Manufacturing: Why It STILL Matters

tt-manufacturing.jpgManufacturing matters because it is a vital contributor to the economic health and wealth of our nation. It matters because it provides high-wage jobs, commercial innovation (the nation’s largest source), a key to trade deficit reduction, and a disproportionately large contribution to environmental sustainability. The manufacturing industries and firms that make the greatest contribution to these four objectives are also those that have the greatest potential to maintain or expand employment. These areas include:  Computers and electronics, chemicals (including pharmaceuticals), transportation equipment (including aerospace and motor vehicles and parts), and machinery are especially important.

New Jersey needs a manufacturing policy that will enable more firms to adopt high-road strategies and help existing high-road firms to expand. Such a policy must address four major challenges that modern manufacturing faces: R&D support, worker training, financing of productive investment, and reconstituting mechanisms for creating and sharing productivity improvements for workers, unions and government. 

These are the challenges that require a strategic vision underscored by an initiative — a tactical plan, if you will — that will help us regenerate our manufacturing industry in New Jersey.

With that in mind, I have introduced three initiatives that would help us reach these ambitious but reachable goals.

The first proposal, A-3265, would:

  • Establish a New Jersey Advanced Manufacturing Council that would be charged with four specific goals. The council would:  

  • Convene and enable industry-led, private-public partnerships focused on engaging New Jersey institutions of higher education in manufacturing innovation.

  • Design and implement an advanced manufacturing initiative to facilitate collaboration and information sharing across state departments and agencies.

  • Assist private companies to scale up production for technological transfers and to help companies overcome technical obstacles to scaling up production of new technologies.

  • Submit an annual report to the governor, the legislature and the state employment training commission for an assessment and recommendations

The goal is to create a brain trust of the best and brightest in the manufacturing sector to help lead us forward into the next century.

The second proposal I’ve introduced is A-3273. This initiative establishes a manufacturing and metal trade apprenticeship tax credit program. This is a financial incentive to manufacturing companies that offer qualified machine and metal trade apprenticeships a tax credit of 50 percent of an apprentice’s wages, but not to exceed $7,500 per apprentice. To qualify, firms must employ an unskilled or semi-skilled person in the machine tool or metal trades for no less than 1,500 hours for the period to which the tax credit applies. There is a limit of four tax years.

This bill directly offers a reasonable financial incentive to both employer and employee in New Jersey’s manufacturing industry.

The third proposal, A-5083, would establish a “Higher Education Manufacturing Grant Program” for public institutions of higher education to re-establish or expand programs in manufacturing fields.

This grant program would award $10 million to New Jersey public institutions of higher education in establishing or expanding programs in the manufacturing field. The financial incentive is important because it serves as “seed money” for public institutions that have the interest, willingness and ideas to create a more hospitable environment for increasing manufacturing in New Jersey. This bill will help ease some of the financial burden to bring a program to life.

This initiative is an investment in the future of the manufacturing industry by creating funds for educational programs to confront serious manufacturing issues.

Some might question whether this effort is worth it. This is the school of thought that suggests manufacturing in our country has past it’s time. They say that manufacturing will never return and that in a new-age, digital economy, it is unnecessary.

This is patently false, and experts who studied these issues and have weighed in on them would suggest that we need a manufacturing sector in this country and in New Jersey.

“We are now in the ‘post-industrial’ economy, and I totally disagree with the view that the loss of manufacturing is nothing to worry about or that the service economy will continue to create prosperity in America,” according to Michael Collins, writing in Industry Week and the author of “Saving American Manufacturing.” “I make the case that America must halt the decline of manufacturing, because it will lead to higher unemployment, fewer family wage jobs and the decline of living standards for most workers. Wages and household income peaked in 1972 when manufacturing was 23 percent of U.S. GDP. The decline of manufacturing to 12 percent of GDP has coincided with a steady decline in wage and income levels for most of the middle class.”

Closer to home, New Jersey had a history linked to a vibrant and welcoming manufacturing economy. “At one point during the past century, half of the state’s jobs were in manufacturing, as industries like textiles and telecommunications boomed,” according to John Reitmeyer in a recent NJ Spotlight article. “Although there’s been a decline since then, manufacturing is still a $40 billion industry in New Jersey, with more than 10 companies employing an estimated 360,000 people.”

We can reinvigorate manufacturing in New Jersey. It will take a well-thought-out plan, confidence in our mission and patience. These three ideas, coupled with a greater emphasis on technical workforce development, offer a platform for the rebirth of manufacturing in New Jersey. Let’s begin now. That’s my take, what’s yours?

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