By Kevin L. Kearns
As New York faces a primary election, voters are keenly aware that the economy is struggling. And nowhere is this more evident than in U.S. manufacturing, which has contracted for four straight months and is in a recession.
America has lost roughly 5 million manufacturing jobs since 2000, including roughly 300,000 jobs in New York. The loss of so much skilled, high-paying work has profoundly hurt America’s middle class, with formerly well-paid workers forced into unemployment, early retirement or low-wage service jobs. No wonder voters are angry.
To restore the viability of domestic manufacturing, voters should look for candidates who will tackle a major problem facing the nation’s factories, namely, bad U.S. trade policies.
When Americans are asked why U.S. factories are moving overseas, they usually think “cheap labor.” But labor is only a small part of the picture. What really hurts U.S. factories are the huge subsidies that foreign governments provide to their industrial sectors.
China, Japan, Malaysia, Singapore, South Korea and some European Union countries deliberately intervene in currency markets, making their exports artificially cheap against American-made goods. That’s why, for example, the annual U.S. trade deficit with China has jumped from $83 billion in 2000 to $366 billion in 2015. Voters should be asking, “Who will stop this hemorrhaging of our manufacturing base?”
In 2013, bipartisan majorities in the House and the Senate urged President Obama to include strong, enforceable currency measures in the Trans-Pacific Partnership (TPP.) Congress did so again in 2015. Unfortunately, the Obama administration ignored Congress, and there are no penalties for currency manipulation in the TPP. If passed, the deal will allow even more artificially cheap goods to enter the U.S. market, further weakening industry.
America’s manufacturers are beset by a host of other unfair trade practices. China hugely subsidizes its energy sector and props up key industries like auto, steel, glass, paper, rubber and electronics. These subsidies are actionable under world trade law, and could be countered if only a U.S. president enforced existing trade laws.
A strong manufacturing base is critical to America’s economic future. Manufacturing jobs pay better than service jobs and provide better benefits. Manufacturing also supports related jobs throughout the economy and drives 70 percent of private-sector research and development.
Voters must help rebuild manufacturing by asking candidates if they support action against currency manipulation, and will reject outsourcing deals like the TPP. When voters listen closely to candidates on trade issues, they’ll find out who wants a robust future for America’s factories and workers.
Kevin L. Kearns is president of the U.S. Business & Industry Council.