President Obama’s plan to lure manufacturing jobs back to the United States includes an array of tax breaks, worker education programs and increased enforcement of existing trade laws.
The proposal, outlined in the State of the Union address, did not impress many economists. They argue that the manufacturing industry offers limited growth potential and relatively few jobs. After 30 years of decline and a loss of 7.5 million jobs, 330,000 new manufacturing jobs were added to the economy over the past two years.
Manufacturers originally moved jobs overseas in search of lower wages and fewer regulations. Recently, countries such as China and India have seen workers wages rise. Coupled with a weakened dollar and higher shipping costs, conditions are ripe to return manufacturing jobs to America, according to Obama administration officials.
Some economists warn that manufacturers may continue to move manufacturing jobs overseas due to the higher wages American workers command. Others argue that the United States is more competitive without the low-wage, unskilled manufacturing jobs and the country should focus on improving the skill levels of manufacturing workers.
The total amount of jobs in play is debatable. As manufacturers streamline and automate their processes, fewer workers are required. When asked if the government should use taxpayer dollars to boost what appears to be an enterprise that offers diminishing returns, White House officials countered that even modest job gains can make a noticeable impact on the economy.
European and Asian nations already offer incentives to their manufacturers, but the concept is relatively new in the United States. The White House says that the final package may include some mixture of:
• Tax cuts for goods produced by American workers
• Ending tax breaks for companies that move jobs outside America
• Stronger enforcement of intellectual property rights
Read more at The New York Times.