Why Manufacturing Matters by Pat Choate (NAPSA)—The United Statesis losing its manufacturing capacity. These losses are reaching a tipping point, where even greater losses, coming evenfaster are possible. Already, the U.S. will import almost $400 billion more goods this year than it exports, by that, creating a major drag on future U.S. economic growth. Anotherresult is that the U.S. has lost 2.7 million good-paying manufacturing jobs since the summerof 2000. Choate ——————_ The majority of these displaced workers are ending up in jobs that have few benefits and less pay. Many of these people cannot find work anywhere, at any wage. Beyond trade and jobs, manufacturing matters to America for other vital reasons. Manufacturing growth, for instance, spawns more additional expansion than any other economic sector. Each $1 of final manufacturing output creates another $1.48 in related manufacturing and business ser- vices such as finance, construction, and transportation. The reverse, of course, is also true. A decline in manufacturing results in a contraction in those related activities. Manufacturing matters because U.S.-based manufacturers are responsible for two-thirds of all private Research and Development done in the United States. This R&D ripples through the economy as innovations that lead to new products, new production, and new jobs. But when manufacturers move their factories offshore, most companies also move their R&D, as well. For example, dozens of U.S. companies that have shifted their factories to China are nowrelocating their R&D there. Manufacturing matters for it provides a fifth or more of the total gross product of states such as the Carolinas. Replacing the income produced by manufacturing would require states such as California to create $165 billion of new economic activity annually. New York would have to create $77 billion and Texas $93 billion. The manufacturing base of those and other states were created over the past two centuries. Replacing such large economic contributors overnight, even over a decade, is virtually impossible. Manufacturing also matters to America because manufacturers pay 30 to 40 percent of all corporate taxes collected by the federal, state, and local governments. The current decline in state and local revenues in the United States can be traced largely to the concurrent decline of U.S. manufacturing. In sum, manufacturing matters to the people of the United States for it helps produce the taxes we pay, the jobs we need, the goods we consume, and the weapons we use for our national defense. We think manufacturing in America matters. What do you think? Mr. Choate is director of the Washington, D.C.-based Manufacturing Policy Project.
