By Representative Pitts
Has the Industrial Revolution left America? Based on years of gloomy articles, many Americans might think that the U.S. doesn't manufacture anything anymore. Looking at the tag on your shirt or the stamp on your child's toy, you're not very likely to see the words "Made in the USA."
But appearances are deceiving. The United States is still the world's leading manufacturer. Americans make $1.7 trillion worth of products every year. More than 21 percent of the world's goods are made here. China might be catching up, but right now they make just 15 percent of the world's goods.
Over 17 million Americans work in manufacturing and these are good paying jobs. Including pay and benefits, the average manufacturing worker makes over $77,000.
Manufacturing is still vibrant in the U.S., but the competition is intense.
Washington can make it easier, or harder, for manufacturing jobs to stay in America. Unfortunately, some significant new rules could drive companies overseas.
Manufacturing requires lots of power. Whether you are building a car or a computer, you are going to use a lot of energy to put together that product. One of the top costs of any manufacturer is electricity.
Electricity prices in the U.S. are reaching record levels. At the end of last year, the national average price climbed to 11.8 cents per kilowatt. In Pennsylvania, it was slightly higher at 12.7 cents. One of the principal causes of these rising rates are government regulations
New rules are making it more expensive for both power plants and for individual manufacturers that operate a boiler. The Environmental Protection Agency determines maximum available control technology (MACT) for industries. Last year, the EPA Administrator announced a final rule for Utility MACT and is continuing to work on a Boiler MACT rule.
The Utility MACT rule could be one of the most expensive government regulations ever, costing nearly $10 billion a year by 2015. In response to the new rules, energy companies across the country are announcing closures of power plants. Just last month, GenOn, the third-largest independent power producer announced that it would be shutting down 13 percent of its generating capacity.
Boiler MACT would have a much broader effect. Most manufacturers operate a boiler of some type. EPA rules going through the process right now could force them to upgrade to much more expensive technology. The EPA estimated the total cost to companies at $9.5 billion. An outside study said costs could rise to more than $20 billion. That's money that won't be used to create jobs.
I believe manufacturers and the power plants that provide them electricity should work toward reduced emissions and cleaner skies. However, forcing U.S. jobs to move to heavily polluting countries is a loss for the environment. We need rules that encourage power plants and boiler operators to make sensible and cost-effective upgrades.
Sensible energy and environmental policy can help American manufacturers remain competitive. Strong trade policy can help companies find new markets for their products.
I'm glad to say that President Obama and his administration have been much more helpful on trade issues. Just this week, the South Korea free trade agreement went into effect. Last year, the President finally worked together with Republicans to sign this pact and other agreements with Colombia and Panama that had been waiting approval for years.
The President has also been working to press China on trade its trade practices. The administration recently brought concerns over China's controls on rare earth minerals, a critical component for many manufacturers, to the World Trade Organization. Congress recently supported continuing Department of Commerce administered tariffs on some Chinese goods allowed under a WTO ruling.
I hope that the President can continue to press China to fairly value its currency. An undervalued currency makes American products shipped to China more expensive than they should be.
Stable regulation and energy prices plus an expansive trade policy can help American manufacturers stay competitive in a tough climate. American workers are industrious and well educated and many of them are looking for jobs. We can still be a nation that makes quality goods. We just need a government that lets American ingenuity work freely.