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As the campaigning for the 2012 election nears, America is still in deep trouble in unemployment and ever-increasing job-killing import competition. We lost 55,000 manufacturing facilities in the last decade, and those losses continue at about 1,000 per month along with many more good jobs.

Any changes in trade policy to correct this grievous situation and thereby help President Obama’s re-election will have to start in the Democrat-controlled U.S. Senate. Who’s doing the most to sponsor new trade policy legislation ? He’s Ohio’s senior Sen. Sherrod Brown. He’s also up for re-election in a crucial race that will have much  national attention. Who wins in Ohio may well decide which party will control the Senate and who wins the presidency!

Sen. Brown is a priority  target for Republicans, who oppose his leadership on trade reform to correct the disastrous one-sided U.S. free trade policies of Wall Street, big banks, and major multinational companies.

Sen. Brown needs the help of all like-minded organizations. I urge USW to raise its strong voice to make trade reform a major election issue for voters and a big boost for an Obama victory as well as for Ohio’s Sen. Brown.

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Kenneth N, Davis, Jr. also is a former U.S. Assistant Secretary of Commerce/International and former IBM vice president and chief financial officer.

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David Brancaccio’s Marketplace story Tuesday, Decline of Kodak offers lessons for U.S. business traced the decline of Kodak and the loss of Rochester, NY’s good, middle-class jobs to Kodak’s failure to tend its “industrial commons.” This is a national problem. For 2012 let’s resolve to restore our industrial commons and bring manufacturing back to the U.S.

Kodak on Marketplace

Listen to Tuesday’s Marketplace story, Decline of Kodak offers lessons for U.S. business.

Click to listen.

Story summary: Kodak didn’t tend its “industrial commons,” the local concentration of expertise in making the things that go into a camera.

You make your money by selling cameras. And you now needed to make components. You needed to make lenses; you needed to make shutters — all kinds of things that the skills for which no longer existed in Rochester.

This is what we have done in our country, too. We have been dismantling our “industrial commons.” By sending manufacturing out of the country we have been taking apart the supply chains and abandoning the expertise and skills and culture that go with it.

Other Warnings

Last year, former Intel CEO Andy Grove sounded a warning about this problem. In How to Make an American Job Before It’s Too Late. Grove wrote that we are not just losing jobs to China, we are losing the “chain of experience” that enables new companies and industries to form and to create new jobs and argues for a national economic strategy to preserve our manufacturing and technology base. He lays out a plan: “rebuild our industrial commons,”

The first task is to rebuild our industrial commons. We should develop a system of financial incentives: Levy an extra tax on the product of offshored labor. (If the result is a trade war, treat it like other wars—fight to win.) Keep that money separate. Deposit it in the coffers of what we might call the Scaling Bank of the U.S. and make these sums available to companies that will scale their American operations. Such a system would be a daily reminder that while pursuing our company goals, all of us in business have a responsibility to maintain the industrial base on which we depend and the society whose adaptability—and stability—we may have taken for granted.

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Those of us ensconced in debates in support of U.S. manufacturing often hear opponents claiming that the over-regulated U.S. labor market and unionized heavy industry render us uncompetitive in global markets.

That may sound convincing given competition from emerging markets, but there are lots of advanced economies with long records of positive net exports, while we continue to run large deficits in manufactured goods, year after year.

If you’re thinking the difference must be prices, you’re thinking like an economist… and you’re pretty much wrong.

This new BLS report (including a link to their rockin’ new dashboard — go BLS!) provides the data in the form of manufacturing compensation costs across countries, with conversions to dollars using market exchange rates.

First, as shown in the first figure, in the most recent year for which they have complete data, we’re toward the low end of the advanced economies in terms of compensation costs. Second, in dollar terms, manufacturing compensation costs have increased much faster elsewhere over the past decade (figure two; these summary measures use trade-weighted currencies, based on each countries relative share of U.S. trade; you can use the dashboard link above (open the Excel file) to view individual countries).

*OECD, Eastern Europe, East Asia

Source: BLS (more…)

In Puerto Wilches, Colombia, an agreement has been reached between palm oil plantation workers who have been on strike for two months, employers and the government of Colombia.

The agreement will protect the workers from retaliation—there were reports that military and counter-terrorism police were gathering and workers feared a crackdown. Colombia is the most dangerous country in the world for trade unionists, with 22 killed already this year.

It also commits the Colombian government to enforcing its labor laws to ensure that the so-called labor cooperatives that workers must join to be employed at the plantations are not used to perform core, permanent functions on the plantation or undermine the workers’ rights, including the right of free association.

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Despite what the Supreme Court and Mitt Romney say, corporations aren’t people. (I’ll believe they are when Georgia and Texas start executing them.)

The Court thinks corporations have First Amendment rights to spend as much as they want on politics, and Romney (and most of his fellow Regressives) think they need lower taxes and fewer regulations in order to be competitive.

These positions are absurd on their face. By flooding our democracy with their shareholders’ money, big corporations are violating their shareholders’ First Amendment rights because shareholders aren’t consulted. They’re simultaneously suppressing the First Amendment rights of the rest of us because, given how much money they’re throwing around, we don’t have enough money to be heard.

And they’re indirectly giving non-Americans (that is, all their foreign owners, investors, and executives) a say in how Americans are governed. Pardon me for being old-fashioned but I didn’t think foreign money was supposed to be funneled into American elections.

Romney’s belief big corporations need more money and lower costs in order to create jobs is equally baffling. Big corporations are now sitting on $2 trillion of cash and enjoying near-record profits. The ratio of profits to wages is higher than it’s been since before the Great Depression. And a larger and larger portion of those profits are going to top executives. (CEO pay was 40 times the typical worker in the 1980s; it’s now upwards of 300 times.)

But, hey, if the Supreme Court and regressive Republicans insist big corporations are people and want to treat them as American citizens, then why not demand big corporations take a pledge of allegiance to the United States?

And if they don’t take the pledge, we should boycott them. (Occupiers — are you listening?)

Here’s what a Corporate Pledge of Allegiance might look like:

The Corporate Pledge of Allegiance to the United States

The [fill in blank] company pledges allegiance to the United States of America. To that end:

We pledge to create more jobs in the United States than we create outside the United States, either directly or in our foreign subsidiaries and subcontractors.

If we have to lay off American workers, we will give them severance payments equal to their weekly wage times the number of months they’ve worked for us.

We further pledge that no more than 20 percent of our total labor costs will be outsourced abroad.

We pledge to keep a lid on executive pay so no executive is paid more than 50 times the median pay of American workers. We define “pay” to include salary, bonuses, health benefits, pension benefits, deferred salary, stock options, and every other form of compensation.

We pledge to pay at least 30 percent of money earned in the United States in taxes to the United States. We won’t shift our money to offshore tax havens and won’t use accounting gimmicks to fake how much we earn.

We pledge not to use our money to influence elections.

Companies that make the pledge are free to use it in their ads over the Christmas shopping season.

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Robert Reich served as the nation’s 22nd Secretary of Labor and now is a professor of public policy at the University of California at Berkeley. His latest book, Aftershock: The Next Economy and America’s Future, is now in bookstores. His earlier book, “Supercapitalism,” is out in paperback. For copies of his articles, books, and public radio commentaries, go to www.RobertReich.org.

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This entry originally appeared at Robert Reich’s Blog.

Excellent debate on CNBC featuring the Alliance for American Manufacturing’s Scott Paul about the currency manipulation bill.

Those who follow the rants from our business leaders and their allies in politics and the media have been struck by a disquieting cry in recent months. We have been repeatedly told that, even though we have more than 25 million people unemployed or underemployed, businesses are unable to find qualified workers.

For example, last week New York Times columnist Thomas Friedman took us to Illinois where Doug Oberhelman, the CEO of Caterpillar, one of the largest companies in the country, complained that he could not find qualified hourly workers for his manufacturing facilities. Oberhelman went on to complain that he also could not find engineering service technicians or even welders.

Friedman also recounted a conversation with Chicago’s new mayor, former Obama Chief of Staff, Rahm Emanuel. According to Friedman, Emanual complained about “staring right into the whites of the eyes of the skills shortage.” Friedman recounts a story from Emanuel about two young CEOs in the healthcare software business who claimed that they have 50 job openings today, but can’t find the people.

There are many other accounts like the ones in Friedman’s column of businesses who find their growth prospects stunted by their inability to hire good workers. There are two parts to this story that should bother people.

First, in spite of all the complaints in the media about businesses not being able to find good workers, this problem doesn’t seem to show up in the data. According to the Bureau of Labor Statistics, the overall ratio of job openings to existing jobs is just 2.3 percent. This is down by almost a third from its pre-recession level.

Mr. Oberhelman’s experience at Caterpillar doesn’t seem to be common among his peers; the job opening rate in manufacturing is just 2.0 percent. Even in professional and business services, the category that would likely include the workers that the software execs wanted, the job opening rate is just 3.5 percent, down by more than 25 percent from pre-recession levels. (more…)

It’s hard to believe that nearly four years into the worst Recession since the Second World War, while mired in a jobless recovery of unprecedented length and magnitude, we continue to hear that manufacturing jobs don’t matter.

Take, for example, the recent uninformed (and insensitive) remark of Steven Rattner, the President’s former co-auto advisor, that “restoring lost manufacturing jobs” is nothing more than “pervasive, politically attractive happy talk” (see “Let’s Admit It: Globalization Has Losers” by Steven Rattner, New York Times, 10-15-11). He went on to say — ironically given his prior administration position — that America’s “greatest strength… lies in service industries with high intellectual content, like education, entertainment, digital media, and financial services.”

The reality is that anyone rightly concerned about the current almost unprecedented real unemployment rate of more than 18 percent must first focus on resuscitating our depleted manufacturing sector.

It’s a recipe for economic disaster for an economy as large, complex and geographically far-flung as ours to have less than 20-25 percent of its workers in manufacturing and for the sector to not be contributing a similar percentage of GDP.

Yet as it is, only around 9 percent of Americans now work in manufacturing, and as a percent of GDP, the sector now provides just 11 percent of our total.

In 1955, the largest U.S. employer was the auto manufacturer General Motors, which had a unionized workforce with good pay and quality retirement and health benefits. Today, the top U.S. employer is Wal-Mart, which pays its employees a pittance and just last week announced a major cutback in its employee health benefits. How can anyone favor an economic system that assumes American workers will either have the education and ability to work at Goldman Sachs or Google, or be left to work forever with entry-level wages at Wal-Mart or McDonald’s — with no robust manufacturing sector in the middle? (more…)

Today, you can take action to stop Congress from approving job-killing trade deals with Korea, Colombia and Panama and tell Republicans and Democrats to put Americans back to work.

Join the AFL-CIO’s National Call in Day and dial 1-800-718-1008 and tell your lawmakers to stop these dangerous trade deals. You can also send your message via email by clicking here.

With 25 million Americans desperately looking for full-time work Congress should be spending its time on job-creating legislation like President Obama’s American Jobs Act, not job killing trade deals.

Also today, hundreds of workers from around the country will be on Capitol Hill to talk with their lawmakers about the trade deals that put corporations over people and profit over prosperity.

Here’s what’s wrong with these trade deals:

• The Korea agreement is the largest off-shoring deal of its kind since NAFTA. If enacted, it likely will displace 159,000 U.S. jobs, mostly in manufacturing. And its glaring loopholes would allow unscrupulous businesses to import illegally labeled goods from China and possible even from sweatshops in North Korea—potentially without any tariffs at all.
• In Colombia, one trade unionist is murdered nearly every week and almost none of the murderers are brought to justice. In 2010, 51 trade unionists were assassinated in Colombia—more than in the rest of the world combined. So far in 2011, another 22 have been killed, despite Colombia’s heralded “Labor Action Plan.” Would we reward a country where 51 CEOs were killed last year?
• And the Panama agreement has many of the problems of the other two deals, like deregulating big banks and letting foreign investors bypass U.S. health, safety labor and environmental laws. Panama is also a tax haven: a place where tax-dodging, money-laundering millionaires and billionaires hide their money.

Please take a few minutes today and call 1-800-718-1008 (or click here to e-mail) and tell Congress to stop the Korea, Colombia and Panama trade deals that will destroy U.S. jobs and decimate American manufacturing—and give a virtual blank check to foreign governments to trample on the rights of workers.

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This entry originally appeared at the AFL-CIO Now Blog.

The news that our trade with China has been bad for the American middle class has finally reached the U.S. Senate. On Monday, the Senate will take up legislation that would impose tariffs on Chinese goods so long as China depresses the value of its currency. Despite the partisan polarization that grinds lawmaking to a halt these days, the bill’s support is thoroughly bipartisan, with sponsors ranging from such conservative Republicans as South Carolina’s Lindsey Graham to liberal Ohio Democrat Sherrod Brown. The legislation is expected to clear the Senate’s 60-vote hurdle for a floor vote and move on to the House.

But the consequences can no longer be denied. Between 2001 and 2010, the U.S. trade deficit with China cost Americans 2.8 million jobs, according to a report by economist Robert Scott, issued last week by the liberal Economic Policy Institute. Most of those jobs — 1.9 million — were in manufacturing, and of those, almost half were in computers and electronics.

This wasn’t simply the consequence of China’s cheaper labor or more generous corporate subsidies. As China’s productivity soared during the past decade, the value of its currency should have risen correspondingly. Instead, China purchased dollars, which had the effect of depressing the yuan and making Chinese exports about 28 percent cheaper than they would be if the yuan had been allowed to appreciate, William Cline and John Williamson found in a study for the centrist Peterson Institute for International Economics.

Data like these have been floating around for years, of course. Until now, however, the Senate has remained largely impervious to the evidence of Chinese cheating and American decay. But elite opinion, which the Senate does heed, is finally catching up with mass opinion on whether losing our manufacturing base is a bad thing. An influential July 2009 article in the Harvard Business Review by economists Gary Pisano and Willy Shih argued that losing manufacturing meant losing our edge in innovation, that the relationship between research and production was reciprocal. This would not have come as news to Thomas Edison, but few on Wall Street or in corporate boardrooms the past two decades believed that America’s prosperity and dynamism required the retention and renewal of manufacturing.

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