Friday, August 29, 2014

Secret of American greatness lies in a vibrant job market

1/31/2014

President Obama’s State of the Union speech Tuesday included assertions that opportunity defines America and its promise must be restored. One concrete recommendation for helping to restore the country’s prestige and potential for greatness was to insource jobs from abroad by lowering taxes for those businesses creating jobs “right here at home.”

We agree jobs need to come back to the United States. Every time another U.S.-based company moved its manufacturing facility overseas, which began in earnest in the 1980s, it took with it thousands of jobs — jobs that used to be the undergird for this country’s middle class. Those jobs also took with them America’s former ever-rising standard of living, as well as the customary 15 other jobs and businesses fueled by the manufacturer. Besides the American jobs that evaporated overnight, so too did the capital investment in facilities, which fueled the country’s economy in countless other ways — including infrastructure.

President Obama’s State of the Union speech Tuesday included assertions that opportunity defines America and its promise must be restored. One concrete recommendation for helping to restore the country’s prestige and potential for greatness was to insource jobs from abroad by lowering taxes for those businesses creating jobs “right here at home.”

We agree jobs need to come back to the United States. Every time another U.S.-based company moved its manufacturing facility overseas, which began in earnest in the 1980s, it took with it thousands of jobs — jobs that used to be the undergird for this country’s middle class. Those jobs also took with them America’s former ever-rising standard of living, as well as the customary 15 other jobs and businesses fueled by the manufacturer. Besides the American jobs that evaporated overnight, so too did the capital investment in facilities, which fueled the country’s economy in countless other ways — including infrastructure.

The job losses fostered a brain-drain of sorts as some Americans left the U.S. to operate those overseas companies, plus American universities trained international students and then sent them back to their home countries to operate those former American companies. Is it any wonder China and India have prospered with America’s former manufacturing plants and jobs?

Those jobs have been difficult to replace, and in many cases, communities in such cities as Detroit, Cincinnati and Cleveland were devastated. Whoever thought that America could survive strictly on innovation and consumption didn’t understand the great multiplier effect each of those manufacturing jobs represented nor did they understand the tremendous dependence communities and states had on manufacturing.

Whether it was elitism, desire to help corporations achieve greater profits by outsourcing jobs, or something else that convinced lawmakers to provide incentives to companies to take jobs out of the U.S., those mistakes now ought to be crystal clear. Those incentives include a tax reduction for corporation’s moving expenses when it shifts jobs overseas. It’s an incentive that must be discontinued. Obama proposed a 20 percent tax credit for those companies bringing jobs back to the U.S.

The tax credit is one of the ideas emerging from Obama’s “Insourcing American Jobs” forums with American manufacturers to reverse the trend of outsourcing jobs and restore job creation bring back the pride of “Made in the U.S.A.” back to the lips of the global marketplace. Another recommendation is a “manufacturing communities tax credit” to aid communities losing a manufacturer to allay the loss.

Bringing back manufacturing jobs is a key step in helping the U.S regain its powerful industrial swagger. It is well past time to focus on this issue that drives nearly everything else in the nation.

 — Jeanny Sharp, editor and publisher

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