February 28, 2014    Volume 21, No. 3

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The Great Disconnect: Americans Want Washington To Deal With Manufacturing, But Washington Is Not Responding

By Richard A. McCormack

There is a wide disconnect between the American public and policymakers in Washington, D.C., on the importance of manufacturing to the U.S. economy and the need for action to restore American industrial competitiveness.

Americans fully support new policies to rebuild the U.S. manufacturing base, with overwhelming majorities of Republicans, Democrats and Independents saying that bad policies from Washington, especially those regarding trade, are the primary cause for most of the lost manufacturing jobs.

Americans have become cynical about Washington's willingness to act to restore the U.S. manufacturing sector, saying that any talk from politicians about the importance of manufacturing "is lip service," according to a survey of 1,200 American voters.

The number of Americans who believe that Congress and Pres. Obama are committed to restoring American industry continues to plummet. There might be a lot of talk about "reshoring," but only 13 percent of Americans see manufacturing jobs coming back from overseas.

The majority of Americans polled in January said their greatest economic concern was that the United States has lost too many manufacturing jobs and that too many jobs "are being shipped overseas."

The survey of voters conducted by the Mellman Group and North Star Opinion Research found that 47 percent of Americans said that President Obama is doing "a great deal" to help create American jobs, down from 56 percent in 2012; 40 percent said Democrats in Congress are doing a great deal to create American jobs (down from 46 percent in 2012); and only 28 percent said that Republicans in Congress are doing a great deal to create American jobs, down from 39 percent in 2012.

Similar attitudes prevailed when asked whether politicians were enforcing trade laws.

A majority of voters are skeptical about President Obama's goal of creating one million manufacturing jobs.

Much of the disconnect between Americans and their political representatives has been caused by the ideological divide in Washington, D.C.; by the election of politicians who are so far to the left or right that they cannot comfortably sit together, much less agree to policy proposals that would rekindle American industry. There is also an undue amount of leverage held over politicians by interests such as the Club for Growth, which has worked against legislation such as ending foreign currency manipulation. With a lot of campaign cash, these groups wield a lot of influence over legislation, effectively blocking it from reaching the floors of the House and Senate where it would likely pass.

But the grip of free-trade proponents analysts and columnists is easing, notes Scott Paul, president and CEO of the Alliance for American Manufacturing, which sponsored the poll. In the last presidential Republican primary season, Jon Huntsman took the view that the United States should not get tough with China, and he was trounced by voters. Rick Santorum put a "Made in America" sign on his podium. Mitt Romney tried to outflank Obama on the China issue. Moreover, current Obama administration trade initiatives -- the Trans Pacific Partnership and Trade Promotion Authority -- are grinding to a halt, as Americans have revolted and politicians assess whether those agreements are good for American workers.

The poll found that Americans are disturbed by the rhetoric on free trade. Americans say that the United States is "getting screwed," that China is cheating and that free trade "is one of the reasons why we are having this outsourcing," says pollster Michael Bloomfield, executive vice president and managing director of the Mellman Group. "They see the connection quite clearly" with job loss and free trade. "They really understand it. They may not understand currency manipulation and how it works, but their number-one concern at a visceral level is that it is hurting manufacturing."

When asked, "which of the following industries is the most important to the strength of the American economy?" 32 percent of Americans said "manufacturing," followed by 19 percent saying "high tech and knowledge industries," 12 percent saying health care, 11 percent saying agriculture, 8 percent saying housing and construction, 6 percent saying finance, and 4 percent saying services and retail.

When asked the single biggest obstacle to creating manufacturing jobs in the United States, 30 percent of the 1,200 voters said that U.S. trade policies encourage outsourcing; 25 percent said it's too expensive to manufacture in America; 15 percent said the country does not have a plan to compete against Germany and China; 13 percent said there is a shortage of skilled workers; and 9 percent said that manufacturing is more automated so there is less need for workers.

"Voters reject the idea that other sectors like high tech or services can replace manufacturing," according to the survey. Only 34 percent of Americans agreed with the statement that "the strength of the America economy is innovation and competition -- and if manufacturing leaves, we will move into new areas like high tech or services which will take its place in the future."

Sixty-two percent of Americans agreed with this statement: "Manufacturing is the single most important part of the economy and we need a manufacturing base here if this country and our children are to thrive in the future."

With 88 percent of Americans agreeing with the statement that "American manufacturing means American jobs," the survey found that "support for American manufacturing and manufacturers is nearly universal."

Ninety-five percent of those surveyed view products made in America favorably (with 3 percent unfavorably); 86 percent view American manufacturing companies favorably (and 6 percent unfavorably). American-made products should have an advantage over those made in China: 31 percent of Americans view products made in China "unfavorably" and another 41 percent view them "very unfavorably." Only 24 percent of Americans view products made in China favorably.

Most Americans "don't want to hear about 'advanced manufacturing,' " the survey found, with 44 percent agreeing with the statement: "All manufacturing is advanced -- they need to stop trying to come up with new language and focus on strengthening all of manufacturing."

"Majorities across all demographics want to see the U.S. get tough with China and Japan to stop unfair trade," with 60 percent saying "get tough with China and Japan and use every possible legal means to stop their unfair trade practices, including currency manipulation which will keep undermining our economy and taking away our jobs unless we get tough now"; and 30 percent agreeing with this statement: "We don't want to start a trade war with China -- tariffs and trade wars led to the Great Depression, and China and Japan are huge markets for American goods with three times more consumers than we have in America."

Republican voters were more in the category of "get tough" with China and Japan (64 percent versus 26 percent favoring "tread lightly") than were Democrats (58 percent saying "get tough" to 33 percent saying "tread lightly").

When it comes to why so many manufacturing jobs have been lost, Americans believe it is due to outsourcing (65 percent), versus 28 percent saying it was due to fewer skilled workers. Moreover, 50 percent of voters believe that manufacturing jobs are still leaving the country, versus 13 percent saying they are coming back and 27 percent saying that it's equal. "Participants were generally unaware of insourcing," says the survey.

Most Americans (84 percent) support the adoption of a national manufacturing strategy that is focused on tax, education and trade policies (with 7 percent opposed to such a policy);

  • 90 percent favor increased investment in retraining and education;

  • 87 percent favor more aggressively enforcing trade agreements;

  • 88 percent favor more promotion of American exports and a crackdown on unfair or subsidized imports;

  • 87 percent favor more tax incentives to invest in new equipment and plants for manufacturing;

  • 87 percent favor regulations that force governments to buy American-made products;

  • 85 percent favor tax breaks for jobs that companies bring back from overseas;

  • 83 percent favor making the R&D tax credit permanent only if its use leads to "products that will be made in America";

  • 83 percent favor increased investment in infrastructure such as roads, high-speed rail and a smart electric grid;

  • 78 percent said the U.S. should penalize nations such as China that manipulate their currency and cheat on trade agreements;

  • 75 percent said the U.S. should impose tariffs on products from China until they stop unfair trade practices including manipulating their currencies; and

  • 72 percent said the government should give American manufacturers a bigger tax cut and give high-tech manufacturers double the tax deduction for making products in the United States.

The poll results are located at http://american manufacturing.org/files/2014.Summary.AAM_.National.Poll_.pdf.

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