Klobuchar Pushes Policies She Says Will Boost Manufacturing

A recent report from Senator Amy Klobuchar and other lawmakers provides advice for increasing U.S. manufacturing production and jobs.

U.S. Senator for Minnesota Amy Klobuchar, along with her democratic colleagues on the U.S. Congress’ Joint Economic Committee, released a report Tuesday that attempts to demonstrate the importance of U.S. manufacturing and suggests policy changes that they claim could reinvigorate the industry.
 
U.S. manufacturing was one of the hardest-hit sectors during the recent economic recession, losing 2.3 million jobs between the end of 2007 and the beginning of 2010—50,400 of which were lost in Minnesota—according to government statistics.

 
The industry has seen a gradual revival in the last couple years, however, gaining 554,000 jobs since February 2010, a 4.6 percent growth rate—and 16,000 jobs were added in Minnesota during that period, a growth rate of 5.5 percent.
 
According to Klobuchar’s report, the United States was home to more than 12 million manufacturing jobs in November, and while jobs continue to rise, that number remains well below the country’s 1979 peak, when manufacturing was responsible for 19.6 million employees—304,800 of which were in Minnesota.
 
In 1979, 22 percent of all “nonfarm” workers were employed in the manufacturing sector. The portion dropped to around 9 percent recently, although it was higher in Minnesota, at about 11 percent.
 
Manufacturing contributed nearly $2 trillion to the U.S. economy in 2012, which accounted for 12 percent of the country’s total gross domestic product (GDP). The industry contributed an even larger relative portion to Minnesota at $40 billion, which equaled 13.7 percent of the state’s total GDP.
 
Despite the recent positive trends, Klobuchar’s report states that the manufacturing sector needs to add almost 1.7 million jobs to return to pre-recession levels. The report lays out the following challenges in reaching those numbers: “insufficient support for R&D, obstacles to accessing and competing in overseas markets, deteriorating transportation infrastructure, an outdated and overly complex tax and regulatory system,” as well as finding workers with the sufficient skills needed for the available jobs.
 
The report suggested a number of detailed changes that may help the country to overcome those challenges.
 
“This report highlights immediate, bipartisan actions Congress can take to strengthen American manufacturing, from cutting red tape to increase U.S. exports to boosting STEM education, and I will continue to work to move these initiatives forward so we can move our economy forward,” Klobuchar said in an emailed statement.  
 
The first step in gaining manufacturing jobs, according to the report, is increasing education in the “STEM” fields (science, technology, engineering, and mathematics). The report authors contend that the Innovate America Act would improve STEM education by doubling the number of STEM-focused high schools, promoting computer science training, and expanding research opportunities for undergraduates in STEM majors.
 
The authors also cited the Women and Minorities in STEM Booster Act, which they say would create a program that awards competitive grants to colleges and nonprofit organizations to increase the participation of women and underrepresented minorities in STEM.
 
In order to expand access to capital for manufacturing companies, which the report claims will help boost job growth, the committee listed three policy actions. The Manufacturing Reinvestment Account Act, which would allow businesses to establish accounts where they can make annual pre-tax contributions of up to $500,000; the Job Creation through Energy Efficient Manufacturing Act, whose authors say would authorize funding for the Department of Energy to provide competitive grants to states for new or expanded industrial energy efficiency financing programs; and the Startup Innovation Credit Act, which the report suggests would help new manufacturers get access to and benefit from the research and development tax credit by allowing them to claim a credit against their payroll taxes.
 
Opening up markets abroad for more export opportunities is essential to improving the industry, the report added. In order to do so, the authors said policymakers should support the Currency Exchange Rate Oversight Reform Act, which they said would help counter currency manipulation that hurts U.S. manufacturers, and the Small Business Export Growth Act, which the report claims would help small businesses capitalize on export opportunities by improving federal export assistance programs.
 
Finally, the report claims that the Rebuild American Manufacturing Act and the Made in America Manufacturing Act will help create conditions that are necessary for the industry's growth. The former would mandate the development of a national manufacturing strategy and the latter would establish an incentive grant program for states or regional partnerships to create manufacturing enhancement strategies.