our roads, bridges, ports, and energy grid. Doing so wouldn’t be politically impossible. The spending bill just passed by Congress includes a sizable increase for water infrastructure investment.

Second: Ensure the government is spending our tax dollars on American-made steel, iron, and manufactured goods instead of outsourcing those projects to China. In short, buy American.

Third: Increase tax incentives for reshoring (the return of jobs from overseas), and only consider reforming corporate taxes in a way that retains and expands incentives for domestic research, hiring, production, and capital expenses.

Fourth: Build clear career pathways for young people and the long-term unemployed to ensure a dynamic workforce for American manufacturing.

Fifth: Set a trade agenda that emphasizes reciprocity and balance, starting with China. We should aim to halve our record trade deficit with Beijing, and we could do so in part by passing bipartisan legislation to deter currency manipulation.

If President Obama took even half of these steps, we’d have the basis for a manufacturing policy that helps to expand our middle class.

If 2014 is to truly be a year of action, we need more than half-measures. We need more good-paying manufacturing jobs. Will the president commit to supporting them in his State of the Union address?

Scott Paul is president of the Alliance for American Manufacturing.

President Raises Minimum Wage For Federal Contractors

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A construction worker pauses at the Second Avenue Subway project site in New York, Jan. 10, 2014. SPENCER PLATT/GETTY

The president will raise the minimum wage for federal contractors to $10.10, NBC News has learned.

He will announce the executive order during Tuesday’s State of the Union address.

This means that new contracts for construction workers, the people who wash dishes on military bases, and janitors who would have made less than $10.10 will be hired at a higher rate.

“A higher minimum wage for federal contract workers will provide good value for the federal government and hence good value for the taxpayer,” a release announcing the move said. “Boosting wages will lower turnover and increase morale, and will lead to higher productivity overall.”

It is the latest executive order the president has used to accomplish some of his goals without the approval of Congress; prominent Republicans have criticized the president for what Sen. Marco Rubio of Florida called an abuse of power.

When a White House spokesman said that more executive orders were in the works for 2014,Kentucky Republican Sen. Rand Paul retorted that “it sounds vaguely like a threat.”

“I think it also has a certain amount of arrogance in the sense that one of the fundamental principles of our country were the checks and balances,” Paul said on CNN.

But the release argues that the president is “using his executive authority to lead by example, and will continue to work with Congress to finish the job for all Americans by passing the Harkin-Miller bill.”

The existing minimum wage bills, proposed by Sen. Tom Harkin and Rep. George Miller in both chambers, would raise the minimum wage to $10.10 for all workers in $0.95 increments and tie it to inflation. It would raise the minimum wage for tipped workers as well.

A Washington Post poll out on Monday found that a slim majority, 52% of Americans, approve of the president’s Congress-bypassing executive orders. (The sampling error is +/- 3.5 points.)

Jay Carney Says Obama Will 'Bypass Congress' In 2014

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White House Press Secretary Jay Carney predicted that President Barack Obama will “bypass Congress” when necessary in 2014, taking unilateral executive action to carry out his agenda.

Speaking on ABC’s “This Week” ahead of Tuesday’s State of the Union address, Carney was asked how the president could get things done this year, when Republicans in Congress will no doubt be just as resistant to his policies as they have been in the past.

“I think what we saw last year in 2013 was a Washington that did not deliver for the American people,” Carney said. “The president sees this as the year of action, to work with Congress where he can, and to bypass Congress where necessary.”

Bypassing Congress will likely mean taking executive action in certain areas. In the past, Obama has halted the deportations of certain young, undocumented immigrants and ordered modest changes to the federal background check system for gun purchases, among other actions. Progressives are currently pushing the president to raise the minimum wage for federal contractors.

“We’re not just going to be waiting for legislation in order to make sure that we’re providing Americans the kind of help they need. I’ve got a pen and I’ve got a phone,” Obama said at a Jan. 14 cabinet meeting.

Carney did not go into specifics on what the president might do. But he expressed hope that further executive action will not be necessary on one key part of the president’s second-term agenda.

“We’re actually optimistic that 2014 will be the year Congress delivers to the president’s desk a bipartisan, comprehensive immigration reform,” he said.

Separately, Carney was asked whether passing Obamacare would have been worth it if the Democrats lose control of the Senate in the 2014 elections. “It is absolutely worth it, no matter what happens politically,” Carney said.

Watch full clip below.

SOURCE: Huffington Post

Congressman Thompson's Provision for American Flags Passes

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WASHINGTON, D.C. — Congressman Mike Thompson’s (D-St. Helena) bipartisan provision requiring every American flag purchased by the Department of Defense (DOD) to be 100-percent manufactured in the United States, from articles, materials, or supplies that are 100-percent of grown, produced or manufactured in the United States, was passed by the House of Representatives and Senate, and will be signed into law.

“This provision will make sure every American Flag DOD buys is made in America, by American workers with American products,” Thompson said. “I am proud to have worked to pass this law so that our men and women in uniform never have to fight under a U.S. flag made overseas, and so that our Defense Department never again spends American tax dollars on a U.S. flag made overseas.”

Thompson’s provision applies the Berry Amendment to the American Flag. The Berry Amendment, originally passed in 1941, prohibits DOD funds from being used to acquire food, clothing, military uniforms, fabrics, stainless steel and hand or measuring tools that are not grown or produced in the United States, except in rare exceptions. Thompson’s provision applies the same rules for the DOD’s acquisition of American Flags, which previously were not listed as a covered item.

Precedent already exists for such a provision. The Department of Veterans Affairs is required to only purchase U.S.-made American Flags for servicemembers’ funerals.

Thompson’s provision passed as part of H.R. 3547, the Fiscal Year 2014 omnibus appropriations bill.

Thompson represents California’s 5th Congressional District, which includes all or part of Contra Costa, Lake, Napa, Solano and Sonoma counties. He is a senior member of the House Ways and Means Committee and the House Permanent Select Committee on Intelligence. He is also a member of the fiscally conservative Blue Dog Coalition and chairs the bipartisan, bicameral Congressional Wine Caucus.

SOURCE: Record-Bee

Honda Exports More U.S. Cars Than it Imports

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From 2010, here is the 100,000th Honda Civic produced at the Honda Manufacturing of Indiana plant in Greensburg, Ind. Honda now exports more than imports (Photo: Wieck)

DETROIT — For the first time since building its first Accord in Marysville, Ohio, Honda exported more U.S-made cars than it imported from Japan in 2013.

The automaker exported 108,705 U.S.-made Honda and Acura vehicles last year while importing 88,537 vehicles from Japan to the U.S.

With assembly, engine and transmission plants in Ohio, Indiana, Alabama and Georgia, Honda exports such models as the Accord, Civic, CR-V, Odyssey, Acura RDX and MDX to 50 countries in Central America, South America, Africa and the Middle East.

By exporting more vehicles than it imports from Japan to the U.S., Honda rebuts the argument that Japanese automakers benefit from the lower value of the yen. The growth of Asian and European automakers in the U.S. further complicates the eternal debate about what is an American-made vehicle.

“This is really a significant milestone for our North American operations — it is really one that has been 30 years in the making,” said Rick Schostek, senior vice president of Honda in North America. “For a long time our goal has been self-reliance in North America.”

Honda began manufacturing cars in Ohio in 1982 when its plant in Marysville plant opened. The automaker now operates 14 manufacturing plants in the U.S., Canada and Mexico.

They are mostly supported by a U.S.-based automotive parts supply chain. Honda also makes lawn mowers and motorcycles in North Carolina.

In 2013, nearly 95% of the vehicles Honda and Acura sold in the U.S. were produced in North America, including factories in Alliston, Ontario, and El Salto, Mexico. Honda will open another plant in Celaya, Mexico, next month to make its Fit subcompact.

Honda invested $12.3 billion in the U.S. between 1982 and 2013, and employs more than 26,000 Americans.

In recent years, as the value of the yen has declined, some automakers have said Honda and other Japanese automakers have an unfair trade advantage.

After falling to more than 130 yen to the dollar in 2012, the Japanese currency has rebounded to about 100 to the dollar. When the yen is weak, the dollars Honda, Toyota and Nissan collect from U.S. sales translate to more yen, the currency in which they report financial results. But the dollars they spend on American workers and technology also raise yen-based costs.

“It is really hard for us to fathom that we have an unfair advantage,” Schostek said, because the vast majority of the vehicles it sells in the U.S are made in North America.

SOURCE: USA Today

Foxconn in Talks With Multiple U.S. States for Manufacturing

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Foxconn’s founder and Chairman Terry Gou told reporters any U.S. investment would not be for labor-intensive manufacturing such as assembling smartphones and tablet computers. Photographer: Ashley Pon/Bloomberg

Foxconn Technology Group, the maker of Apple Inc.’s iPhone, is in talks with U.S. states including Arizona and Colorado to build advanced manufacturing facilities as part of plans to set up factories closer to its clie

Representatives from at least six states have contacted the company as they seek to get plants set up in their jurisdictions, Simon Hsing, a spokesman for Taipei-based Foxconn, said in an interview yesterday. The company is looking to open plants for making tools, molds and connectors, he said.

Foxconn, the world’s largest custom manufacturer of electronics, may expand in its largest market as clients including Apple seek to have their products made in the U.S. Its Foxconn Interconnect Technology unit has announced an expansion in Pennsylvania, which will create about 500 jobs.

Getting support and purchase commitments from customers will be a key consideration in building the plants and Foxconn is still in talks about what products clients want from U.S. facilities, Hsing said, declining to identify the customers.

Arizona Governor Jan Brewer met Foxconn’s founder and Chairman Terry Gou in November, while officials from Colorado, Texas, New York, New Jersey and Louisiana have all made contact with the company, Hsing said.

Lucy Nashed, a spokeswoman for Texas Governor Rick Perry, declined to comment on “potential ongoing negotiations.” Colorado officials declined to comment in an e-mailed response to Bloomberg News. Representatives of the other states didn’t immediately reply to e-mails.

Hon Hai Precision Industry Co. (2317), the biggest company in the Foxconn group, in November announced plans to spend $30 million in Pennsylvania through Foxconn Interconnect, a division which develops connectors used in computers and smartphones.

Carnegie Mellon

Foxconn will also invest $10 million in a venture with Carnegie Mellon University for research in robotics and manufacturing.

Any U.S. investment would not be for labor-intensive manufacturing such as assembling smartphones and tablet computers, Gou told reporters in Taipei on Jan. 26. Instead, the company would seek to build facilities that focus on knowledge and content-based skills, he said.

Liquid-crystal display panels are an example of capital intensive work better-suited to the U.S., Gou said. The company has no current plans to build an LCD factory in the U.S., he said.

Closer Proximity

Closer proximity to supply chain partners, such as Applied Materials Inc.and Corning Inc., are among the benefits of being in the U.S., Gou said.

In addition to iPhones and iPads for Apple, Foxconn also makes game consoles for Microsoft Corp., tablets for Amazon.com Inc. and PCs for Dell Inc. and Hewlett-Packard Co., mostly at its China facilities which employ more than one million workers. Foxconn also has more than 20,000 people at plants in Mexico.

Foxconn is investing in automation to convert its employees from production workers to engineers, helping the company avoid an impending labor shortage in China while boosting profit margins.

Gou said he met Tesla Motors Inc. Chairman and Chief Executive Officer Elon Musk this month, telling the 42-year-old that Foxconn’s background in stamping and molding can help the Palo Alto, California-based company make its electric cars cheaper.

To contact the reporter on this story: Tim Culpan in Taipei at tculpan1@bloomberg.net
To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

SOURCE: Business Week

Not Just Patriotic, U.S. Manufacturing May Be Smart

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General Electric’s Appliance Park has been in Louisville, Ky., since 1951. But it’s putting new power behind its U.S. production.

The advantages to making products in the U.S. are starting to stack up — and companies are taking notice. Among them are Apple, and General Electric, which is making big investments at home.

It’s not just a matter of publicity, either. As the December 2012 issue of The Atlantic reports, companies are seeing real economic advantages to “insourcing,” a reversal of the outsourcing trends that sent U.S. manufacturing overseas.

A New Approach

General Electric opened Appliance Park in Louisville, Ky., in 1951, but lately it has been making some changes there. In August, the company announced an $800 million investment in jobs, products and the manufacturing process itself.

Back in 2008, Rich Calvaruso gathered his team at Appliance Park and told them they had to rethink the dishwasher. As a “Lean” leader, Calvaruso’s job is to figure out how to make things more efficiently. So he asked a team of factory workers, designers and marketers to put their heads together. They managed to cut down the time it takes to build the dishwasher by one-third.

The dishwasher’s orientation was the key. When it was set up a certain way, operators down the line could do their work without spending time manipulating the washer itself.

Even though it now takes fewer people to make that dishwasher, not a single person was laid off. Calvaruso tells Guy Raz, host of weekends on All Things Considered, that those employees were freed up to work in other parts of the company.

That process set in motion a company-wide re-evaluation of how GE should operate. The new philosophy was simple: It might make more business sense to have everyone involved in a product work in the same place. That thinking led to a change that couldn’t have happened if some workers were in China, others in Mexico and some in the U.S.

GE holds up another example of improved efficiency. The marketing team wanted to eliminate four visible screws to improve the dishwasher’s design. A diverse group of workers found a way to do that, making the manufacturing process quicker as a result.

With workers in different departments physically sharing the same space, Calvaruso says, these cross-interest conversations can happen more easily.

Where’s The Incentive?

Reporter Charles Fishman, who wrote about Appliance Park in the issue of The Atlantic, doesn’t think it’s a blip. He sees the four-screw story as a metaphor for this insourcing boomlet.

“To me the power of the four-screws story is no one ever would have known, in the old method, a year and a half ago, that anybody wanted the screws to disappear,” he says, “that they could have been made to disappear, that making the screws go away makes the door cheaper, easier to make and a better product.”

Fishman says companies are finally seeing the economic advantages of doing things differently.

“What I discovered is it’s not clear this huge wave of outsourcing was done for really smart, rational business reasons,” he says.

Companies started moving jobs overseas when they calculated how much cheaper the labor was, Fishman says, but they weren’t factoring in other kinds of costs.

“This stuff turns out to be really complicated,” he says. “And you have to sit down and ask a whole set of questions before you understand that you’ve been making a mistake for a year, or two years, or four years.”

One of those factors that businesses are starting to take into account is intellectual property, Fishman says. Specialized technology can make products more competitive, but if they’re made overseas, it’s easier for others to make knockoffs.

Another incentive is energy prices, he says. Manufacturing in the U.S. cuts down on transportation costs. Plus, he says, the factories themselves can run on natural gas, which is cheaper in the U.S.

All of these variables put together make the difference, Fishman says.

“I don’t think you can say just wages, or just energy prices, or just transportation time,” he says. “But when you stack them up, it really gets to be incredible.”

Re-Evaluting The Model

But U.S. manufacturing jobs aren’t exactly erupting in a boom.

“There haven’t been this few people working in factories in the United States since 1941. There were a third fewer people in the country then,” Fishman says.

However, the output of the workers that are in the industry is high.

“Because of the recession, we’re not quite at the highest dollar value the country’s ever produced in manufactured goods, but we’re very close,” he says.

And as more companies like GE make big investments in U.S. manufacturing, others could start to follow.

Fishman says the U.S. manufacturing industry won’t ever look exactly like it used to, but that different kinds of manufacturing will start happening in different places. However, he says, the notion that the U.S. will never make anything again is “dramatically overstated.”

“I think smart companies will see it isn’t an act of patriotism or charity,” he says. “It’s smart business to make stuff here.”

SOURCE: NPR News
Original article posted December 8, 2012

The Reason 600,000 U.S. Manufacturing Jobs Vanished

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This isn’t your father’s America.

Gone are the days you could graduate high school, get a job at a local factory, and have a job for life. The data suggests manufacturing jobs are in a permanent decline.

Even so, we’re now manufacturing more and more stuff in the United States. It’s not that manufacturing left the U.S. Instead, the manufacturing jobs did.

How 600,000 jobs vanished
It may be a tough environment for those seeking work in the manufacturing industry. But those who already have a manufacturing job have it better than ever. In fact, the average manufacturing worker is working more hours per week than at any time since World War II:

It’s hard to see it in the chart — the current manufacturing employee works 42.1 hours per week. That’s higher than the “Made in the USA” heyday of the 1950s and 1960s.

Factories fear adding new workers
It’s curious that at a time manufacturing workers are working more, fewer factories are hiring. Since the bottom in manufacturing employment in 2010, factories have only added 500,000 workers — too few to keep work weeks at 40 hours.

There’s an important takeaway from these two charts. First, factories are reluctant to hire new workers, choosing to pay their existing workers an average of 2.1 hours of overtime. Secondly, if the manufacturing industry hired enough workers to push down the average factory week to a normal level of 40 hours, the industry would create some 600,000 new American jobs.

There are plenty of reasons factories aren’t hiring. For one, manufacturers recognize the cyclicality of the industry — perhaps they’re not ready to hire if another recession may be around the corner. Secondly, manufacturing workers bring big fixed costs like pensions and medical benefits. To put it simply, paying overtime wages is less costly than adding new workers.

So, while we’re making more products in the United States, there’s something we’re not making: new manufacturing jobs. That trend is, unfortunately, probably here to stay.

SOURCE: NPR News

As Overseas Costs Rise, More U.S. Companies Are 'Reshoring'

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Paul Gibson works on the Geo-Spring hybrid water heater at General Electric’s Louisville, Ky., plant. For many years, GE outsourced manufacturing of the water heater to a company in China. But in 2009, it decided to bring production back to the U.S. | Photo Credit: Jackie Northam/NPR

For decades, American companies have been sending their manufacturing work overseas. Extremely low wages in places like China, Vietnam and the Philippines reduced costs and translated into cheaper prices for consumers wanting flat-screen TVs, dishwashers and a range of gadgets.

But now a growing number of American companies are reversing that trend, bringing manufacturing back to the United States in a trend known as “reshoring.”

Kim Freeman, a spokeswoman for General Electric Appliances, walks into a sprawling plant in Louisville, Ky. Machine noise is thunderous in the brightly lit room. The finished product, a hybrid water heater, is not much to look at — tubby, about 4 feet tall, with a few knobs and levers. But it’s actually a high-tech, energy-efficient appliance.

For years, GE outsourced manufacturing of the water heater to a company in China. In 2009, GE did the math and, considering rising wages overseas as well as climbing transportation costs, decided to bring production back to the U.S.

The company wanted more control of the product, especially the technology that goes into it, says Freeman. To maximize savings, the appliance had to be completely redesigned.

GE ripped apart one of six massive factories at the complex in Louisville, and built a water heater assembly line. It worked out a new, lower-wage structure for employees, and brought in experts to help reduce waste and time. Everything was geared to reducing costs.

A month later, GE also began producing high-end refrigerators domestically, the type with the bottom drawer freezer. Until then, GE had produced that type of refrigerator in Mexico.

Mike Chanatry, the head of manufacturing for GE Appliances, says the decision to bring some of the manufacturing back to the U.S. was a risk — but one worth taking. He says GE faces stiff competition from LG Electronics and Samsung, up-and-comers in the world of appliances.

A Broader Trend

Other major companies — Ford and Whirlpool among them — have also brought back some of their products. But so have many smaller companies, says Harold Sirkin, a senior partner at Boston Consulting Group who has been surveying companies about reshoring.

“In the beginning of 2011, for the most part, most people thought that this was just impossible, that there would be no reshoring to the U.S., that everything was going to China, manufacturing was leaving the country and will never come back,” says Sirkin. “And I think the striking thing is how much that’s changed in the last three years.”

Sirkin says at least 200 companies have already returned, and there’s been a dramatic jump recently in the number of companies saying they’re seriously thinking about it. Sirkin says a huge factor has been rising wages overseas. Pay in China has risen at least 15 percent annually for the past few years. Wages in China are still comparatively low compared with the U.S., but there are other important factors.

“You went to China because it was just so cheap you couldn’t help it,” he says. “But if you’ve got the engineers and people in the U.S., and the customer base in the U.S., you’d like to be close to the customer. It gives you a shorter supply chain.”

Also, the cost of shipping has shot up, while domestic energy prices are low.

If this trend continues, Sirkin believes 20 to 25 percent of products that were sent offshore will eventually return to the U.S.

But the challenges in bringing back manufacturing can include finding enough skilled labor, says professor Arie Lewin, director for the Center for International Business, Education and Research at Duke University.

Harry Moser, president of the Reshoring Initiative, which helps companies figure out if it’s worth bringing manufacturing back to the U.S., agrees that making the move can be a challenge. And, he says, “There’s challenges of getting the consumer to understand that the product is made in the USA and to give a little extra preference to that product.”

Moser says Wal-Mart’s decision to put $50 billion more worth of American-made goods on its shelves over the next 10 years is dramatically important, even if Wal-Mart qualifies that by insisting those products don’t cost more than versions made overseas.

SOURCE: NPR News

China's Moon Rover "Jade Rabbit" in Trouble

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The rover Jade Rabbit, also known as Yutu, has been exploring the Moon’s soil

China’s Jade Rabbit Moon rover is in trouble after experiencing a “mechanical control abnormality”, state media report.

The Moon exploration vehicle ran into problems due to the moon’s “complicated lunar surface environment”, Xinhua news agency said, citing science officials.

The rover landed in December as part of China’s Chang’e-3 mission – the first “soft” landing on the Moon since 1976.

It was expected to operate for around three months.

Earlier this month, the Beijing Aerospace Control Centre said that Jade Rabbit, also known as Yutu, had successfully explored the surface of the Moon with its mechanical arm.

Lunar nightThe malfunction emerged before the rover entered its scheduled dormancy period on Saturday, Xinhua reported, citing the State Administration of Science, Technology and Industry for National Defence (SASTIND).

Scientists were organising repairs, the news agency added, without providing further details.

The rover was due to become dormant for 14 days during the lunar night, when there would be no sunlight to power the rover’s solar panel, reports said.

The malfunctioning rover presents the first public mishap China’s ambitious space programme has experienced in years, following several successful manned space flights, the BBC’s Celia Hatton in Beijing reports.

Xinhua said the news of the rover’s troubles had generated extensive discussion on Chinese social media.

“People not only hailed the authority’s openness to the accident, but also expressed concern,” it said.

On Sina Weibo, China’s largest microblog provider, users began tagging their posts with the hash tag “#hang in there Jade Rabbit”.

Users also circulated comic strips depicting a rabbit on the Moon, and rabbit-themed pictures, while expressing their support for the rover.

User Jessica_S_AC_USK wrote: “I want to cry. Go Jade Rabbit, even if we fail this time, we still have next time – our Chinese Jade Rabbit’s goal is the sea of stars! We will not give up easily.”

Referring to a Chinese folktale about a rabbit on the Moon, another microblog user wrote: “Whatever happens, we must thank Jade Rabbit. When our generation tells stories to our children, we can confidently say: ‘There really is a Jade Rabbit on the moon!'”

SOURCE: BBC News

Patriotic style: Team USA reveals Olympic Opening Ceremony Uniforms

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The TODAY anchors got into the Olympic spirit, dressing up in the official Team USA uniforms as Ralph Lauren’s David Lauren (center, left) made the big reveal. TODAY

The 2014 Sochi Winter Olympics are only two weeks away, and so it’s about time we got a close look at our athletes’ festive wardrobe. They’re 100 percent made in the USA — thanks to Ralph Lauren.

The all-American designer crafted the official Opening Ceremony and Closing Ceremony parade uniforms for the U.S. teams and they’re quite patriotic: The ensembles feature a classic color palette of red, white and navy. The Opening Ceremony look, revealed exclusively on TODAY Thursday, includes a knit patchwork cardigan emblazoned with stars ($598), paired with a cream cotton turtleneck sweater ($245), slim-fitting white fleece athletic pants bearing the “Team USA” label ($165), black leather boots with bright red laces ($395) and a cotton belt accented with American graphics ($75). Of course, there’s also a reindeer hat ($95).

The official Opening Ceremony uniform, designed by Ralph Lauren, is modeled by Olympic professional ice hockey player Zach Parise. Ralph Lauren

Olympic ice hockey player Julie Chu models the Opening Ceremony uniform, which was made in America. Ralph Lauren

The full look was modeled on TODAY Thursday by the Olympic athletes themselves — American curlers Jessica Schultz, 29, and Jared Zezel, 22, both from Minnesota — as well as the TODAY anchors, who joined Ralph Lauren’s David Lauren for the big reveal.

While the prices might seem a bit steep, it should be noted that 100 percent of the proceeds of the Limited Edition Team USA Opening Ceremony Cardigan will be donated to the U.S. Olympic Committee, an organization supporting our nation’s best athletes.

You’ll also be supporting our domestic manufacturers: Ralph Lauren looked to his home country for sources, which means the wool hails from Oregon, was spun in Pennsylvania, then yarned in North Carolina, before being knitted in California by the husband-and-wife team Ball of Cotton.

The emphasis on having the uniforms manufactured domestically came in the wake of controversy over the Team USA outfits from the London 2012 Olympic Games. Ralph Lauren was heavily criticized for having manufactured the clothing in China. The U.S. Olympic Committee announced that while it was too late to change the outfits ahead of the London Games, it had agreed with Ralph Lauren to make apparel for the 2014 Olympic Winter Games domestically.

This partnership marks the fourth time Ralph Lauren has been an official outfitter of the U.S. Olympic & Paralympic teams. Last fall, the brand revealed the Team USA’s Sochi 2014 uniforms, including wool peacoats adorned with a red banner stripe and patriotic patch, fair isle sweaters, and wool turtlenecks with reindeer and snowflake motifs.

U.S. Olympians celebrated the start of the 100-day countdown to Sochi by showing off apparel made in America. TODAY

Figure skater Evan Lysacek and ice hockey player Julie Chu showed off Ralph Lauren’s U.S. Closing Ceremony parade uniforms for Sochi on Oct. 29, 2013. TODAY

In addition, Ralph Lauren designed a unique collection of village wear apparel and accessories for the teams. The village collection includes a mesh polo, a half-zip mockneck pullover, a long-sleeved Team USA T-shirt, and a full-zip fleece sweatshirt.

The U.S. apparel is available online on the Ralph Lauren site and the Team USA site, as well as in select Ralph Lauren retail stores and department stores.

SOURCE: TODAY

President Obama’s 2014 State of the Union Address

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On Tuesday, January 28 at 9pm ET, President Obama will deliver his fifth State of the Union Address.

This year there will be more ways than ever to take part in the State of the Union, including a new way to watch the speech and share exclusive graphics with your social networks, and opportunities to discuss President Obama’s remarks with White House officials immediately following the address.

If you plan on watching from home, we will be streaming an enhanced version of the speech on WhiteHouse.gov/SOTU that features graphics, data and charts that help explain policies and the issues. You can also tune in live on Facebook, YouTube, Google+ and through our mobile apps

In the mean time, here’s how to stay updated, and learn more about how you can watch, share and discuss the speech.

Get email updates: Sign up and make sure you’re among the first to get exclusive content before and after the speech
Follow us on Twitter: Make sure you’re following @WhiteHouse on Twitter for news and real-time updates before, during and after the address.
WhiteHouse.gov/SOTU: Officially launching early next week, WhiteHouse.gov/SOTU will be your number one resource for all things State of the Union, and the best place to watch the enhanced livestream of President Obama’s address, featuring charts, graphs, data and more to help explain the issues and policies he’s discussing alongside the remarks.

China's Exports Linked To Western U.S. Air Pollution

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Vehicles move slowly through heavy smog in Beijing on Thursday, January 16. China’s manufacturing of exports generates pollution that harms air quality — not only in Asia but also all the way across the Pacific Ocean in the Western United States, according to a new study.

(CNN) — Pollution doesn’t respect national borders.

Outsourcing manufacturing to China may have resulted in less pollution in some parts of the United States, but other regions have lesser air quality because of U.S.-bound Chinese products, a new study in the journal Proceedings of the National Academy of Sciences finds.

“Pollution from China is having an effect in the U.S., and we need to recognize how that is affecting both our background ozone levels and also particulates that are reaching the West Coast,” said study co-author Don Wuebbles, professor of atmospheric science at the University of Illinois at Urbana-Champaign.

In the western United States, Chinese pollution related to exports contribute up to 12% to 24% of daily sulfate concentrations, the study said.

Because of the United States outsourcing manufacturing to China, the eastern United States saw a decrease in sulfate pollution, but an increase was seen in the western part of the nation.

Because of pollution from China, the Los Angeles area and other U.S. regions violate national ozone standards one extra day per year, the study said.

U.S. consumer goods such as cellphones and televisions are often produced in China. Although Chinese manufacturing isn’t causing most of the U.S. pollution, winds called “westerlies” can send chemicals across the Pacific Ocean in a matter of days. Valleys and basins in western states can see accumulations of dust, ozone and carbon.

“We know that the efficiency of industry in China is not as it is good in the U.S.,” Wuebbles said. Higher efficiency of U.S. manufacturing, combined with controls on emissions and outsourcing, have made strides in reducing U.S.-based emissions.

Does that mean that outsourcing manufacturing to China is bad for American public health? The study suggests that for the United States as a whole, there’s a net benefit, because the population density in the eastern United States is higher than in the West.

But the West still suffers.

Sulfate concentrations went up by up to 2%, and ozone and carbon monoxide levels saw slight increases too, in the western United States in 2006, according to the study.

Average sulfate, carbon monoxide and black carbon concentrations went down by 0.3% to 0.9% when looking at population-weighted averages. But this all comes at a cost: In the western United States and populous Chinese regions, air quality went down.

Black carbon has been linked to asthma as well as diseases such as cancer, emphysema, and heart and lung disease. Rain doesn’t easily clear it from the atmosphere, so it hangs around and travels far.

Researchers found that 36% of anthropogenic sulfur dioxide, 27% of nitrogen oxides, 22% of carbon monoxide and 17% of black carbon from Chinese emissions were linked to producing goods for export.

About 21% of export-related emissions from China, for each of these pollutants, came from exports that went from China to the United States.

Production of goods for export has rapidly expanded in China, with volume growing 390% between 2000 and 2007, although there has not been as much growth since the global financial crisis. China has generally become a “large net exporter of energy-intensive industrial products,” the study said.

Behind this economic growth is a rise in combustion of fossil fuels, particularly coal, a big culprit in carbon dioxide emissions rising worldwide.

Previous research has shown the substantial carbon dioxide emissions that result from Chinese trade, but this study focused on more other air pollutants. Researchers constructed a model using data on economics and emissions.

Over the last decade, China has seen a huge increase in the use of coal-burning power plants, Wuebbles said. Coal use for generating electricity is a big part of why carbon dioxide emissions have nearly doubled their rate of growth worldwide, according to a leaked report from the United Nations Intergovernmental Panel on Climate Change, obtained by CNN.

High carbon dioxide atmospheric concentrations are projected to cause a 2 degrees Celsius (3.6 degrees Fahrenheit) increase in temperature by 2100. Agriculture, forestry, ecosystems and human health are all expected to suffer as a result of trends in climate change.

To decrease pollution from China, Wuebbles recommended increasing the efficiency of manufacturing processes and re-examining energy production. Scrubbers can reduce emissions from coal-burning power plants.

“Consideration of international cooperation to reduce trans-boundary transport of air pollution must confront the question of who is responsible for emissions in one country during production of goods to support consumption in another,” study authors wrote.

SOURCE: CNN

US Consumers To Blame For Some Air Pollution From China

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The downtown Los Angeles skyline on December 14, 2011 (AFP Photo/Frederic J. Brown)

Washington (AFP) – Air pollution from China blows across the Pacific Ocean and ends up over the US west coast — and American consumerism is to blame for a portion of it, said a study Monday.

On some days, nearly a quarter of the pollutants in the air over California, Oregon, Washington and Portland were initially spewed into the air in China, during the making of televisions, toys, cellphones and other products for export.

“We’ve outsourced our manufacturing and much of our pollution, but some of it is blowing back across the Pacific to haunt us,” said co-author Steve Davis, a scientist at the University of California, Irvine.

“Given the complaints about how Chinese pollution is corrupting other countries’ air, this paper shows that there may be plenty of blame to go around,” he added.

The research was led by Jintai Lin of Beijing’s Peking University, along with co-authors from the United States and Britain.

The study found that 22 percent of carbon monoxide and 17 percent of black carbon emitted in China were associated with the production of goods for export.

Black carbon is a concern because it lingers in the atmosphere, doesn’t wash away with rain and can travel long distances. Exposure can raise the risk of cancer, heart and lung disease and asthma.

The study also examined sulfur dioxide and nitrogen oxide.

“For each of these pollutants, about 21 percent of export-related Chinese emissions were attributed to China-to-US export,” said the study, which appears in the Proceedings of the National Academy of Sciences.

SOURCE: Yahoo News

Made in China for us: Air pollution tied to exports

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Study finds blowback causes extra day per year of ozone smog in LA.

Chinese air pollution blowing across the Pacific Ocean is often caused by the manufacturing of goods for export to the U.S. and Europe, according to findings by UC Irvine and other researchers published today in the Proceedings of the National Academy of Sciences.

The study is the first to quantify how much pollution reaching the American West Coast is from the production in China of cellphones, televisions and other consumer items imported here and elsewhere.

“We’ve outsourced our manufacturing and much of our pollution, but some of it is blowing back across the Pacific to haunt us,” said UC Irvine Earth system scientist Steve Davis, a co-author. “Given the complaints about how Chinese pollution is corrupting other countries’ air, this paper shows that there may be plenty of blame to go around.”

Los Angeles, for instance, experiences at least one extra day a year of smog that exceeds federal ozone limits because of nitrogen oxides and carbon monoxide emitted by Chinese factories making goods for export, the analysis found. On other days, as much as a quarter of the sulfate pollution on the U.S. West Coast is tied to Chinese exports. All the contaminants tracked in the study are key ingredients in unhealthy smog and soot.

China is not responsible for the lion’s share of pollution in the U.S. Cars, trucks and refineries pump out far more. But powerful global winds known as “westerlies” can push airborne chemicals across the ocean in days, particularly during the spring, causing dangerous spikes in contaminants. Dust, ozone and carbon can accumulate in valleys and basins in California and other Western states.

Black carbon is a particular problem: Rain doesn’t easily wash it out of the atmosphere, so it persists across long distances. Like other air pollutants, it’s been linked to a litany of health problems, from increased asthma to cancer, emphysema, and heart and lung disease.

The study authors suggest the findings could be used to more effectively negotiate clean-air treaties. China’s huge ramp-up of industrial activity in recent years, combined with poor pollution controls, has unleashed often fierce international debates.

“When you buy a product at Wal-Mart,” noted Davis, an assistant professor, “it has to be manufactured somewhere. The product doesn’t contain the pollution, but creating it caused the pollution.”

He and his fellow researchers conclude: “International cooperation to reduce transboundary transport of air pollution must confront the question of who is responsible for emissions in one country during production of goods to support consumption in another.”

###
Jintai Lin of Beijing’s Peking University is the paper’s lead author. Others are Da Pan, also of Peking University; Qiang Zhang, Kebin He and Can Wang of Beijing’s Tsinghua University; David Streets of Argonne National Laboratory; Donald Wuebbles of the University of Illinois at Urbana-Champaign; and Dabo Guan of the University of Leeds in England.

About the University of California, Irvine: Located in coastal Orange County, near a thriving employment hub in one of the nation’s safest cities, UC Irvine was founded in 1965. One of only 62 members of the Association of American Universities, it’s ranked first among U.S. universities under 50 years old by the London-based Times Higher Education. The campus has produced three Nobel laureates and is known for its academic achievement, premier research, innovation and anteater mascot. Led by Chancellor Michael Drake since 2005, UC Irvine has more than 28,000 students and offers 192 degree programs. It’s Orange County’s second-largest employer, contributing $4.3 billion annually to the local economy.

SOURCE: University of California, Irvine

Why it's Time to Unleash Manufacturing Innovation

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It is time to put a tired idea to bed. Not long ago, people were predicting the demise of manufacturing. They said that manufacturing was a relic of the past, that the service sector alone could grow an economy and drive innovation. They could not have been more wrong.

Increasingly, manufacturing is not a sector in need of rescuing. It is the sector doing the rescuing. As a recent WEF report stated, “The manufacturing sector has a fundamental role to play in global economic growth and job creation for emerging economies and developed markets.”

Compared to service businesses, manufacturers are nearly 10 times stronger exporters; their employees contribute twice as much to national productivity as workers in other sectors; and each job inside a manufacturing facility can spur the creation of an additional three to five jobs outside it.

In countries around the world, manufacturing’s multiplier effect has gone to work – creating jobs, boosting productivity, fueling innovation, and balancing economies. In the United States, for example, manufacturing made the largest contribution to GDP growth of any sector in 2012 and has expanded for each of the past seven months. That is how the manufacturing renaissance is driving recovery today – and helping businesses and nations prosper for many tomorrows to come.

Advanced manufacturing is replacing smoke stacks and shuttered factories with high-tech laboratories and state-of-the-art plants. These new, 21st-century models for prototyping and innovating enable the manufacturing industry to generate up to 90 percent of business R&D spending.

Generations ago, companies like Dow created and marketed new products entirely on their own. Products like Saran Wrap and Ziploc Bags went from the lab bench to the factory floor entirely within our company. Today, the breakthroughs we seek – game-changing ideas like self-healing materials and self-driving cars – are so complex that they will never materialize if we all stay within the boundaries of our sectors or our companies.

Innovation does not – and cannot – happen in silos anymore. The best products and industries of tomorrow will be born at what I call “the intersections.”

That is why, more and more, we need to work to form partnerships to unlock progress. We need collaboration among the brightest minds in business, science, and engineering. In the same spirit, we need active collaboration between the public and private sectors as well.

For businesses to succeed – for economies to grow – governments must create the conditions for innovation ecosystems to develop and flourish. This requires renewed focus in three key areas.

First, human capital. Machines may do the heavy lifting on factory floors, but it is human beings – specifically, scientists, engineers, and other highly skilled professionals – who turn advanced manufacturing clusters into centers of innovation. Governments must do more to educate young people, whether in universities or through skills training at community colleges, and to retrain experienced workers – particularly in science, technology, engineering, and mathematics.

Second, the business climate. In countries like the United States, a complex environment of regulations and tax provisions determines if and where companies scale up and invest. Too often, these regulations add costs and, worse, uncertainty to these calculations.Forward-thinking countries are seeding the ground for manufacturing growth by shifting to smarter regulation. Through competitive tax rates, streamlined permitting processes and other reforms, these countries enable government to operate at the speed of business, increasing predictability for companies that are looking to invest.

Third, a smart, balanced energy policy. Manufacturers gravitate toward regions where energy is affordable and accessible – not merely because we consume energy, but also because we create so much more with it. We use natural gas, for example,as a feedstock – as the building block that transforms our innovations from ideas into reality.

More than 95 percent of the world’s synthetic materials would not be possible without our industry: from pharmaceuticals to smartphones to lighter, more efficient vehicles. When natural gas is used in the manufacturing process instead of burned or exported, it generates eight times more value across the economy.

In this way, advanced manufacturing expands economies when they are healthy and helps them recover when they are not. It creates competitiveness in a way no other sector can – encouraging countries to invest in their work forces, laying the groundwork for further innovation, and making far better use of natural resources.

But again, this virtuous cycle cannot set itself in motion. If we create an ecosystem in which innovators can work together – at the intersections between business, government, academia, and civil society – then the current manufacturing renaissance can become a revolution. Far from the so-called demise of manufacturing, we will instead see the rise of a new era of investment, innovation, job creation, and prosperity that will improve lives around the world.

Andrew Liveris is Chairman and CEO of Dow.

SOURCE: CNBC

Original article can be read here: http://www.cnbc.com/id/101349128

Why House Democrats Might Kill Obama's Big Trade Deal

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January 11, 2014
WASHINGTON — President Barack Obama’s international trade agenda is dead in the water if he doesn’t do a better job engaging with Democrats in Congress, and his administration appears to be getting that message, Democrats said Friday.

Congressional Democrats have often been frustrated by his lack of attention to their concerns, but they’ve been especially disturbed lately that in his grand pivot to Asia and push for a 12-nation trade pact dubbed the Trans-Pacific Partnership, they and the rest of Congress largely have been cut out of negotiations.

“We want transparency. We want to see what’s going on there,” House Minority Leader Nancy Pelosi (D-Calif.) told reporters. “We have a problem with that.”

As a result, many Democrats fear the actual terms of the deal do not reflect traditional Democratic Party policy priorities.

“This is a big problem now,” said Rep. Chris Van Hollen (D-Md.), the top Democrat on the House Budget Committee. “There is inadequate engagement on the substance of what will be in an agreement or out of an agreement.”

Democrats in the House and Senate have complained for years about the secrecy standards the Obama administration has applied to the TPP, forcing members to jump over hurdles to see negotiation texts, and blocking staffer involvement. In 2012, Sen. Ron Wyden (D-Ore.) complained that corporate lobbyists were given easy access while his office was being stymied, and even introduced protest legislation requiring more congressional input.

The issue came to a head Thursday in two ways. In one case, Obama’s new nominee for China ambassador, Sen. Max Baucus (D-Mont.), angered his party by introducing fast-track trade legislation backed by the White House. The bill would ease the passage of the TPP and is co-sponsored by Sen. Orrin Hatch (R-Utah) and House Ways and Means Committee Chairman Dave Camp (R-Mich.). But most Democrats oppose the bill, and ultimately, Baucus and the administration introduced the legislation without a House Democratic co-sponsor — a public embarrassment that prompted House Speaker John Boehner (R-Ohio) to declare Obama needs to get his act together on trade policy.

Also Thursday, U.S. Trade Representative Michael Froman met with Democratic members of the Ways and Means Committee, and got an earful, lawmakers told HuffPost.

“We had a very frank discussion,” said Rep. Sander Levin of Michigan, the top Democrat on the committee.

“They’ve said that they welcome congressional input,” said Van Hollen, who also attended the meeting. “But in terms of actually establishing the mechanisms, they haven’t put forward a proposal. But we should be putting those proposals on the table. Any administration is going to try and maintain maximum flexibility. It’s up to the Congress to insist that we have an important role in the process.”

Democrats are especially determined to win a role in negotiations because the bill introduced by Baucus, the departing chairman of the Senate Finance Committee, would grant the administration the ability to present Congress with trade deals that could not be amended, leaving lawmakers to take it or leave it, including on the TPP, which is opposed by many progressive groups and some tea party activists.

With opposition from the right, the administration needs to shore up support from Democrats to move the trade agenda ahead. And the Baucus bill didn’t help. Even Democrats like Oregon Rep. Earl Blumenauer, who are more open to free-trade deals with the right protections, think Baucus’ effort does little to improve the last fast-track bill Congress passed in 2002.

“I think it’s a mistake. I think it’s going to make it very hard to pass, and frankly, I don’t think it should,” said Blumenauer. “I’m a little disappointed that something’s dropped [introduced] that was never discussed with Democrats in the House. As I understand it, it wasn’t actually discussed with Democrats in the Senate.”

“It’s interesting Baucus introduced his bill without any — I think a couple senators endorsed it — but without any other Democratic senator on it,” Levin said.

“And most of them hadn’t seen his bill when he introduced it, including the new chairman,” he said, referring to Wyden, who is replacing Baucus at the head of the Finance Committee.

There’s a lot at stake for Democrats and the president in working out their rough spots. If they don’t, Obama’s trade agenda stalls. And for Democrats, giving the White House too much authority could undercut the centerpiece of the 2014 election argument — that they are the party that will deal with income inequality and help the middle class. That’s because many in their own party, especially grassroots activists and unions, blame flaws in previous grand trade deals like the North American Free Trade Agreement for siphoning off middle class jobs.

“We have had a trade deficit that has exceeded $350 billion every single year for the past 13 years. We have this enormous staggering problem with our economy called the continuing trade deficit, and this is a measure that would make that worse,” Rep. Alan Grayson (D-Fla.) said. “The classic example of this is NAFTA. NAFTA has managed to hurt American workers and Mexican workers at the same time.”

And most Democrats don’t think the pending TPP deal addresses numerous labor, environmental and other issues adequately. Like NAFTA, the TPP would empower foreign corporations to directly challenge the laws and regulations of a country before an international tribunal. Under other trade frameworks, like the World Trade Organization treaties, only nations themselves are permitted to bring trade cases before an international arbiter, meaning companies must first win support from a government before attacking a law. Exxon Mobil, Dow Chemical, Eli Lilly and other corporations have used NAFTA to attempt to overturn Canadian regulations regarding offshore oil drilling, fracking, pesticides, drug patents and other issues.

Progressives like Grayson have long been critical of free trade deals because of their empowerment of corporations. But even members of the House Democratic leadership who have traditionally supported such pacts are upset over the current deal and worried about its impact on their 2014 message.

“No one should believe that negotiations on TPP are over, because almost — again — all the key issues remain,” said Levin.

“Congress must have a robust role in the oversight of any trade deal,” said Rep. Steve Israel (D-N.Y.) chairman of the Democratic Congressional Campaign Committee. “I will continue working with my colleagues to ensure any trade deal reflects 21st century realities, protects the American worker and is only agreed to after adequate and necessary consultation with Congress.”

Still, boosting trade does fit into the Democrats’ agenda if it helps boost exports and create new jobs in America.

“We need to deal with trade. I don’t think there’s a member of Congress who isn’t pro-trade, but it’s got to be pro-American worker, pro-American consumer, pro-American business,” sai
d R
ep. Xavier Becerra (D-Calif.). “Otherwise, why are we opening up our markets to people if we’re going to get raped?”

Becerra and others acknowledge there is a great deal of pressure, in general, to take steps that promise economic growth with the economy still limping along and producing too few jobs. Crafting a trade deal that pleases their base, however, won’t come easily, and almost certainly not before the election, especially if the Obama administration offers Democrats little more than token input.

“This place doesn’t work on amorphous pressure. It works on touch-and-feel pressure. Unless we can come together on something that collectively, bipartisanly, we think can work, I think it’s going to be tough,” said Becerra. “It won’t be fast. It might be on a track, but it won’t be fast.”

SOURCE: Huffington Post

Original article can be read here: http://www.huffingtonpost.com/2014/01/11/fast-track-trade-democrats_n_4580720.html

House Democrats Balk At Efforts By Obama, Boehner On Controversial Pacific Trade Deal

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January 9, 2014
WASHINGTON — House Democrats balked Thursday at a bill designed to clear congressional hurdles for President Barack Obama’s controversial Trans-Pacific Partnership trade pact. By refusing to put forward a co-sponsor for the legislation, House Democrats have significantly hampered the prospects for the bill’s passage.

The legislation, introduced Thursday, would prevent members of Congress from offering amendments to a still-unfinished deal between 12 Pacific nations, and would instead force an up-or-down vote on whatever deal the Obama administration eventually reaches.

The pending trade deal is supported by corporate interest groups, including the U.S. Chamber of Commerce, while organized labor and traditionally liberal public interest groups have consistently voiced concerns over the TPP’s potential to undermine important environmental, public health and labor standards.

Late last year, 151 House Democrats signed a letter opposing the so-called fast track scheme, also known as trade promotion authority. Several House Republicans oppose fast track on the grounds that it excessively empowers the executive branch, but many others, including Speaker John Boehner (R-Ohio), support the proposal.

“Obama wants to pass it; Democrats in the House want to oppose it,” said one House Democratic aide, who was granted anonymity due to the sensitivity of the Democratic position. “Republicans are split ideologically, and want to know why they should take one for Obama.”

Nevertheless, Boehner said at a Thursday press conference that he cannot pass the bill without Democratic help.

“I’ve made clear to the president that this can’t pass unless there is bipartisan support for it,” Boehner said. “And this goes back months, and yet we’ve seen scant attention to this issue by the administration in terms of encouraging Democrat leaders and Democrat members to stand up and vote for it.”

The Obama administration did attempt to drum up Democratic support, according to sources familiar with the effort, particularly with an aggressive effort to win over Rep. Ron Kind (D-Wis.). Kind is co-chair of the New Democrat Coalition, a group traditionally sympathetic to corporate interests, but he also is frequently mentioned as a potential gubernatorial or senatorial candidate in his home state of Wisconsin, where labor unions wield significant political clout. Neither Kind nor any other House Democrat agreed to co-sponsor the fast track bill, which was introduced by Sens. Max Baucus (D-Mont.) and Orrin Hatch (R-Utah) in the Senate.

Kind’s office said that there had been discussions with the administration, but no formal request that he sponsor the bill.

The New Democrat Coalition, meanwhile, issued a statement, endorsed by Kind, on the fast track legislation, saying, “We are encouraged by the introduction of a bipartisan, bicameral bill to spur action on Trade Promotion Authority. We look forward to working with our colleagues in considering this bill … Trade Promotion Authority will help the Administration conclude important agreements that will open markets and create jobs.”

Many House Democrats are flatly opposed to the TPP and efforts to ease its passage. House Democrats are often more responsive to liberal interest groups than their Senate counterparts, and many members — including some in the Democratic Party leadership — believe that opposing TPP is good for electoral politics in 2014. While supporters of the deal argue it will increase economic growth, similar recent trade deals have undercut some U.S. industries and weakened global labor protections.

“The president has failed to find someone who is willing to introduce the bill. He’s got over 200 members to cultivate from, some of whom would like to have his support in the next election. But Democratic members are extremely skeptical of this,” Rep. Alan Grayson (D-Fla.) told HuffPost.

“We’ve tried free trade, and not only has free trade not improved the U.S. economy, it’s gutted manufacturing and driven down our labor standards,” he added, citing NAFTA as a prime example.

“We expect to have a robust conversation on the Hill about how trade agreements should be negotiated and the role of Congress in that process,” U.S. Trade Representative Michael Froman told HuffPost. “We’re eager to engage directly with members of the Finance and Ways and Means Committees and with all of Congress to pass Trade Promotion Authority legislation that has broad, bipartisan support.”

The precise terms of the deal remain secret from the public, and the dozen countries involved in the talks have yet to reach a formal agreement. The Obama administration has categorized the negotiation text as a classified document. Congressional staffers have complained about being denied access to the U.S. position.

This fall, WikiLeaks unveiled a draft of the deal’s intellectual property chapter, prompting outcries from global health experts and Internet freedom groups, which warned that the language on patents, copyrights and other intellectual property could increase the cost of medicine and curb free speech on the web.

Progressive groups came out strongly against the trade promotion authority, suggesting that approving it and the underlying trade deal would undercut efforts to curtail income inequality.

“The Trans-Pacific Partnership would be an unmitigated disaster for everything from the environment to Internet freedom and working families,” said Charles Chamberlain, the executive director of Democracy For America, a grassroots progressive organization, which intends to make trade an election-year issue.

“Members of Congress must be able to work to ensure that any proposed trade agreement is a fair deal for all Americans, not just the rich and powerful,” Chamberlain added in a statement. “Let’s be clear: A vote for fast track authority on the TPP is a vote for a deal that will hurt hardworking Americans and haunt every single member of Congress, Republican or Democrat, who votes for it.”

This article has been updated with a statement from the New Democrat Coalition.

SOURCE: Huffington Post

Original article can be read here: http://www.huffingtonpost.com/2014/01/09/trans-pacific-partnership-obama-boehner_n_4570837.html

WikiLeaks Reveals Secret Obama Deal – #TPP

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November 13, 2013
WASHINGTON — WikiLeaks on Wednesday published a critical chapter of an international trade deal the United States is currently negotiating with 11 Pacific nations.

The document confirms what some public health experts and Internet freedom advocates had long feared: The Obama administration is aggressively pursuing terms that would increase the cost of medicines and hamper an open Internet.

“The U.S. is refusing to back down from dangerous provisions that will impede timely access to affordable medicines,” said Judit Rius Sanjuan, U.S. manager of the Access Campaign at Doctors Without Borders, a humanitarian group that won the Nobel Peace Prize in 2000.

Most major provisions of the Trans-Pacific Partnership document, which is dated at Aug. 30, are nearly identical to previous leaks that drew criticism from tech activists and consumer groups. But the public disclosure of which countries support or object to which terms, is new. The U.S. government considers the draft text to be classified, a status which has stymied access for congressional aides, and prevented some lawmakers from airing their complaints.

“The Obama administration’s proposals are the worst –- the most damaging for health we have seen in a U.S. trade agreement to date,” said Peter Maybarduk, director of Public Citizen’s global access to medicines program.

Countries that violate the terms of trade agreements can be sued in international courts.

The TPP deal would explicitly empower corporations to directly challenge government laws and regulations, a political power that World Trade Organization treaties have reserved for other sovereign nations. The U.S. has endorsed such corporate political powers in previous trade agreements, including the North American Free Trade Agreement. Companies including Exxon Mobil, Dow Chemical and Eli Lilly have attempted to invoke NAFTA to overrule Canadian regulations on offshore oil drilling, fracking, pesticides, drug patents and other issues.

“With both copyright and patent, the really alarming thing is, there’s talk about major systemic changes that could be made in the next couple of years,” said Parker Higgins, spokesman for the internet freedom group Electronic Frontier Foundation. “The last thing we want to do is crystallize current U.S. law in a trade agreement that we would have to renegotiate.”

The administration, however, rejected criticism that it is pursuing an unhealthy deal.

“We are working with Congress, stakeholders, and our TPP negotiating partners to reach an outcome that promotes high-paying jobs in innovative American industries and reflects our values, including by seeking strong and balanced copyright protections, as well as advancing access to medicines while incentivizing the development of new, lifesaving drugs,” said Carol Guthrie, a spokeswoman for the Office of the U.S. Trade Representative.

The leaked document shows U.S. negotiators pursuing a host of policies that could drive up medical costs by extending drug companies’ and other corporations’ monopolies on their products beyond the normal 20-year patent term. These provisions include standards to lengthen patent terms, expand the criteria for which countries must grant drug patents, require countries to issue new patents on minor alterations to a drug, and establish barriers on the use of pharmaceutical test data, all of which prevent market competition from generic drugs.

A coalition of five nations consistently offered alternatives to the U.S. language, including New Zealand, Singapore, Canada, Chile and Malaysia. The only language mitigating this effort to drive up drug prices is a vague exemption for HIV, tuberculosis and malaria drugs.

“The obligations of this Chapter do not and should not prevent a Party from taking measures to protect public health by promoting access to medicines for all, in particular concerning cases such as HIV/AIDS, tuberculosis, malaria, [US oppose: chagas] and other epidemics as well as circumstances of extreme urgency or national emergency,” the document reads.

Prior WTO agreements have included similar protections, but the U.S. has repeatedly brought political pressure against countries that attempted to grant access to generic AIDS drugs. The U.S. has had several recent disputes with India over the country’s decision to issue a $157 generic cancer drug for which Bayer had charged more than $5,000 a month.

“People die from cancer, too,” notes Sanjuan. “The public health challenges we see in the countries where we work are much broader than HIV, TB and malaria. Even if this is a sincere effort at a solution, it’s a fake solution and won’t really work.”

The draft’s copyright standards would require countries to adopt digital distribution rules similar to those the United States has had in place since the late 1990s. Those rules have come under fire for establishing a host of legal liabilities for normal internet functions. The rules have made tech start-ups targets of costs and legal threats from movie studios and record labels, and created conflicts over simple actions like linking to copyrighted content.

The U.S. has avoided some of the most damaging implications of its broad copyright definitions by relying on a robust set of exemptions, including fair use and other terms that permit using some copyrighted information without paying royalties. But the TPP draft would establish a narrow international standard for fair use, and thwart other types of exemptions. EFF and others have warned against exporting the U.S. copyright criteria without including U.S.-style exemptions.

WikiLeaks, the government transparency organization, released the document on the same day that 151 congressional Democrats sent a letter to President Barack Obama objecting to the “fast-track” process the president hopes to use to approve the TPP deal. Two separate letters from dozens of House Democrats and Republicans objecting to the same process were sent to Obama on Tuesday.

SOURCE: Huffington Post

Original article can be read here: http://www.huffingtonpost.com/2013/11/13/wikileaks-global-health_n_4269337.html

#TPP Talks Stir House Bipartisan Opposition

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November 12, 2013
WASHINGTON — Separate groups of House Republicans and Democrats on Tuesday condemned the Obama administration’s proposed sweeping free trade agreement with 11 Pacific nations, known as the Trans-Pacific Partnership.

Strongly worded letters to President Barack Obama Tuesday were signed by hardline tea partiers, true-blue progressives, and moderate, corporate-friendly lawmakers in both parties, indicating political trouble for a trade deal the administration had hoped to seal by year end.

Critics of the Trans-Pacific deal have warned that it would undermine Internet freedom and consumer protections in the U.S. and abroad. But the letters take issue with the process for approving the deal, demanding greater congressional input, rather than singling out specific policy complaints. Because of their broad scope, trade deals often draw a variety of critics, who can choose to fight the deals on procedural grounds, rather than attempting to unite behind disparate policy issues. On some issues, however, a lack of congressional oversight can generate opposition, even from supporters of the Obama administration’s policy proposals.

“Under Fast Track, the executive branch is empowered to sign trade agreements before Congress has an opportunity to vote on them, and then unilaterally write legislation making the pacts’ terms U.S. federal law,” reads a letter from 22 House Republicans. “Fast Track allows the president to send these executive branch-authored bills directly to the floor for a vote under rules forbidding all floor amendments and limiting debate. … We do not agree to cede our constitutional authority to the executive.”

The GOP letter includes signatures from tea party stalwarts like Rep. Michele Bachmann (R-Minn.), along with moderate members whose tenure in Congress dates to the 1990s. A coalition of New Democrats and progressives — who typically take opposite positions on free-trade deals — pressed the same theme in a separate letter.

“Any new proposed Trade Promotion Authority must reflect the changing nature of international trade and ensure that Congress plays a more meaningful role in the negotiating process,” reads a letter from 12 Democrats, including progressives like Reps. John Lewis (D-Ga.) and Jim McDermott (D-Wash.), along with moderates Reps. Allyson Schwartz (D-Pa.) and Jim Himes (D-Conn.).

The letters come the day before liberal Democrats plan to voice concerns with the trade pact process in a press conference.

The proposed terms of the Trans-Pacific Partnership deal are secret. The Obama administration, like many of its predecessors, has registered the trade platform as classified information, to the chagrin of lawmakers. Although several dozen corporate officials and a handful of public interest experts are given access to the negotiation information, they are not permitted to disclose it to the public or the press. Staffers for members of Congress also are denied access to the terms.

From leaked drafts, terms of the Trans-Pacific deal have come under fire for proposing to grant corporations the political power to directly challenge government regulations in international court. This sovereignty issue has long been a sticking point for both conservatives and progressive members of Congress, as the right to challenge government rules had been restricted to sovereign nations under World Trade Organization pacts and other deals.

But the U.S. government has pushed to include such language in trade agreements dating back to the 1993 North American Free Trade Agreement. In recent years,Exxon Mobil, Dow Chemical, Eli Lilly and others have attempted to challenge Canadian rules on offshore oil drilling, fracking, pesticides and drug patents through NAFTA’s corporate-empowered litigation system. Proponents of generic medications have also voiced concerns that the Trans-Pacific Partnership would undermine access to affordable, life-saving drugs.

American labor unions have complained that these systems encourage corporations to move jobs to locations with weak regulatory oversight.

Proponents of free trade deals defend the Trans-Pacific Partnership as an effort to reduce unnecessary rules and tariffs that interfere with productive commerce.

Consumer protection advocates, environmentalists and public health experts, have voiced opposition to leaked terms of the pact, which includes the U.S., Australia, Peru, Malaysia, Vietnam, New Zealand, Chile, Singapore, Brunei, Canada, Mexico and Japan. Several of these countries already have free trade agreements with the U.S. that have eliminated most tariffs. That suggests much of the deal’s appeal is tied to regulatory standards.

SOURCE: Huffington Post

Original article can be read here: http://www.huffingtonpost.com/2013/11/12/trans-pacific-partnership-house_n_4263174.html

Tracking The ‘Manufacturing Jobs For America’ Campaign

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In late 2013, U.S. Senator Chris Coons (D-Del.) announced the creation of the “Manufacturing Jobs for America” initiative, which aims to “train Washington’s focus on manufacturing jobs.”

The initiative, with 22 backers in the Senate, all Democrats, wants to bring new legislation to Congress and the President that will help American manufacturers grow and hire new employees, while also assisting in training a workforce capable of working those jobs. The 40 bills already associated with the initiative focus on four “organizing principles”:

Strengthening America’s 21st century workforce
Opening markets abroad
Creating the conditions necessary for growth
Expanding access to capital

In a statement, Senator Coons said: “Washington needs to refocus on manufacturing jobs, which pay better and contribute more to our economy than new jobs in other sectors. This campaign is designed to help manufacturing-jobs legislation that can make a real difference in our communities earn the bipartisan support needed to become law. There are too many Americans still looking for work for Congress to continue to waste time lurching from crisis to crisis. Manufacturing can power our economic recovery, but Congress needs to do its part to see that potential realized.”

When it comes to Congressional initiatives, this one seems fairly strong. It has support from some of the biggest industry organizations, including the National Association of Manufacturers, the National Tool & Machining Association, the National Skills Council and the Association for Manufacturing Technology. Big industrial players are also showing their support — Dow, DuPont, Ford, General Electric and others are mentioned on the initiative’s site. Even unions are onboard, with the AFL-CIO, United Autoworkers and United Steelworkers showing support.

With all these important organizations, companies and unions involved, this initiative should be able to implement its suggested chances fairly easily, one would assume. But amid a time marked by congressional derision, it seems difficult — if not impossible — to pull off all the legislative changes listed on the initiative’s site.

Manufacturing jobs through legislation

Of those legislative proposals, some are more far-reaching than others. Let’s break them down a bit according to the four principles outlined by the initiative. For the time being, we’re going to focus solely on the bills that have been introduced into Congress, which represents only a portion of what the initiative aims to implement.

Workforce/skills training

These bills are meant to strengthen the American workforce, or make it easier for people to attend the kinds of schools that offer the kind of education they’ll need in future markets. The aim is that by encouraging more people to get technical- or engineering-based educations, they’ll be well-suited to work in the kind of high-tech manufacturing that every politician wants located in their district.

The Adult Education and Economic Growth Act (S. 1400), which is still in the committee stage, aims to make more investments in adult education, require better coordination between state workforce development agencies and educational facilities and make more money available to teach new Americans more English skills. The America Works Act (S. 453) aims to reduce the “skills gap” by giving more priority to programs that offer portable, industry-recognized credentials, particularly in skills that have relevance to the local job market.

Sen. Al Franken’s Community College to Career Fund (S. 1269) would amend the Workforce Development Act of 1998 to establish an $8 billion fund that would offer grants to a variety of institutions based on the need to better facilitate the transition from educational training to a new career in the workforce.

The BUILD Career and Technical Education Act of 2013 (S. 1293) proposes two-year grants for local educational agencies to improve education and career programs focused on middle and high school students, while the Women and Minorities in STEM Booster Act of 2013 (S. 288) aims to establish a National Science Foundation grant program to promote women and minorities pursuing jobs in STEM-based industries.

Exports

The initiative wants to make exporting products to other countries fairer and more economically viable, which means easing regulatory restrictions and combating currency manipulation. The Currency Exchange Rate Oversight Reform Act (S. 1114) aims to do exactly that, by directing the Secretary of the Treasury to analyze market developments on a biannual basis, review the monetary policies of major trading parties and then report on countries that are “misaligned.” This would also allow the Secretary to combat these manipulations via numerous means.

This is one of the bills that seems most likely to actually work its way through Congress — no one likes a currency manipulator, and the groundwork, in terms of keeping the industry apprised of who is doing the manipulation, has already been laid. This bill is also one of the few within the initiative’s realm that has bipartisan support via five Republican and two Independent co-sponsors, along with the 11 democrats.

The Small Business Export Growth Act (S. 1179) aims to improve the coordination between export promotion programs — in theory, this would help smaller businesses more easily find ways to bring their products to a global marketplace. In addition, it would create a new interagency task force focused on small business export financing.

Access to capital

Many manufacturers know all-too-well the difficulty in securing financing for equipment investments or expansions, particularly in the years right after the Great Recession. A major component of Coons’ initiative is to introduce legislation that will not only make financing easier to acquire, but also give more options to companies who “insource” or “re-shore” assets to the U.S.

The Manufacturing Reinvestment Account Act (S. 1651) would help manufacturers establish a manufacturing reinvestment account (MRA) in a community bank — up to $500,000 pre-tax dollars a year. These funds would be effectively taxed at a low 15 percent rate and would be used to purchase equipment or for job training.

One that might be appealing to energy-conscious manufacturers is the Job Creation through Energy Efficient Manufacturing Act (S. 1501), which would authorize $250 million in funding to a Financing Energy Efficient Manufacturing Program at the U.S. Department of Energy. Manufacturers interested in new or expanded industrial energy efficiency programs could receive financing via low-cost loans to help cover the up-front costs of these projects.

A bill with a higher share of bipartisan support is the Startup Innovation Credit Act (S. 193), which would allow new manufacturers claim their R&D tax credit against their employment taxes, which creates the cash flow necessary to grow. Right now, these young companies are shut out of
th
e credits, even though they create the most jobs. This bill has been referred to the Senate Finance Committee, but given the overall support for startups in recent years due to Silicon Valley, for one, it seems like a good bet for eventual passage.

Enabling growth

Many agree that adopting a singular manufacturing policy, at the federal level, is a useful place to begin notable change in the way its lawmakers make the environment more suited to growth. The Rebuild American Manufacturing Act (S. 544) would force the President to establish a national manufacturing strategy every two years and submit it to Congress.

And while that might be a good start, the initiative has some other ideas as well, and this is the section where some of the most forward-thinking proposals have ended up. The American Jobs Matter Act (S. 1246) would require the Department of Defense to measure domestic employment as factor in rewarding a defense contract. This would, in theory, allow American manufacturers to leverage in bids their commitment to the U.S. economy by showcasing the jobs they’ve already created, along with the jobs to be created if the contract is won. The Senate Armed Services Committee is currently looking at this bill.

Finally, the Made in America Manufacturing Act (S. 63) proposes a program that awards states and regions with funding to support local manufacturers via low-interest loans. These would be used to build new facilities or upgrade equipment. The states/regions could also use the money to assist small manufacturers, for example, in connecting with larger partners, or to establish educational programs that partner businesses with skills providers to prepare people for the types of manufacturing jobs found locally.

Initial thoughts

Many of these legislative changes appear to be steps in the right direction, but there’s a few matter of note. One is that above, we’ve only covered legislation that has actually been introduced — roughly have of the bills Coons’ initiative wants to pass are still being written, which means months, if not years, before they come to any critical votes, much less the President’s signature.

The lack of bipartisanship is troublesome as well. The initial announcement listed only Democratic members of Congress, and they have not added any Republicans or Independents to their ranks. A few of the bills have co-sponsors from the Republican party, and I’ve identified a few of those, but for the most part, there isn’t much bipartisanship in the initiative that is supposed to spur just that. And until the initiative can manage that, I don’t see much success here.

I also know many manufacturers would see some of these bills take a different focus. There is much talk in Congress about deploying new innovation centers, or multi-million dollar efforts to improve worker training, and those are great, but many companies simply want their tax burdens decreased, or various bits of red tape efficiently cut from how they deal with the government. In many cases, these kinds of changes would be more immediately beneficial to manufacturers, and would allow them to expand and hire new people. Many would argue that before we start working on bills that would better enable the workforce to take high-tech manufacturing jobs, we need to make sure those jobs exist and will stick around for the long-haul.

Onward

Our plan is to track this initiative as it progresses through 2014 — what ends up being picked for voting in Congress, what falters, what passes. We’ll also keep tabs on Sen. Coons’ initiative as a whole to see if they end up addressing some of the concerns mentioned above. Be sure to stay tuned to the Manufacturing Jobs for America Initiative page on Manufacturing.net as these developments come to light.

SOURCE: Manufacturing.Net

Manufacturing Jobs for America

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WASHINGTON – U.S. Senator Chris Coons (D-Del.) led a group of 22 U.S. senators Tuesday in the launch of a campaign designed to train Washington’s focus on manufacturing jobs.

The Manufacturing Jobs for Americainitiative aims to build bipartisan support for legislation that will modernize America’s manufacturing sector, help American manufacturers grow and create jobs, and assist American workers in getting the skills to succeed in the next generation of manufacturing jobs. Together, the lawmakers have contributed 40 bills — many with bipartisan support — to the effort around four organizing principles:

Strengthening America’s 21st century workforce
Opening markets abroad
Creating the conditions necessary for growth
Expanding access to capital

“Washington needs to refocus on manufacturing jobs, which pay better and contribute more to our economy than new jobs in other sectors,” Senator Coons said. “This campaign is designed to help manufacturing-jobs legislation that can make a real difference in our communities earn the bipartisan support needed to become law. There are too many Americans still looking for work for Congress to continue to waste time lurching from crisis to crisis. Manufacturing can power our economic recovery, but Congress needs to do its part to see that potential realized.”

“I applaud Senator Coons and his colleagues for their commitment to promoting manufacturing growth in America in an increasingly globalized, competitive and interconnected world economy,” Bloom EnergyFounder & CEO K.R. Sridhar said. “This renewed attention signals to American businesses that the United States is dedicated to competing for – and winning – cutting-edge manufacturing jobs of the 21st century.” Bloom Energy, a fuel cell technology company, recently celebrated the opening of its Newark, Delaware facility, which is slated to hire more than 100 new workers in the coming months.

The senators will work over the next few months to build support from Republicans and Democrats for these bills, and committee and subcommittee chairs have pledged to convene hearings on these issues.

Over time, added emphasis will be placed on bills that garner strong bipartisan support, and additional bills may be added to the effort.

The campaign’s focus on manufacturing reflects the sector’s reputation for providing high-quality jobs that lead to gains throughout the economy. Workers in manufacturing jobs earn 22 percent more in annual pay and benefits than the average worker in other industries, according to the National Association of Manufacturers. Every new manufacturing job created adds another 1.6 jobs to the local service economy, and for every dollar in manufacturing sales, another $1.34 is added to the economy. Investments in manufacturing have a stronger impact than investments in any other economic sector.

“The Manufacturing Jobs for America initiative that supports pro-growth, pro-jobs policies in energy, tax, regulatory and workforce policy and other areas has the potential to provide a critical path towards bipartisan agreement on issues facing manufacturers and their employees,” National Association of Manufacturers President Jay Timmons said. “The manufacturing sector is still struggling to recover from the 2.3 million jobs lost during the difficult recession of 2008 and 2009. While 500,000 jobs have since been created, we still have a long road to travel. A growth agenda, that includes some of the bills that are part of the Manufacturing Jobs for America effort, is key to creating an environment that encourages job creation.”

“The AFL-CIO applauds the Senate Democrats for pulling together this broad legislative package to support domestic manufacturing,” AFL-CIO President Richard Trumka said. “This is an example of the results-oriented approach Congress should be taking to invest in growth and create jobs, rather than engaging in divisive ideological campaigns. We strongly support many of the themes that run through these bills, including action on currency manipulation and evasion of import duties, measures to increase the reshoring of production, more resources for skills and training, improved access to capital, help for start-ups, and domestic content requirements for government purchases. We look forward to working with the Senate to enact much of this legislation. The manufacturing sector in the United States has finally begun to heal, but we must create the conditions for a long-term recovery. A comprehensive approach like this one can move us a long way in that direction.”

In addition to Senator Coons, senators contributing policy to the Manufacturing Jobs for America campaign include Senators Debbie Stabenow (D-Mich.), Sherrod Brown (D-Ohio), Tammy Baldwin (D-Wis.), Mark Begich (D-Alaska), Richard Blumenthal (D-Conn.), Dick Durbin (D-Ill.), Joe Donnelly (D-Ind.), Al Franken (D-Minn.), Kirsten Gillibrand (D-N.Y.), Kay Hagan (D-N.C.), Mary Landrieu (D-La.), Carl Levin (D-Mich.), Ed Markey (D-Mass.), Claire McCaskill (D-Mo.), Jeff Merkley (D-Ore.), Chris Murphy (D-Conn.), Mark Pryor (D-Ark.), Jack Reed (D-R.I.), Brian Schatz (D-Hawaii), Jeanne Shaheen (D-N.H.), and Mark Warner (D-Va.).

In addition to Bloom Energy, the National Association of Manufacturers, and AFL-CIO, Manufacturing Jobs for America has earned the support of the Alliance for American Manufacturing; American Automotive Policy Council; American Small Manufacturers Coalition; Association for Manufacturing Technology; BlueGreen Alliance; Dow; DuPont; Ford Motor Company; General Electric; the Information Technology & Innovation Foundation; National Association of Development Organizations; National Skills Coalition; One Voice – National Tooling & Machining Association, and Precision Metalforming Association; Progressive Policy Institute; STEM Education Coalition; Third Way; the United Autoworkers; and the United Steelworkers.

For a full list of the legislation included in Manufacturing Jobs for America, go to http://coons.senate.gov/manufacturing.

Construction Industry Experienced Best Month since 2006

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The ADP and Moody’s Analytics job report shows that December was the strongest month in 2013 and the construction industry experienced its best month since 2006.

According to the report released today by payroll company ADP and Moody’s Analytics, the U.S. nonfarm private sector added 238,000 jobs in December. This is the strongest job growth for any month in 2013, surpassing November’s high of 229,000, which ADP initially reported as 215,000.

The construction industry experienced its best month since 2006, with 48,000 jobs added to the payrolls, up from the 18,000 added in November. The manufacturing industry also had a strong month, adding 19,000 jobs in December, up slightly from last month’s report of 18,000.

Credit: Courtesy ADP and Moody’s Analytics

Change in nonfarm private employment by selected industry

“Job growth meaningfully accelerated and is now over 200,000 per month. Job gains are broad-based across industries, most notably in construction and manufacturing,” said chief economist of Moody’s Analytics Mark Zandi in a press release.

Goods-producing employment increased by 69,000 jobs last month, an increase from the revised figure of 46,000 added in November. That brings the total goods-producing employment for 2013 to 286,000 jobs. ADP claims that nearly 75 percent of this increase is attributed to the construction industry as the housing recovery increased throughout the year.

Service-providing industries, a large category that likely includes architects and engineers in the professional and business services sector, rose by 170,000 jobs last month, down from the revised November figure of 182,000. Employment in this field increased by nearly 1.9 million jobs over the course of 2013.

Looking ahead to 2014, Zandi predicts that the average job growth for the next year will be about 225,000 jobs per month. “That’s a pretty good year by almost any standard,” he said in a conference call.

The U.S. Bureau of Labor Statistics employment report is scheduled for release on Friday morning, providing more detailed information about the economic state of the construction and architecture fields.

SOURCE: Architect Magazine

Made in USA. Are You Sure?

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Including a prominent “Made in America” label on a product or in advertising can be an effective marketing tool. As unemployment in the United States remains a concern, some consumers may actively seek out American-made goods. But what does that Made in the USA label really mean?

The “All or Virtually All” Standard

The Federal Trade Commission is charged with prosecuting manufacturers and distributors that make false or misleading claims that a product is of U.S. origin. Under FTC regulations, for a product to be labeled Made in the USA, it must be “all or virtually all” made in the United States. This standard applies both to express and implied Made in the USA claims, such as including images of the American flag, a map of the United States or references to the manufacturer’s U.S. locations on packaging or in advertisements.

Factors indicating that a product is “virtually all” American-made include (1) a negligible amount of foreign content, (2) foreign content is incorporated early in the manufacturing process and (3) final assembly or processing takes place in the United States. This is not a bright-line or quantitative test. Rather, the FTC, in determining which cases to pursue, takes into consideration on a case-by-case basis the nature of the product and consumer expectations.

Qualified and Unqualified Claims

In its Made in the USA policy, the FTC distinguishes between unqualified Made in the USA claims and qualified claims, such as “Made in USA of U.S. and imported parts” or “Assembled in the USA.” A qualified Made in the USA claim may be appropriate for products that include some U.S. content or processing, but must still be truthful.

The FTC offers the example of an exercise treadmill that, while assembled in the United States, consists primarily of foreign-made components including the motor, frame and electronic display. The FTC cautions that claiming that the treadmill is “Made in America of U.S. and Imported Parts” would be deceptive because the value of the American-made parts is negligible.

California’s Stringent Statute

While many states have false advertising laws, California expressly prohibits the designation of products as Made in the USA or Made in America when the product or “any article, unit, or part thereof, has been entirely or substantially made, manufactured, or produced outside of the United States.” By requiring that “any article, unit, or part” of a finished product be American made, the California law is more stringent than the FTC’s “all or virtually all” standard.

While violation of the statute is a misdemeanor offense, the real risk is a civil class action lawsuit that exposes the defendant to payment of the plaintiff’s attorneys’ fees and class-wide damages.

In one prominent example, the Kwikset Corporation was sued in California state court by a class of consumers that had purchased locksets labeled with “Made in USA” or similar wording that contained screws or pins made in Taiwan or involved latch subassembly performed in Mexico. Kwikset argued that the labels were appropriate because the locksets were “substantially made” in America. The California Court of Appeals disagreed, concluding that if a product consists of separate, identifiable components, the law required each part to be entirely or substantially made in the United States. “Screws and pins are distinct components clearly necessary to the proper use or operation of a lockset because without them one could not install or operate the product.”

Kwikset was enjoined from using any Made in the USA labeling and ordered to notify its California distributors and retailers that any remaining inventory could be returned for replacement or refund.

Avoid Misleading Labels

Companies should evaluate the origin of the components and content of their products and the manufacturing processes that they employ on a case-by-case basis to determine if an unqualified Made in the USA claim is appropriate. California’s Made in the USA statute creates further challenges for companies that assemble their products in America incorporating foreign-made components. If the proportion of the foreign-made components is negligible, the product could comply with FTC regulations but still run afoul of California law. A carefully crafted qualified Made in the USA label, however, could still permit the manufacturer to truthfully tout the American contribution to its products.

SOURCE: Utah Business

New York Manufacturing Soars for 2014 Start

in Manufacturing & Sourcing

Comprised of surveys from around 100 New York executives, The Empire State Manufacturing Survey attempts to determine whether certain components of manufacturing have experienced growth (positive number), or contraction (negative number). Investors watch New York manufacturing (and other regions, as well) as a possible signal of larger economic upswings or downturns.

For January, the survey’s general business conditions index clocked in at 12.5 points, up from December’s revised 2.2 reading. . Analysts were pleasantly surprised by the index, having expected only a slight uptick in growth to 3.3.

Made In America- General Business Conditions

Source: New York Federal Reserve

Digging deeper, new orders made a major turnaround, bouncing back to 11.0 from December’s -1.7 contraction. As a sign of longer-term confidence and growth potential, the “number of employees” component headed from 0.0 in December to 12.2, while average workweek numbers flipped from -10.8 to 1.2 this month.Manufacturers’ six-month outlook remains solid, little changed at 37.5 compared to December’s 39.0 reading. New orders added on nine points to reach 39.1.

SOURCE: The Motely Fool

POTUS announces Manufacturing Innovation Institute

in Government, Manufacturing & Sourcing

RALEIGH– Air Force One landed at RDU Wednesday afternoon, kicking off President Barack Obama’s visit to the Triangle.

His visit began with a stop in RTP to tour Vacon, a company that designs drives used to power everything from elevators to exhaust fans. President announced the Manufacturing Innovation Institute, a new manufacturing venture for the country. The announcement is being made at NC State University, which is the school he has picked to lead his initiative.

(Entire speech, 21 minutes long, is linked at the end of this article) “I’m here to act, to help make Raleigh-Durham, and America, a magnet for the good, high-tech manufacturing jobs that a growing middle class requires and that are going to continue to keep this country on the cutting edge,” he said. The President said the institute’s goal will be to create new energy solutions using wide bandgap semiconductors to improve efficiency, reduce size and improve reliability. He also said two more “innovation hubs” will be launched in the coming weeks. Wednesday’s speech centered around strengthening advanced manufacturing and attracting good paying jobs. The idea is to do this through a public private partnership that will include 18 companies and 6 universities. NCSU will be the lead university in this venture, known as the “next generation power electronics innovation institute.” It will focus on energy efficient, high power electronic chips. “NC State couldn’t be more proud to have been selected to lead this new institute, which truly embodies everything that our university stands for – from our think and do mentality, to our collaborative spirit and unending commitment to solve to the grand challenges of society,” NC State Chancellor Randy Woodson said in a statement released Wednesday. Chancellor Woodson will travel back to Washington with President Obama on Air Force One. Woodson, along with UNC Chapel Hill Chancellor Carol Folt will attend an event hosted by the president and first lady Thursday on making college more accessible. They are part of a group of university leaders from across the country selected to attend. President Barack Obama is traveling the country over the next few weeks highlighting some of the ideas we will hear in his State of the Union Address at the end of the month. Watch the entire 21 minute speech.

WNCN: News, Weather for Raleigh. Durham, Fayetteville

SOURCE: NEWS 14

TPP: Fast Track to Poverty

in Jobs

That giant sucking sound predicted by Ross Perot commenced 20 years ago last week. It is the North American Free Trade Agreement (NAFTA) vacuuming up U.S. jobs and depositing them in Mexico.

Written by: Leo W. Gerard

Independent presidential candidate Perot was right. NAFTA swept U.S. industry south of the border. It made Wall Street happy. It made multi-national corporations obscenely profitable. But it destroyed the lives of hundreds of thousands of American workers.

NAFTA’s backers promised it would create American jobs, just as promoters of the Korean and Chinese trade arrangements said they would and advocates of the proposed Trans-Pacific Partnership (TPP) deal contend it will. They were — and still are — brutally wrong. NAFTA, the Korean deal and China’s entry into the World Trade Organization killed American jobs. They lowered wages. They diminished what America cherishes: opportunity. They contributed to the very ill that President Obama is crusading against: income inequality. There is no evidence the TPP would be any different. American workers need a new trade philosophy, one that protects them and puts people first, not corporations.

After 20 years, Americans know in their guts the damage NAFTA did to them, the destruction it caused to American manufacturing. There’s also concrete proof. In a study titled “NAFTA at 20,” released this month, Public Citizen’s Global Trade Watch concludes:

“After two decades of NAFTA, the evidence is clear: the vaunted deal failed at its promises of job creation and better living standards while contributing to mass job losses, soaring income inequality, agricultural instability, corporate attacks on domestic health and environmental safeguards, and mass displacement and volatility in Mexico.”

It points out that the NAFTA snake-oil salesmen at the Peterson Institute promised it would create 170,000 jobs a year. A year! Instead, it cost America at least 845,000 jobs. That is the number of manufacturing workers who were able to jump through all of the red-taped hoops necessary to receive Trade Adjustment Assistance (TAA) after corporations moved their jobs across the border. The study’s authors believe hundreds of thousands of additional workers lost their jobs because of NAFTA but did not qualify for the federal TAA aid.

The study also notes that the U.S. Bureau of Labor Statistics determined that two out of every three displaced manufacturing workers who secured new jobs in 2012 did so at slashed wages, the majority at a cut of more than 20 percent.

The result is rising income inequality. It happens like this: workers lose their good-paying factory jobs and take lower-paying positions. This increases competition for low-skill, low-pay jobs that can’t be offshored, such as hamburger flipping and shelf stocking. While a small number of corporate executives and wealthy shareholders profit from moving factories across borders, it forces increasing numbers of workers to vie for minimum-wage jobs. As a result, income inequality now matches the level it was during the robber baron days before the Great Depression.

A study last year by the non-partisan Economic Policy Institute (EPI) supports the Public Citizen findings. EPI determined that trade reduced wages for workers without college educations by 5.5 percent in 2011, costing the average worker $1,800. Meanwhile, trade with developing countries like China increased the wages of the smaller number of college-educated U.S. workers. The upshot is a widening gulf between Americans’ earnings, particularly as more and more Americans can’t afford the costs of higher education.

NAFTA actually encouraged corporations to abandon the United States. The Public Citizen report explains: “NAFTA created new privileges and protections for foreign investors that incentivized the offshoring of investment and jobs by eliminating many of the risks normally associated with moving production to low-wage countries.”

What that means is that U.S. corporations contribute to the trade deficit by manufacturing in Mexico and importing their products into America. Before NAFTA, the United States had a small trade surplus with Mexico. Now it’s a trade deficit. A huge one.

The Korean trade deal, which took effect nearly two years ago, is no better. Like NAFTA, its promoters said it would boost exports and create jobs. In its first year, U.S. exports to Korea fell 8.3 percent. Imports from Korea rose, increasing the trade deficit with Korea by nearly 40 percent. That cost Americans 40,000 jobs.

This is not what Americans want from trade. And yet, the United States is negotiating a NAFTA-style deal called the TPP with 11 Pacific Rim nations, including Brunei, Chile, Malaysia, Peru, Singapore, and Vietnam. The negotiations are occurring in secret. Average citizens have no access to what’s going on. Without significant changes, TPP will just be another American factory shuttering, dream shattering trade deal.

Of course, the corporations that stand to profit and the U.S. Chamber of Commerce support the current TPP scheme, as they did the other job-destroying trade deals. And so do corporate politicians.

Three of them — U.S. Rep. Dave Camp and Senators Orrin Hatch and Max Baucus –introduced legislation last week to speed passage of TPP — put it on the fast track. Under fast track, Congress excuses itself from its Constitutional duty to supervise international trade.

The fast track bill empowers the president to sign a secretly devised trade pact before Congress votes on it. Fast track also limits Congressional debate to 20 hours and forbids amendments.

In addition to the anniversary of NAFTA, last week was the 50th anniversary of Lyndon B. Johnson’s call for a War on Poverty.

In that address to Congress, Johnson also appealed for more balanced trade, for foreign countries granted access to the American market to open their markets to American goods. That’s what Americans want from trade — fairness. They know they can compete when given a level playing field.

Americans want trade deals to ensure equity. They want trade policies that increase American innovation, American manufacturing and American jobs.

They want trade policies that help America win President Obama’s war on income inequality, not schemes that grant special favors to corporations at the expense of people.

Follow Leo W. Gerard on Twitter: www.twitter.com/uswblogger

SOURCE: USW

20 Years Later, NAFTA Still a Massive Fail

in Jobs

NAFTA had little to do with trade and everything to do with corp investment rights.

NAFTA was fundamentally different than past trade agreements in that it was only partially about trade. Indeed, it shattered the boundaries of past U.S. trade pacts, which had focused narrowly on cutting tariffs and easing quotas. In contrast, NAFTA created new privileges and protections for foreign investors that incentivized the offshoring of investment and jobs by eliminating many of the risks normally associated with moving production to low-wage countries.

NAFTA allowed foreign investors to directly challenge before foreign tribunals domestic policies and actions, demanding government compensation for policies that they claimed undermined their expected future profits. NAFTA also contained chapters that required the three countries to limit regulation of services, such as trucking and banking; extend medicine patent monopolies; limit food and product safety standards and border inspection; and waive domestic procurement preferences, such as Buy American.

In 1993, NAFTA was sold to the U.S. public with grand promises. NAFTA would create hundreds of thousands of good jobs here – 170,000 per year according the Peterson Institute for International Economics.1 U.S. farmers would export their way to wealth. NAFTA would bring Mexico to a first-world level of economic prosperity and stability, providing new economic opportunities there that would reduce immigration to the United States. Environmental standards would improve.Rather than creating the promised 170,000 jobs per year, NAFTA has contributed to an enormous new U.S. trade deficit with Mexico and Canada, which had already equated to an estimated net loss of one million U.S. jobs by 2004.

More than 845,000 specific U.S. workers have been certified for Trade Adjustment Assistance (TAA) as having lost their jobs due to imports from Canada and Mexico or the relocation of factories to those countries. The TAA program is quite narrow, only covering a subset of the jobs lost at manufacturing facilities, and is difficult to qualify for. Thus, the NAFTA TAA numbers significantly undercount NAFTA job loss.

NAFTA has contributed to downward pressure on U.S. wages and growing income inequality. According to the U.S. Bureau of Labor Statistics, two out of every three displaced manufacturing workers who were rehired in 2012 experienced a wage reduction, most of them taking a pay cut of greater than 20 percent. As increasing numbers of workers displaced from manufacturing jobs have joined the glut of workers competing for non-offshorable, low-skill jobs in sectors such as hospitality and food service, real wages have also fallen in these sectors under NAFTA. The resulting downward pressure on middle-class wages has fueled recent growth in income inequality.The reductions in consumer goods prices that have materialized have not been sufficient to offset the losses to wages under NAFTA. U.S. workers without college degrees (63 percent of the workforce) have likely lost an amount equal to 12.2 percent of their wages under NAFTA-style trade even after accounting for the benefits of cheaper goods. This net loss, calculated by the Center for Economic and Policy Research, means a loss of more than $3,300 per year for a worker earning the median annual wage of $27,500.

All this making NAFTA still a major fail.

SOURCE: The Real News

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