Rochester Tooling & Machining Association

Political Advocacy

Candidates: Letís not forget manufacturing competitiveness this election year

By Michael McGarry

In an election year like none other, it is important for candidates seeking positions at all levels of government to understand that manufacturing in the U.S. is robust, but changes are necessary to reach the next level of global competitiveness.

According to the most recent data from the National Association of Manufacturers (NAM), manufacturing contributes $2.17 trillion to the U.S. economy. It employs 9 percent of the U.S. workforce in high-paying jobs and adds $1.40 to the economy for every $1 spent.


Our elected officials must build upon this momentum and the progress made with last yearís passage of the $325 billion highway bill and a permanent research and development tax credit by addressing the major hurdles that remain.

Create a competitive national tax system
The U.S. has the highest corporate tax rate among the 34 nations in the Organization for Economic Cooperation and Development. With countries around the world continuing to lower their corporate tax rates, U.S. manufacturers are becoming less and less competitive. Meaningful tax reform must begin by implementing a pro-growth tax plan that will lead to more investment, innovation and jobs. By taking this action, companies located in the U.S. will be more likely to stay in the U.S.

Focus on regulatory reform
According to NAM, manufacturers pay an average of $19,564 per employee per year to comply with federal regulations. Dollars spent by manufacturers on regulatory compliance for cumbersome or duplicative regulations are funds they could spend on capital investment or job creation. It is imperative that we create a regulatory environment that ensures product safety and consumer confidence without hampering business.

Close the manufacturing skills gap
Over the next decade, NAM estimates that nearly 3.5 million manufacturing jobs will likely be needed. Two million of these jobs are expected to go unfilled due to workers not having the skills needed for the modern manufacturing workplace. Manufacturers are already reporting a moderate or serious shortage of qualified applicants for skilled and highly skilled jobs.†

To address the gap, we must increase science, technology, engineering and math (STEM) education. We also need to promote industry-recognized skills certifications at trade and technical schools that allow manufacturers to clearly define the skills necessary for success in modern manufacturing.

Reform U.S. immigration law
U.S. manufacturers must be able to attract talent from anywhere in the world, and reforming the U.S. immigration law regarding legal immigrants is essential to the nationís competitiveness. Such reform should include fundamental changes in the method of determining the number of employment-based visas, creating a system with an emphasis on market demands.

For example, the U.S. should lift the cap on H-1B visas to provide an immediate visa to any Ph.D. student who graduates and wants to remain in the U.S. to work for a U.S.-based company. The country also should streamline the path to permanent resident status for H-1B holders, especially at the Ph.D. level, and eventually exclude those holding Ph.D. degrees from the H-1B cap. Manufacturers compete globally and should have the ability to attract and retain global talent in the U.S.

Harness the energy advantage
Plentiful and affordable energy is benefiting U.S. manufacturing, which is enjoying lower energy costs than our trading partners. Rather than become complacent, we must widen this gap by developing an energy strategy that embraces all forms of domestic energy production while expanding existing conservation and efficiency efforts. Oil, natural gas and clean coal remain essential contributors to U.S. energy security, but we also must invest in nuclear energy, alternative fuels, renewable energy and other domestic sources.††

Promote fair trade
To participate in the global economy, manufacturers need effective and fair trade policies.

Congress has failed to pass a new Miscellaneous Tariff Bill (MTB) since the last one expired on Dec. 31, 2012. According to NAM, this has resulted in a tax hike on manufacturers of $748 million and U.S. economic losses of $1.857 billion. It is time for Congress to act again to end this harmful and unnecessary tax on U.S. manufacturers.

The candidates the American people elect this fall will need to rise above partisanship to address the serious issues that are keeping not only U.S. manufacturers from achieving their full potential, but also the country and its workers.

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