WASHINGTON, D.C.—The U.S. Senate Committee on Commerce, Science, and Transportation announces the following full committee hearing titled The Future of American Manufacturing: Maintaining America's Competitive Edge.
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Chairman John D. (Jay) Rockefeller IVU.S. Senate Committee on Commerce, Science, and Transportation
WASHINGTON, D.C.—Welcome to today’s hearing. I’m pleased Commerce Secretary Gary Locke is here to share his ideas on the future of American manufacturing. I’d also like to welcome Congressman Steny Hoyer. As House Minority Whip, Congressman Hoyer has been leading the charge to strengthen America’s middle class by “Making it in America” again.
Over the last century, manufacturing was the engine of America’s prosperity. Henry Ford’s assembly lines were a model of industrial efficiency, providing jobs and good pay to American workers at the turn of the century. During World War II, Americans’ prowess and productivity turned the tide of the war and cemented our place as the world’s largest and most dominant manufacturing economy.
After the war, the world watched as America continued to build, make and create. Great American icons, like General Motors and Boeing, grew and prospered. American manufacturing became synonymous with ingenuity and American know-how. The jobs it supplied grew our economy. A large, vibrant middle class was born.
But today’s manufacturing sector is a shadow of its former self. In the last decade alone, more than 5 million manufacturing jobs have disappeared and 57,000 factories have closed.
Even America’s iconic inventions – and iconic brands – are no longer made here. Mattel Toys – the largest toy company in the world – closed their last American factory in 2002. 65 percent of their products are now made in China. The last time a pair of Levi jeans was made in America was in December 2003.
Across the nation, plant shutdowns have devastated small towns and communities. I’ve seen it happen in West Virginia. When a factory closes, it creates a ripple effect with far reaching consequences. It’s not just the plant workers and their families that suffer, but the entire town. Local shops and restaurants lose business. Tax revenues go down, impacting schools and emergency services.
Now, there are some who say our manufacturing decline is inevitable. They claim that we do not need an industrial base; and that as long as we keep high-value work in the U.S., we’ll be fine. I couldn’t disagree more. That policy is usually espoused by people who sit at desks for a living and have not ventured into America’s industrial towns.
This country cannot subsist as a service economy. We will not thrive as a nation if we do not make things. In order to get our economy humming again, we need to buy – and make – American. Here’s why: On average, manufacturing workers get higher pay and more generous benefits than Americans in non-manufacturing jobs. Where manufacturing goes, research and development tend to follow.
Manufacturing has one of the largest multiplier effects in our economy. It is estimated that 2.5 additional jobs are created for every one manufacturing job. Think about it. Where there are factories, there are suppliers. Where there are suppliers, there’s a supply chain of producers –and more workers. And where there are workers, there are restaurants, cultural establishments and stores to sustain and entertain them.
Today, I want to hear from you, Secretary Locke, on what more we can do to grow America’s manufacturing sector and create more good-paying jobs.
I have some ideas about the role Congress can and should play. I’m proud of the work this Committee has done funding new investments in science, technology, engineering and math education. We recognized some time ago that if we are to prepare the next generation of workers for advanced manufacturing jobs, we need a highly trained workforce.
But there is more to do and no time to waste. Manufacturing is a jobs issue – plain and simple – and we must get this right.
This hearing is the first in a series I will hold on manufacturing and jobs in America. I want everyone’s best ideas on how we can encourage more manufacturing. These ideas, in turn, will serve as the basis for legislation to rebuild American manufacturing and make our country better, stronger and safer.
I look forward to hearing from you today. Thank you.
Senator Kay Bailey HutchisonU.S. Senate Committee on Commerce, Science, and Transportation
STATEMENT OF SENATOR KAY BAILEY HUTCHISON
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
March 2, 2010
“THE FUTURE OF AMERICAN MANUFACTURING: MAINTAINING AMERICA’S COMPETITIVE EDGE”
I want to thank the Chairman for holding this important hearing on “The Future of American Manufacturing: Maintaining America’s Competitive Edge.” I also want to thank Secretary Locke for appearing today as a witness.
Given the amount of negative reporting about the continued loss of American jobs in manufacturing sectors, such as steel and automobiles, it might surprise some to know that the United States remains the world’s number one manufacturing nation - producing 21 percent of all global manufactured goods and out-producing number two China by more than 40 percent.
Manufacturing supported an estimated 18.6 million jobs in the U.S. in 2009 or one of every six jobs in the country. There is, however, justifiable concern that our position as the leading manufacturing nation is slipping.
Members of the Secretary of Commerce’s Manufacturing Council reportedly told the Department of Commerce that, “U.S. manufacturers face a 17 percent higher cost of doing business compared to our major trading partners.” As a result, over the past decade, more than 50,000 factories have shuttered in the United States. Between 2001 and 2010, the total number of manufacturing employees in the United States has declined by 31 percent.
Exports have remained a key driver of our nation’s economic growth. In 2008, the manufacturing sector accounted for 57 percent of the nation’s total exports of goods and services. However, despite the demand for U.S.-manufactured goods, China continues to overtake the United States as a leading exporter of manufactured goods. Consequently, the U.S. share of global exports of these products declined from 19 percent in 2000 to 14 percent in 2007. To cite just one example, the U.S. share of semiconductor exports has fallen from 20 percent to 12 percent as the industry has shifted to a more global business model.
If the United States is going to remain the world’s number one manufacturing nation, we must retain our competitive advantages by continuing to invest and lead in research and development and private sector innovation, productivity and technology. We must aggressively open markets to export our products, negotiate and ratify free trade agreements, and most importantly, put in place a tax and regulatory environment that rewards and encourages growth in the manufacturing sector.
Last December, we were able to pass a fiscally responsible reauthorization of the America COMPETES Act, which funds STEM education for our future innovators, groundbreaking research into new frontiers and out of the box technologies, as well as technology transfer from our national labs and agencies. Strengthening all of these activities is part of the solution to assist U.S. competitiveness in manufacturing.
While the figures that indicate we are losing our competitive advantages are troubling, there are also some encouraging data. The United States leads the world in worker productivity – in other words, we build more with fewer workers. I am also encouraged by the success of manufacturers in my own state of Texas over the past decade. Texas continues to lead the nation in the number of jobs created in all sectors, including manufacturing. Texas continues to attract and create manufacturing jobs and export our products throughout the world. I believe that success is the direct result of the business-friendly climate in Texas that has resulted from a number of principles that the federal government would do well to replicate. Texas offers low taxes, a limited regulatory burden, access to highly qualified STEM graduates, tort reform and right to work laws.
If the United States is to maintain our manufacturing base and compete globally, we must do all we can to ensure we enhance our global advantage through innovation, and regulatory and tax reform to lighten the burden on manufacturers.
I look forward to hearing from Secretary Locke on the efforts of the Department of Commerce to address the many issues and challenges facing the manufacturing industry.
The Honorable Steny H. HoyerDemocratic WhipU.S. House of Representatives
Witness Panel 1
The Honorable Gary LockeSecretaryU.S. Department of Commerce