By John J. Hopkins
Manufacturing isn't dead, but it can't help America pull out of its economic slump and create jobs unless there's an attitude adjustment in Washington, D.C.
That's part of a message Congressman Chris Lee delivered Thursday morning in Depew where he unveiled his five-point "Manufacturing for Tomorrow" job plan that he said will strengthen the manufacturing base not only in Western New York but throughout the United States.
Manufacturing at one time was the backbone of the region, but industry has suffered several blows in the past few decades as jobs have moved to other areas of the U.S.
Lee's long-term strategy includes tax relief, improved education and workforce training, tort reform, customs reform and opening new markets.
"This is a common sense way to put people back to work," Lee said. "We cannot have a strong economy that creates jobs without a strong manufacturing sector."
Lee introduced his plan at Buffalo Tungsten, a Depew-based manufacturer of tungsten powder products used in high-temperature structural materials and electronics.
"Chris Lee's policy is one that will make it worth our while to invest," said Ralph Showalter, president of Buffalo Tungsten.
However, Lee could have a difficult time finding support in Washington, said James DeChene manager of the Providence, R.I.-based eastern region office of the U.S. Chamber of Commerce, who was in town to meet with local chambers and to hear Lee's announcement.
"It appears at first glance to be a strong policy," DeChene said. "But to accomplish any of these in this political climate will be difficult."
Lee said too many politicians in Washington are more concerned about "the next election cycle" and subsequently make moves that are reactionary rather than proactive.
"I am astounded by a lack of comprehension in Congress," Lee said. "We need to start by giving business incentives, not penalizing them. It is so critical for this country and Western New York. We have near-record unemployment and Washington has missed the mark on manufacturing."
Lee (R-NY-26) spent a lot of time discussing U.S. corporate taxes which he says is second-highest in the world only to Japan. However, the Japanese government has pledged to cut that nation's business taxes, which would put the U.S. No. 1 in an unenviable category.
To make the U.S. more competitive, Lee proposes dropping the corporate tax rate, which stands at almost 40 percent, to 25 percent. His plan would place the U.S. in the middle of the pack; neither an advantage or a disadvantage. It would, Lee says, level the playing field.
"Our domestic manufacturers are fighting on an uneven playing field with their foreign competitors," said Lee, "whether that be paying higher tax rates or fighting against Chinese currency manipulation."
In order to create more manufacturing jobs, the country would need more graduates in the "STEM" fields of science, technology, engineering and math. Among ideas in Lee's plan that address this is proposing a manufacturing student loan forgiveness program. Graduates with STEM degrees who are employed in a manufacturing-related career could be eligible to receive $5,000 per year in loan forgiveness, up to four years.
"Our best and brightest need to become engineers and scientists," Lee said. "There's enough of them already on Wall Street."
Tort reform is important, Lee said, because frivolous lawsuits are out of control, and manufacturers are bearing the brunt of these costs. Lee proposes capping punitive damages and a statute of limitation to cut down on lawsuit abuse.
Reforming customs is needed to stop the flow of billions of dollars worth of pirated goods into the U.S. and help protect intellectual property. Lee advocates better coordination between rights holders and Customs and Border Patrol.
According to the Congressional Research Service, the U.S. from 2006 to 2008 lost $16.6 billion in trade due to copyright piracy. "Microsoft is a big victim of counterfeiting," Lee added.
Opening new markets includes supporting proposed free trade agreements with Columbia, Panama and South Korea that are backed by the Obama administration. This would ensure job growth and expand U.S. exports into new markets. Agreements with these three countries alone, reports the International Trade Commission, would create 250,000 jobs.
The U.S. Chamber's DeChene said his organization supports the proposed free trade agreements.
"We hope that the South Korea one will pass this year," DeChene said. "We also support tort reform, but that will be difficult. Even health care was tough, with the power of attorneys in Washington."
Since 2000, the United States has lost 6 million manufacturing jobs, including 272,000 -- a decline of 36 percent -- in New York state alone, the Public Policy Institute of New York state reports. The Buffalo and Rochester areas have fared worse, shedding 73,000 jobs representing 39 percent of its manufacturing workforce.
Despite the decline, Lee notes that manufacturing remains "a strategic economic advantage" for the United States. He pointed to numbers from the National Association of Manufacturers that show the U.S. produces 21 percent of all global manufactured products, more than any other country. Also, one of every six private sector jobs is in the manufacturing sector. Lee said it can be better.
"In the last two decades we have gotten away from what this country used to be about," Lee said. "It's an historic mistake."