Tuesday, January 31, 2012

Policy changes can return US to prominence (Randy Wolken)

To the Editor: 

Manufacturing is getting a lot of attention. President Obama highlighted the importance of manufacturing and its growth as major factors in our nation’s economic recovery during his recent State of the Union address. Thanks to our ability to adapt and compete in the evolving global environment, our New York state manufacturing sector remains successful. It remains essential to the efforts of our state and nation to emerge from our current economic crisis. 

With that, I felt it necessary to respond to last Monday’s editorial questioning the future of our nation’s manufacturing sector. The editorial draws its conclusions from the examples of Kodak and Apple. These companies have very different histories, chose very different paths and today deal with very different challenges. The editorial fails to mention the broader issues and trends affecting advanced manufacturing, in America and worldwide. 

While Kodak and Apple each have success stories, each company also has distinct shortcomings. Kodak’s trouble stems more from its inability to develop the next generation of products and services after film was replaced with digital photography — which it helped create, but failed to develop fully — than its economic model for production. 

Unlike Kodak, which chose to invest, grow and support manufacturing in America, Apple primarily chose to develop its products in America and sell to Americans, but invest in manufacturing elsewhere, primarily China. Therefore, Apple’s production model has primarily benefited China, where over 700,000 jobs were created. Although that economic model has produced handsome profits for the company and its shareholders, it has not been nearly the winner for American workers. 

Apple’s argument that there are not enough skilled workers in America is unfounded. We have a highly-skilled work force that is ready and willing to learn new skills and work under suitable and fair conditions to produce high-quality, well-manufactured products. What America is not willing to do is succumb to poor working conditions or take away the quality of life of its people in order to meet production demands. 

Kodak did not fall short due to the lack of a skilled work force; it fell short due to the inability to stay ahead of its own game. Apple, on the other hand, is ahead in the game of innovation, research and development, but chooses not to invest in American manufacturing and the economic development success of our nation. 

Despite challenges in the manufacturing sector, the United States is still the world leader in manufacturing. Its most successful production today is generally business-to-business production, not consumer products. iPods and iPads are not produced in America — but they could be. To do so would require the help of the United States, state governments and citizens. Asia is the primary producer of consumer products — such as the iPad — today. Many of these nations have tilted the scales in their favor by manipulating currency, imposing trade barriers, stealing intellectual property and value-added taxes. This speaks nothing about the way they treat their workers. 

If we want good-paying, middle-class jobs, we need the support of policymakers to create environments where these jobs thrive. We need to lower the costs of production — and that does not mean wages. These unnecessarily high costs are related to the highest corporate tax rate in the developed world, high energy costs, high costs of frivolous lawsuits and the high costs of many outdated and counterproductive regulations. 

We also need outstanding schools teaching math, science, technology and skills like entrepreneurship and teamwork. We need certificate retraining for out-of-work employees who need additional 21st century, high-tech skills. We need a broadband infrastructure and maintenance of our transportation infrastructure. 

Companies do not compete in a vacuum and they react to the very economic conditions that exist in each country. As a community and nation, we need to value manufacturing and its middle-class jobs more than other places they can locate. When we do so, we will again see the return of many good-paying, advanced manufacturing jobs right here in the United States of America. 

Randy Wolken is president of the Manufacturers Association of Central New York.


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