Tonelson: Maine manufacturers need political might
Look, then leap, was the advice directed at attendees of the second annual summit of the Manufacturers Association of Maine. Keynote speaker and author, Alan Tonelson, advised Maine manufacturers to look at distressing data about the health of manufacturing, then leap into personal involvement in federal policy-making.
The summit, titled "U.S. Manufacturing: the Engine for Global Economic Recovery," was held Friday at the Clarion Hotel in Portland. Tonelson, research fellow at the U.S. Business and Industry Council and author of "The Race to the Bottom," presented manufacturers with two essential steps that the United States' manufacturing sector as a whole must take in order to overcome its current decline. First, he encouraged manufacturers to become much more politically active on a federal level -- reminding audience members that business environments are crucially shaped by decisions made not "at the table," but rather in Washington.
To emphasize the need for a manufacturer's physical presence at the site of decision-making, Tonelson pointed to President Obama's manufacturing representatives on the Economic Recovery Advisory Board: GE's Jeff Immelt and Caterpillar's Jim Owens -- two men whose concerns are far removed from those of small American business owners.
Tonelson's second point circled the issue of what he considers the "mismanagement" of U.S. trade policy, which, in its emphasis on promoting offshore opportunities, frequently benefits U.S multinational companies (such as GE and Caterpillar) while draining production from local economies. "Trade policy needs a thorough overhaul ... Washington will not do this on its own," he said. Once American manufacturers have arrived in the capitol, they must adopt a "louder voice and a more constant presence" in federal trade policy decision-making.
Following these two points, Tonelson revealed some alarming numbers, beginning with the information that last August, for the first time in about 26 years, the overall manufacturing wage sank below the overall service sector wage. Between 1997 and 2008, Maine manufacturing grew by only 9.13% (adjusted for inflation) compared to overall growth of manufacturing in the United States of 29.75%. Whereas Maine's durable goods sector of the GDP grew by 53.32% (less than but comparable to the U.S. figure of 63.08%), nondurable goods (which includes paper) fell by 21.67% compared to the U.S. average, which shrunk only 3.57%. Tonelson expressed his confidence that 2009 numbers will show further deterioration.
Tonelson, who sees the recession as a result of the widening gap between what we produce and what we consume, referred to U.S. consumption as "the goose that has laid everyone else's golden eggs." Production that is happening elsewhere must move back within U.S. borders in order for the economy to thrive. As Tonelson said plainly, "Manufacturing matters desperately."
Tonelson also views manufacturing as "a lot more than job headcounts." He reminded listeners that viable industries are an essential component of bringing money into a geographic area, and encouraged his audience to view manufacturing in a broader and more significant sense: as the "engine for global economic recovery." Tonelson noted that "manufacturing must grow not only in an absolute sense, but also relative to the rest of the economy. This is the only way that manufacturing wages will return to be higher than service wages."
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