Creating Jobs for America
Our nation’s unemployment continues to hover at distressing levels, and many industrial sectors and manufacturers of all sizes are still struggling to recover from the most serious economic downturn in decades. As the White House and Congress focus on how to strengthen the economy and get people back to work, the National Association of Manufacturers (NAM) has released an in-depth economic analysis prepared by the non-partisan, independent Milken Institute. The report looks at policies and investments to create jobs immediately and grow our economy in both the short-term and the years to come.
“Jobs for America: Investments and Policies for Economic Growth and Competitiveness” makes a powerful case for manufacturing to lead the United States into a renewed era of growth – if Congress enacts policies to promote U.S. competitiveness. It should serve as a guide for policy-makers intent on increasing jobs and sustained economic growth.
Government doesn’t create jobs — business creates jobs, and we need to encourage more job growth in the private sector. If our elected officials are serious about reducing double-digit unemployment, they must enact policies that maintain and improve U.S. competitiveness.
The policies in this report do not harm the fiscal balance of this country and, over time, will help close the gap on our huge deficit. They provide solid results in terms of jobs and GDP, making the case for policies to reinforce manufacturing as the foundation for economic growth.
The report demonstrates how more than 11 million jobs can be created in the United States in this decade alone, while enhancing the long-term global competitiveness of manufacturing in our nation.
Using widely accepted economic models and assumptions, the Milken Institute’s economists reached these findings:
Reduce the Corporate Tax Rate The United States has the second highest corporate tax rate among the major industrial countries in the Organization for Economic Cooperation and Development (OECD). Reducing the U.S. corporate income tax to match the average of other industrial countries would trigger new economic growth. By 2019, it could boost real GDP by $375.5 billion (2.2 percent), create 350,000 manufacturing jobs and increase total employment by 2.1 million.
Increase and Make Permanent the R&D Credit The time is long overdue to make the research and development (R&D) credit permanent and more robust to help maintain America’s innovative leadership. A permanent R&D credit, increased by 25 percent, could boost real GDP by $206 billion (1.2 percent), generate 316,000 manufacturing jobs and raise total employment by a half million jobs within a decade.
Modernize U.S. Export Controls Our current export controls system operates under a Cold War mentality. Updating the system would increase exports in high-value areas, enhancing real GDP by $64 billion by 2019 (0.4 percent), creating 160,000 manufacturing jobs and expanding total employment by 340,000.
Invest in Energy, Broadband and Transportation Infrastructure Investments of $425.6 billion in 10 areas of infrastructure – highways and transit, broadband infrastructure, onshore exploration/offshore drilling, drinking water and wastewater infrastructure, smart grid, sustainability projects (natural gas and clean coal technology), nuclear energy, waterways and aviation (NextGen) – would create 3.4 million construction- and R&D-related jobs. Accounting for ripple effects across other sectors, the total impact would add up to more than 10 million jobs. The impact on long-term competitiveness is just as critical.
Manufacturers have long called for a growth agenda that embraces a more competitive corporate tax structure, incentives for innovation/R&D, expanded trade opportunities and investments in transportation, communications and energy infrastructure. Our new report comes at a critical point for the nation and the manufacturing sector, and policymakers should be receptive to the study’s conclusions.
The public has grown skeptical of big government as the answer to the nation’s economic difficulties. Proposals by the White House and Congress to impose a new government regime to control greenhouse emissions have stalled. The voters seem to understand that these proposals are too big and too costly and will simply make manufacturers in the United States less competitive globally.
We are concerned about jobs and how quickly we can get people back to work. At the same time, we want to make sure we are spending and investing wisely to improve our ability to compete. If Congress follows the roadmap in Jobs for America, we will get America working again, and we will make our nation stronger as a competitor in the global marketplace.
The NAM is committed to pursuing and enacting the policies and investments detailed in the report. “Jobs for America” report is available on the NAM’s Web site at www.nam.org. A data Web site with the outcomes of the policy simulations and data sets for the investment in each of the project categories is available at www.milkeninstitute.org/jobsforamerica.
John Engler is president of the National Association of Manufacturers and former three-term governor of Michigan.
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