Making the case for making more in America
America needs to make things again. Why? Because the kinds of jobs that can send kids to college and provide a secure retirement are not just minimum wage jobs. Creating high-wage jobs, middle-class jobs and steady year-round jobs, will take revitalizing the American manufacturing economy.
The average wage for manufacturing work in America is 20 percent higher than the national average wage1 — a premium that reflects the tremendous value added to our economy by the manufacturing sector. Each manufacturing job produces up to four downstream jobs, and according to a recent report, each $1 spent in manufacturing creates $1.43 in other sectors.2 That’s a “multiplier effect” nearly twice that of other parts of our economy.3
A healthy manufacturing sector isn’t just important to individuals looking for high-wage employment—it is vital to the long-term health and security of our national economy.
Manufacturing and technological innovation are so closely linked that manufacturing is still the principal source of innovation in the United States. If we don’t keep innovating, our economy will fall behind and millions more Americans will drop out of the middle class. Since innovation is driven by the manufacturing sector, a healthy economic future starts with restoring the health of American manufacturing.
Manufacturing is one of the few sources of steady and secure jobs for those who do not graduate from four-year colleges. A fair and just economy means creating opportunity for everyone, not just those who earn college degrees or, increasingly, advanced degrees. Spurring manufacturing is one of the ways we can help reverse the rapidly growing equality gap in our country that has seen the rich get dramatically richer and virtually everyone else fall behind.
Manufacturing is key to restoring our balance of trade. If we don’t make things, we can’t sell things to other nations. Why does that matter? Because in the long term, it means other countries gain more and more power and more influence over our economic well-being. If we want to control our economic future, we must restore our balance of trade.
And perhaps most importantly, manufacturing know-how is a “use it or lose it” proposition. If we stop making things, we lose the knowledge base and the workforce that knows how to make things. We need the kind of skilled workforce that has the technical knowledge manufacturing requires, the engineers and innovators who help drive product development and the practical applications that come from a robust manufacturing economy.
The Power of Buying Local
Manufacturing isn’t just big factories anymore. The “buy local” and “maker” movements have shown the tremendous economic and creative energies released, and the environmental benefits gained, when we stay local.
When we buy a piece of furniture that was made by a local carpenter in Del Norte County, we keep those dollars at home, we keep those skills local, we keep a neighbor in steady middle-class employment and we keep carbon emissions out of our atmosphere.
And if we buy that musical instrument from a small shop in Humboldt, it doesn’t just keep our local dollars local; it keeps trucks off the road and giant cargo planes out of the sky. And it keeps, or creates, new skills here at home.
When we buy local wine from a Mendocino vineyard, we can see for ourselves how those grapes were grown — and understand if they were harvested in a sustainable fashion.
When a skilled machinist makes tools and other high value-add products in Sonoma County, the supply chain created sets off a virtuous cycle that has actually been shown to help raise other wages, even of those not in the manufacturing sector. We know that spending $100 at an independent business puts $68 back into the local community, versus only $43 when the same $100 is spent at a national chain.4 The same thing happens when we do more than shop locally — when we make things locally. We create jobs and opportunity right here at home.
A Path to the Middle Class
I grew up in a logging town on the coast of Washington. When I was young, we lived in a trailer, like a lot of families in our community, struggling as the natural resource economy began to shrink.
Our family wanted the same kind of opportunities most of us dream about. My mom and dad wanted a house they could own themselves. They wanted to be able to send us to college. They hoped, one day, to be able to retire in security and dignity. They didn’t dream about riches — they just wanted the American dream of a middle-class life.
And they got it. My dad started a small trucking company. He took a risk. And it paid off for him, my family and me.
With the help of scholarships, government education loans and access to great public schools and universities, I was able to go to college, earn a degree in chemical engineering and then an advanced degree. I was able to succeed because my parents were able to build a secure economic foundation.
What came next for me was a path made possible by American opportunity. After finishing graduate school, I started a company that created technology to help U.S. manufacturers compete in the global marketplace. This was around the time when American manufacturing started to shrink. I wanted to help keep the American manufacturing economy alive. I’m proud we helped so many companies stay competitive, so they could stay here in America and keep high-wage jobs here at home.
I went on to co-found the Center for Entrepreneurship and Technology at UC Berkeley. My mission as an educator is to keep and promote the skills it takes to maintain America’s lead in innovation and technology. You know what we have found? Long-term economic success isn’t just about having the engineering skills to design new products, or the financial capital to bring them to market — you also need the skills to make these products yourself.
We can’t “outsource” our way to prosperity. We need to do more than design and consume products. We need to make things again.
The Shrinking Middle Class
My story is one that millions of Americans could tell — or used to be able to tell. The challenge today is that the middle class is shrinking dramatically — and that adds to our income gap, it hinders economic growth, and it takes away the kind of opportunities that we used to take for granted.
Since 2000, America has lost nearly one third of its manufacturing jobs, a loss directly related to the shrinking of the middle class. This recent decline is only an acceleration of a long-term trend — with manufacturing jobs falling from 27 percent of our workforce in 1970 to just over 10 percent today.5
We are proud of our ability to design products like the iPad – but history shows that innovation is linked to manufacturing skills, and if you lose the manufacturing skills you will eventually lose your technological edge. And, perhaps most dangerous of all, this new “winners and losers” economy has started to undermine the very idea of the American dream — the ideal that everyone has the opportunity for a better life if they are willing to study well and work hard.
With just a very few gaining more and more economic power, and the rest of America falling behind, we just can’t be sure that ideal is still true.
That’s why we need to start restoring the kind of high-wage jobs that are the foundation of a sustainable economic recovery, not just for Wall Street, but also for the Main Streets up and down our district and throughout our country.
Reasons for Hope
As tough as the American economy is right now, there is reason for hope when it comes to Making More In America Again. Even without a coherent national policy, our manufacturing sector is coming back to life.
Over the past two years, the economy has added 334,000 manufacturing jobs — the strongest two-year period of manufacturing job growth since the late 1990s.6
Manufacturing production grew 5.7 percent on an annualized basis since its low in June of 2009, the fastest pace of growth of production in a decade.7 But we still have a long way to go to recover from the more than two million manufacturing jobs lost in the recession.
Part of this growth is driven by the incredible productivity of the American worker. Relative costs in the U.S. have improved with productivity growth: U.S. manufacturing productivity — which has always been strong — continues to improve, rising nearly 13 percent since the first quarter of 2009.8
Combined with an increased cost of labor elsewhere in the world, it is now more cost-competitive to invest in American manufacturing workers.
Right now U.S. factories competitively produce about 75 percent of the products that the nation consumes.9 A series of identifiable smart actions and choices by business leaders, educators, and policymakers could lead to a robust, manufacturing-driven economic future and push that figure up to 95 percent. Alternatively, if the U.S. manufacturing sector remains neglected, its output could fall by half, meeting less than 40 percent of the nation’s demand, and U.S. manufacturing capabilities could then erode past the point of no return.
Of course we are not going to bring every manufacturing job back. That is a reality. And when it comes to the very lowest-wage manufacturing jobs, we might not want to invest our national efforts in these types of jobs. But we can target the kind of high-wage and high-value manufacturing, and promote expanded markets for locally made goods, that will help us keep hardworking families in the middle class.
The upside to bringing these jobs home can be calculated — and it is significant. For example, if we could return to the level of the late 1970s when about 20 percent of jobs were in the manufacturing sector — we would create 12 million new jobs directly and the potential to create another 30 million new jobs in services to support this expanded high-value manufacturing sector.10
Why is that number so important? Because that’s just about the number of jobs we need to restore and create over the next ten years to get back to full employment in the U.S.
Plans versus Politics
Of course, we’ve heard our politicians talk about jobs almost endlessly. But the problem is that most of them don’t have much experience in the fundamentals of how to create high-wage jobs and how to restore economic balance. So many of their campaigns are funded by Wall Street, the big banks and giant corporations, that perhaps they feel beholden. Others have spent their careers in government office — which is a noble calling — but one that emphasizes quick fixes and sound bites over the kind of economic fundamentals we need to restore the middle class and create economic fairness in the long term.
That’s why I am running for Congress. And that’s why I am offering my plans for restoring the American manufacturing economy.
I’m running because I know from my own life, my own experiences helping American manufacturers succeed and my own career in education working to promote innovation and technology — we need more than promises. We need a robust plan to restore the middle class, starting with the jobs that sustain the middle class — manufacturing employment.
My plan can be broken down into seven major priorities — and I would like to discuss these briefly in the pages ahead. Because I have actually worked to create jobs and spark innovation, I know that this won’t be easy. But I have incredible faith in the American economy, and the American worker, because I know we are still the best trained, most creative, most motivated and most innovative people on Earth. Here are seven simple priorities to help us stay that way.
One of the foundational principles of my campaign is the belief that politicians don’t have all the answers — but there are answers out there if we bother to ask and listen.
So let’s get the conversation going — here are some of my ideas to get our friends and neighbors back to work. What do you think? What are your ideas? What do you think is right, or wrong, about the ideas proposed here?
Let me know — you can email me at Stacey@StaceyLawson.com — and I’ll share your ideas with our growing community.
I’ll be releasing more proposals in the months ahead — but creating new middle-class jobs by restoring America’s manufacturing economy is my first priority, which is why I have presented these proposals first.
1 Michael Ettlinger and Kate Gordon, “The Importance and Promise of American Manufacturing, Why It Matters if We Make It in America and Where We Stand Today,” (Center for American Progress, April 2011), available at http://www.americanprogress.org/issues/2011/04/pdf/manufacturing.pdf.
2 Manufacturing Matters To The U.S., Manufacturing Jobs Matter to US: A Union Member’s Handbook for Improving the Future of Manufacturing Jobs and the Manufacturing Industry in the U.S.,” (Working for America Institute), available at http://www.workingforamerica.org/documents/PDF/sloan_report_revised.pdf.
5 “Report to the President on Ensuring American Leadership in Advanced Manufacturing,” (Executive Office to the President and President’s Council of Advisors on Science and Technology, June 2011), available at http://www.whitehouse.gov/sites/default/files/microsites/ostp/pcast-advanced-manufacturing-june2011.pdf.
8 “A Vision for Economic Renewal: An American Jobs Agenda,” (The Task Force on Job Creation and New America Foundation, July 2011), available at http://newamerica.net/sites/newamerica.net/files/events/Economic-Taskforce-booklet_FINAL.pdf.
9 Arvind Kaushal, Thomas Mayor, and Patricia Riedl, “Manufacturing’s Wake-Up Call,” (Booz & Company and Tauber Institute for Global Operations, University of Michigan), available at http://www.tauber.umich.edu/docs/Manuf-WakeUp_w_Cover.pdf.
10 “A Vision for Economic Renewal: An American Jobs Agenda,” (The Task Force on Job Creation and New America Foundation, July 2011), available at http://newamerica.net/sites/newamerica.net/files/events/Economic-Taskforce-booklet_FINAL.pdf.