Thursday, October 4, 2012

AMERICA'S UNEMPLOYMENT CRISIS: A SURVEY OF THE ISSUES AND STATISTICS



                                                          

                                                 
 The extraordinary impact of unemployment levels unprecedented since the Great Depression is arguably the most dire domestic crisis facing the American people. In this  edition, we begin a multi-week examination of a dilemma that has eluded all attempts at resolution by the current administration. We begin with a recitation of the statistics that reveal the extraordinary extent of the problem. 
  
The Statistics

   The current  unemployment rate is 8.1%. Factcheck.org notes that when public sector jobs are included in the total, America has experienced a net decrease of 316,000 jobs since President Obama's inauguration.  

   At the start of the Obama administration, unemployment was 7.8%.  Despite vast sums spent on President's stimulus package, it has never been below 8% during his administration. This year, the rate reached 8.1% in April, but rose again to 8.3 before returning to 8.1 in August. Most analysts believe the only reason it dipped back to 8.1 from almost 8.3 was because the unemployed gave up looking.

  The percentage of Americans working or actively looking for work has descended to 63.5%, the worst number since 1981. 

  According to the Washington Post, there are about 3.7 job seekers for every opening.
  
  The number of Americans working part time because they couldn't find full time positions rose to 9.3 million from 8.8 million. This means the total underemployment rate, including both the unemployed, the forced part timers, and those who have given up, is to 16.5, an increase from 16.2% the prior month, according to a USA Today study. 

  Most worrisome, the number of long term unemployed (those jobless for 27 weeks or more) is 5 million, or 40% of the unemployed.  Both the civilian labor force (154.6 million) and the labor force participation rate (63.9%) declined in August. the employment-population ratio is 58.3%.  There are 844,000 "discouraged workers"-- those who have given up looking. 

 Job growth has gotten worse in 2012, averaging 139,000 per month compared to  153,000 in 2011. Much of the very limited growth was in low paying jobs such as leisure and food.  Manufacturing edged down in August.  Average hourly earnings went down 0.1%, and "real average hourly earnings" fell 0.7% in August, according to the Bureau of Labor Statistics.   12.5 million workers remain idled, according to the National Conference of State Legislators.

  As this report went to press, the number of jobless claims held near two month highs and the 4 week moving average for new claims rose by 2,000 to 377,750, according to a CNBC study.  It was the fifth consecutive weekly increase.  The rate of growth in jobs went down in the latest report.  Altogether, numbers this bad haven't been seen since the Great Depression.

 Well-paid manufacturing jobs declined 15,000, the first decline since September of last year, according to a Yahoo!finance report.  

  Average weeks unemployed rose to 39.2 from 38.8.  The meager reduction in the unemployment rate "is not so much in jobs created, but instead people dropping out of the labor force" according to Hamilton Place Strategies.  

The Economy

  Writing in the Wall Street journal, Mortimer Zuckerman notes that average wage increases have dropped to 1.6%, the lowest in the past 30 years.  He also expressed concerns that of the paltry number of private sector jobs available, 40% are in low paying categories. Zuckerman believes that we are experiencing a modern-day depression. California's Democrat Rep. Henry Waxman, as quoted in Beltway Confidential, also calls the current economic climate a depression.  Josh Mitchell, also writing in WSJ, notes that the median annual household income fell in 18 states in 2011 from a year earlier after adjusting for inflation.

  The economy is not growing fast enough to produce adequate number of jobs.  From April-June, job creation rose only 1.7%, down from 2% in Jan.-March and way down from 4.1 in the final quarter of last year, according toHuffingtonpost.

   According to Sentier Reserch, the median household income in August fell 1.1% to $50,678.  "The August decline in real median annual household income is indicative of a struggling economy. Even though we are technically in an economic recovery, real median annual household income is having a difficult time maintaining its present level, much less "recovering."

   While real income may have declined, costs went up. The CPI rose 0.6% in August, gas index rises 9.0%, according to the Bureau of Labor Statistics.  

   The Associated Press reports that, home ownership has dropped to 64.6%, the worst level in over ten years. 14.9 million, or 13% of all American households, received food stamps-the highest level ever.  The official poverty rate is a record 15%, 46.2 million people.   

  Despite an extraordinary $787 billion spent in "stimulus" spending, the economy has not only stagnated but actually gotten worse in many areas. 

   According to William C. Dudley, President and Chief Executive Officer of the Federal reserve Bank of New York:
 "The performance of the U.S. economy since the end of the recession in 2009 has been disappointing.  Real GDP has grown at an annual rate of just over 2 % over this period, and it was even slower in the first half of 2012.  As a result...unemployment remains above 8 percent-an unacceptably high level-and participation in the jobs market remains depressed.  Moreover, about 5 million workers have been unemployed for six months or more.  This is important because long term unemployment can cause job skills to atrophy making it more difficult for such people to find jobs in the future.  While the good news is that the job-finding rates of the long-term unemployed have not deteriorated as many feared, we ought not to take this for granted going forward."
  
   Over three years after the technical end of the recession, the share of Americans working continues at near-depression levels.

   The US Commerce Department reports that:

   New orders for manufactured durable goods in August 2012 decreased 13.2 percent to $198.5 billion.

   Excluding transportation, new orders fell 1.6 percent. Overall shipments fell 3.0 percent. Capital goods shipments declined 1.7 percent. Unfilled orders fell 1.7 percent. And inventories grew 0.6 percent in August. This is the largest decrease since January 2009.  

   Excluding transportation, new orders decreased 1.6 percent.  Excluding defense, new orders decreased 12.4 percent. 

    Shipments of manufactured durable goods in August, down two of the last three months, decreased $6.8 billion or 3.0 percent to $222.5 billion.  This was also the largest decrease since January 2009 and followed a 1.9 percent July increase.  

  Transportation equipment, down two of the last three months, had the largest decrease, $5.5 billion or 7.9 percent to $63.9 billion. Unfilled orders for manufactured durable goods in August  decreased $16.9 billion or 1.7 percent to $978.7 billion.  This was the largest decrease since December 2009. Transportation equipment had the largest decrease, $12.0 billion or 2.1 percent to $568.6 billion.  

  Non-defense new orders for capital goods in August decreased $18.5 billion or 24.3 percent to $57.7 billion.  Shipments decreased $1.2 billion or 1.7 percent to $69.5 billion.  Unfilled orders decreased $11.9 billion or 2.0 percent to $580.5 billion.  Inventories increased $1.5 billion or 0.9 percent to $171.9 billion.  

  Defense new orders for capital goods in August decreased $4.1 billion or 40.1 percent to $6.1 billion.  Shipments decreased $0.1 billion or 1.7 percent to $8.1 billion. 
Summary of the statistical overview

   The indications are clear.  The current state of the economy is too weak to support real job growth. Issues such as the failed stimulus program, uncontrolled deficit spending, excess regulations, the highest corporate taxes in the developed world, uncertainty over personal taxes, excess regulations, a partisan NLRB, international trade practices and defense spending reductions are all taking a serious toll on the American economy. We'll review those issues as this series continues. 

America's Manufacturing Crisis


An Industry At Risk

  "The nation's historic leadership in manufacturing...is at risk.  Manufacturing as a share of national income has declined, as has manufacturing employment, and our leadership in producing and exporting manufactured goods is in question."
The President's Council of Advisors on Science and Technology's June 2011 "Report to the President on Ensuring American Leadership in Advanced Manufacturing" (Leadership Report.) It has been largely ignored by the White House.

A SHRINKING QUARTER

   American manufacturing has shrunk for the third straight month, the worst contraction since July 2009.  Key indicators such as new orders, production, backlogged orders, and employment contracted, according to the Institute for Supply Management (ISM). The weakest production index (47.2, down from 51.3 in July) since May 2009, a weak new orders measure (47.1, down from 48 in July) and the lowest employment measure since November 2009 (51.6, down from 52 in July) have been reported.

  The only bright spots for this industry, (which accounts for about 11% of the U.S. GDP according to a Brookings Institute study, Why Does Manufacturing Matter) came from pent-up demands on items that consumers could no longer reasonably wait to replace, such as autos. 

  The dilemma that this produces for the depressed U.S. economy is of extraordinary importance.  According to the Federal Council on Competitiveness December 2011 report, Make: An American Manufacturing Movement:

   "U.S. manufacturing is more important than ever, employing more than 11 million Americans directly, and creating close to 7 million additional jobs in related industries.  Manufacturers contributed $1.7 trillion to the U.S. economy in 2010.  Manufacturing also boasts the highest multiplier effect among economic sectors, pays higher wages and drives innovation.  Manufacturing accounts for nearly 60 percent of U.S. exports, and those export-related jobs pay even higher wages than non-export related jobs."

  What happens when a factory closes? A Milken Institute review of American manufacturing reported in The American Prospect that "Close a manufacturing plant, and a supply chain of producers disappears with it." It noted that for every computer manufacturing job in California, 15 jobs outside the factory are created.

   The Leadership Report, which has been largely ignored by the White House, notes that "As U.S. manufacturing leadership is waning, other nations are investing heavily in growing and revitalizing their manufacturing sectors, and are crafting policies to attract and retain production facilities and multinational companies within their borders."

   The ISM Report concludes that "...our nation has surrendered important manufacturing sectors.  They were not all lost in the pursuit of cheaper labor or as a result of products becoming low margin commodities.  We have lost production of cutting-edge innovations developed in America because of tax, regulatory, skill, finance and infrastructure limitations that make production elsewhere more competitive."

  The traditional American role of leading the world in manufacturing output ended in 2010, when China produced slightly more.  For the first time, U.S. output represented less than 20% of the total world figure-coming in at about 18.24%, according to Tom Hemphill and Mark Perry, writing in Business Economics.   

  The impact on the American economy of a depressed manufacturing center is substantial.  As noted in the Brookings study, it provides above-average wages, promotes innovation by accounting for a lion's share of R&D spending, plays a key role in reducing the trade deficit, and contributes heavily to environmental sustainability.

 The NY Analysis examination of this issue indicates that American manufacturing is being detrimentally affected by a number of factors, including:
·   The highest corporate taxes among industrialized nations;
·   An increasingly burdensome regulatory regime;
·   A weak national and global economy
·   A downturn in federal support for cutting-edge R&D;
·   A slowdown in military procurement of major weapons systems;
·   The rise of China, with its cheaply paid labor force, and that nation's unfair competitive practices, as well as intellectual property theft;
·   An increasingly poorly schooled workforce; and
·   High energy costs.
TAXES

   On April 1, 2012, the United States gained the unwanted distinction of having the worst combined federal/state tax rate, at 39.2%, on the planet. Japan, formerly in first place, now comes in second at 38%, followed by France, Italy, Germany, Canada, and the United Kingdom. 

   The Competitive Enterprise Institute (CEI)  notes that "Our tax code is among the world's least friendly toward manufacturing."

  Numerous analysts and elected officials have recommended that Washington should reduce the corporate tax rate to 25%. Opponents to that concept maintain that existing loopholes allow at least some international business entities to pay less than the full rate, sometimes down to 29.2%, according to aCNNMoney study

  Consistently, the development of internationally competitive corporate tax rates, and reducing corporate payroll and income tax burdens on manufacturers investing and hiring in America, ranks as a key priority to improving manufacturing prospects within the nation.

   The prospects for reform remain unclear.  Republican presidential candidate Mitt Romney advocates  a 25% rate.  President Obama has proposed a rate of 28% but wants it tied in to other tax increases and closing current breaks, which may eliminate the benefit of the lower rate. This places him at odds with the Council on Competiveness recommendation of replacing the current world-wide double taxation system.

 First of a three part series    
MANUFACTURING 

An Industry At Risk

  "The nation's historic leadership in manufacturing...is at risk.  Manufacturing as a share of national income has declined, as has manufacturing employment, and our leadership in producing and exporting manufactured goods is in question."
The President's Council of Advisors on Science and Technology's June 2011 "Report to the President on Ensuring American Leadership in Advanced Manufacturing" (Leadership Report.) It has been largely ignored by the White House.

A SHRINKING QUARTER

   American manufacturing has shrunk for the third straight month, the worst contraction since July 2009.  Key indicators such as new orders, production, backlogged orders, and employment contracted, according to the Institute for Supply Management (ISM). The weakest production index (47.2, down from 51.3 in July) since May 2009, a weak new orders measure (47.1, down from 48 in July) and the lowest employment measure since November 2009 (51.6, down from 52 in July) have been reported.

  The only bright spots for this industry, (which accounts for about 11% of the U.S. GDP according to a Brookings Institute study, Why Does Manufacturing Matter) came from pent-up demands on items that consumers could no longer reasonably wait to replace, such as autos. 

  The dilemma that this produces for the depressed U.S. economy is of extraordinary importance.  According to the Federal Council on Competitiveness December 2011 report, Make: An American Manufacturing Movement:

   "U.S. manufacturing is more important than ever, employing more than 11 million Americans directly, and creating close to 7 million additional jobs in related industries.  Manufacturers contributed $1.7 trillion to the U.S. economy in 2010.  Manufacturing also boasts the highest multiplier effect among economic sectors, pays higher wages and drives innovation.  Manufacturing accounts for nearly 60 percent of U.S. exports, and those export-related jobs pay even higher wages than non-export related jobs."

  What happens when a factory closes? A Milken Institute review of American manufacturing reported in The American Prospect that "Close a manufacturing plant, and a supply chain of producers disappears with it." It noted that for every computer manufacturing job in California, 15 jobs outside the factory are created.

   The Leadership Report, which has been largely ignored by the White House, notes that "As U.S. manufacturing leadership is waning, other nations are investing heavily in growing and revitalizing their manufacturing sectors, and are crafting policies to attract and retain production facilities and multinational companies within their borders."

   The ISM Report concludes that "...our nation has surrendered important manufacturing sectors.  They were not all lost in the pursuit of cheaper labor or as a result of products becoming low margin commodities.  We have lost production of cutting-edge innovations developed in America because of tax, regulatory, skill, finance and infrastructure limitations that make production elsewhere more competitive."

  The traditional American role of leading the world in manufacturing output ended in 2010, when China produced slightly more.  For the first time, U.S. output represented less than 20% of the total world figure-coming in at about 18.24%, according to Tom Hemphill and Mark Perry, writing in Business Economics.   

  The impact on the American economy of a depressed manufacturing center is substantial.  As noted in the Brookings study, it provides above-average wages, promotes innovation by accounting for a lion's share of R&D spending, plays a key role in reducing the trade deficit, and contributes heavily to environmental sustainability.

 The NY Analysis examination of this issue indicates that American manufacturing is being detrimentally affected by a number of factors, including:
·   The highest corporate taxes among industrialized nations;
·   An increasingly burdensome regulatory regime;
·   A weak national and global economy
·   A downturn in federal support for cutting-edge R&D;
·   A slowdown in military procurement of major weapons systems;
·   The rise of China, with its cheaply paid labor force, and that nation's unfair competitive practices, as well as intellectual property theft;
·   An increasingly poorly schooled workforce; and
·   High energy costs.
TAXES

   On April 1, 2012, the United States gained the unwanted distinction of having the worst combined federal/state tax rate, at 39.2%, on the planet. Japan, formerly in first place, now comes in second at 38%, followed by France, Italy, Germany, Canada, and the United Kingdom. 

   The Competitive Enterprise Institute (CEI)  notes that "Our tax code is among the world's least friendly toward manufacturing."

  Numerous analysts and elected officials have recommended that Washington should reduce the corporate tax rate to 25%. Opponents to that concept maintain that existing loopholes allow at least some international business entities to pay less than the full rate, sometimes down to 29.2%, according to aCNNMoney study

  Consistently, the development of internationally competitive corporate tax rates, and reducing corporate payroll and income tax burdens on manufacturers investing and hiring in America, ranks as a key priority to improving manufacturing prospects within the nation.

   The prospects for reform remain unclear.  Republican presidential candidate Mitt Romney advocates  a 25% rate.  President Obama has proposed a rate of 28% but wants it tied in to other tax increases and closing current breaks, which may eliminate the benefit of the lower rate. This places him at odds with the Council on Competiveness recommendation of replacing the current world-wide double taxation system.

 Second of a three part series    


 Part one of our review of the crisis facing America's manufacturing sector outlined the decline in the industry, and the impact of an uncompetitive tax structure
  

The Impact of Regulations, High Energy Costs,
Inadequate Education

   Regulations

   Regulatory burdens are a key factor depressing manufacturing in the United States.  Kevin Williamson recently wrote in National Review that the cost of regulatory compliance--which may be between one and two trillion dollars annually--is a bigger burden than taxes. He noted that, in addition to the cost, the regulatory burden is more infuriating because "you can boot out your representative if he votes for a tax hike, but you can't vote out executive-branch bureaucrats."  In many cases, the regulatory system is geared against the very type of ingenious, highly productive new firms the nation needs to rejuvenate its industrial base in favor of politically connected older companies with the capital to hire powerful lobbyists to influence politicians. 

   While American manufacturing has been enduring difficult times for over a decade, the increasing burden of regulations over the past three years, particularly those relating to the environment, have contributed heavily to the acceleration of the crisis.

   Ben Lieberman, writing for the  Competitive Enterprise Institute, notes that "...the biggest recent change--and the most worrisome threat for American manufacturing--has been the accelerated pace of environmental regulation since the election of Barack Obama...Manufacturers worry about a storm of new regulations taking effect in the immediate future, any one of which would seriously harm them, and the cumulative effect of which would be the end of the United States as a major manufacturing nation."

   The recent (ignored by the White House) presidential study by the Council on Competiveness recommends: 

1. Congress should require agencies to begin reducing the costs and burdens of current and proposed regulations.
2. Congress should immediately reform section 404 of the Sarbanes-Oxley Act to increase entrepreneurs' access to U.S. public capital markets and grow new companies.
3. Congress should reduce the costs of tort litigation from the current level of almost 2% of GDP -some $248 billion-down to 1% by 2020.
4. Congress and the Administration must take action on fiscal reform to achieve $4 billion in debt reductions by 2021.

   CEI notes that "The pace at which the Obama administration has issued new Clean Air Act regulations unrelated to carbon dioxide--most of them targeting manufacturers and the coal-fired power plants on which they (and many homes) depend for electricity--is without precedent in the statute's 40 year history..."  Estimates of compliance costs are in the trillion dollar range--if compliance can be done at all.  Some of the demands call for the purchase and implementation of technology that is not yet available. 

Legislation

   In response to the growing harm caused by the imposition of numerous regulations, and the anger engendered by the fact that many dramatic alterations to our economy have resulted not from legislation but by executive branch bureaucrats, the House of Representatives has passed H.R. 10: Regulations From the Executive in need of Scrutiny Act, better known as REINS. The bill is not expected to pass the Senate and would certainly be vetoed by President Obama if it ever did.  With only minor exceptions, the vote on the bill followed straight party lines, with Republicans favoring it and  all but four Democrats voting against it. 

   The legislation, which is intended "to increase agency accountability for and transparency in the federal regulatory process" is a direct challenge to the White House's excessive rulemaking activities.  It is also a specific rebuke to the Environmental Protection Agency's overzealous and often poorly thought out rule making. 

  REINS would give Congress the ability to have a say in "major" rule additions or changes, and would require an analysis of how enforcement would impact employment.  It would also allow a court to review whether an agency has completed the necessary requirements for a rule to take effect. 

Energy

   The past three and one-half years have been difficult ones for domestic energy production and refinement, as the White House has blocked the Keystone pipeline, significantly stopped offshore drilling, kept ANWR off limits, and engaged in other activities limiting the use of American sources and the refining thereof.  The resulting cost of energy, both at the pump for motorists and in the factories for manufacturers, has been a drain on the economy in general and manufacturing in particular. These actions, combined with already burdensome regulatory issues, directly affects the viability of American manufacturing. 

   CEI notes that "it takes energy to run a factory, and rising energy prices tend to reduce manufacturing output.  Disproportionately high energy prices in one country encourage the outsourcing of manufacturing to others."

Education

   The U.S. Chamber of Commerce  reports that approximately 90% of jobs in the fastest growing occupations require some level of postsecondary education and training.  However, 80 to 90 million adults, about half the workforce, do not have the skills required to get or advance into "family-sustaining" wage jobs.

    But it's not just the lack of a degree.  Our primary and high schools are turning out individuals who are deficient in the basic skills necessary for manufacturing or other employment.  The problems begins early, according to the Chamber, with 8th graders not proficient in the most basic subjects, reading and math.  30% of students fail to graduate high school in four years, and those that do eventually graduate lack the skills needed for employment

  Last of a three part series    

 Part one of our review of the crisis facing America's manufacturing sector outlined the decline in the industry, and the impact of an uncompetitive tax structure.  Part Two reviewed the impact of excess regulation, inadequate education, and energy policy.
  
THE ROLE OF CHINA, 
ADVANCED TECHNOLOGY,
AND GOVERNMENT BIAS 

 China

   Richard McCormack, writing in the American Prospect, notes that "the U.S. manufacturing sector never emerged from the 2001 recession, which coincided with China's entry into the World Trade Organization." An article inForbes written by Professor Baizhu Chen notes that "The average manufacturing wage in 2010 [was] $2.00 in China and $34.75 in America." 

   The rise of China renders any obstacle to U.S. manufacturing growth even more counterproductive.  The  University of Chicago Law Schools notes that "Chinese exports were important in declining trends in the [US] manufacturing during the past 20 years."  

   In his testimony before the U.S. House Steel Caucus, Thomas Conway, International Vice President of the United Steel Union (USW) noted that "A greater and greater amount of manufactured goods is being imported and more and more U.S. companies are off-shore manufacturing.  The Economic Policy Institute estimates that our trade deficit with China alone from 2001-2008 caused the loss of 2.4 million manufacturing jobs here."

According to the Alliance for American Manufacturing, "China's blatant use of illegal government subsidies and a web of predatory trade practices on a massive scale are undercutting companies in the U.S.auto supply chain."

   Costs may be going up in China, however, reports The Economist."Costs are soaring, starting in the coastal provinces where factories have historically clustered.  Increases in land prices, environmental and safety regulations and taxes all play a part...labor costs have surged by 20% a year for the past four years."

  Beijing's intellectual property theft, and the propensity to demand technology transfer as a "cost of doing business" in China, renders the threat to American manufacturing, especially the crucial high technology sector, significant. NSA director Keith Alexander recently noted that China's espionage efforts have resulted in the greatest transfer of wealth in history.  This year, for the first time in U.S. history, an economic espionage trial was conducted, convicting a Chinese-born naturalized American citizen, Dongfan Chung, of stealing $2 billion in trade secrets related to Space Shuttle technology from Boeing.

 Advanced Technology & Defense

  Manufacturing is a research and development-intensive industry.  According to the Brookings study, "Domestic company R&D spending is 3.6% of domestic manufacturing sales, compared to 2.4% of domestic non-manufacturing sales...According to the National Science Foundation's 2008 Business R&D and Innovation survey, 22% of manufacturing companies but only 8% of non-manufacturing companies introduced a new or significantly improved good or service between 2006 and 2008."

  A drop in manufacturing eventually leads to a drop in R&D capability, which is crucial to America's future in the realms of both economy and defense. 
  
  Problems in American manufacturing can also be linked to the decline in two cutting edge areas: defense and aerospace technology.  The drop in American defense inventory has been nothing short of stunning: a navy that has lost over half its ships, an air force that has lost almost half of its combat wings, and an army that has been reduced from 18 divisions to 10.  The elimination of both the manned space program and the dwindling down of the robotic space program further eliminate the vital technology infrastructure and support so substantially needed for a healthy and advanced modern manufacturing industry.

  The national security crisis related to manufacturing is more than just the current weapons inventory, as terrible a threat as it is.  It also includes the capacity to grow our military might in times of crisis, the very capacity which allowed us to win World War II and the Cold War.

   The importance of this capacity has been recognized for over half a century, as noted by McCormack.  In 1948, Congress passed the National Industrial Reserve Act "based on the idea that the defense of the U.S. requires a national reserve of machine tools for the production of critical items of defense material."  Almost forty years later, President Reagan, despite being a leading advocate for free trade, supported a Voluntary Restraint Agreement with Japan and Taiwan on imports of machine tools based on national security grounds. 

   For reasons involving both cost and the lack of domestic capability, the Pentagon now looks overseas to supply some of its needs, including high technology items.  Dr. Joel Yudken's report entitled "Manufacturing Insecurity" notes that "Ironically, the Pentagon and industry calls for greater reliance on foreign sourcing--often argued in efforts to weaken Buy America requirements in defense procurement--are a tacit recognition that the United States lacks the commercial manufacturing capacity to supply vital products needed by America's defense industrial base.  The DoD has conceded that there are advanced technologies critical to military systems--armor plate steel, defense-specific integrated circuits, night vision goggles--for which domestic sources are inadequate."

Bias Against Industry

   The importance of a strong manufacturing sector to the American economy, to reducing the federal debt, to our national security, and to the employment rolls is obvious.  Why have so many elected officials and bureaucrats acted in a manner that has clearly harmed this industry? 

  The Washington Time's Paul Driessen has called the Environmental Protection Agency "the biggest single job-killing agency in government."  Kurt Bauer, writing in Wisconsin's Journal Interactive, notes that just one of EPA's new rules, Boiler MACT, would lead to the closing of 11 paper mills and the loss of 7,500 jobs in his state.  Similarly, Bauer notes the costly effects of the highly pro-union partisanship of the National Labor Relations Board. 

  Some observers attribute these actions to an archaic mindset that manufacturing is an industry of polluting, grimy factories providing low-paying, low-skill jobs that constitute an increasingly obsolete way of making a living. A whole panoply of clich├ęd capitalist vs. workers and anti-environment stereotypes, none of which are true, misinforms the biased view of current Environmental Protection Agency and NLRB bureaucrats.

   Making the openly hostile attitude of the Environmental Protection Agency under the Obama administration towards manufacturing more ironic is the fact that, as noted by the Brookings study, "manufacturing makes a disproportionately large contribution to environmental sustainability...the clean economy is nearly three times as manufacturing-dependent as the overall economy.  Of the clean economy's 2.7 million jobs, 26% are in manufacturing, compared to 9% of U.S. jobs overall.

   In great cities such as New York, this incorrect perspective has led to land use planning policies that have resulted in consistently high blue collar unemployment and an urban economy that is increasingly fragile.  

  New York City's Pratt Center for Community Development reports that "Even as the demand for goods in New York City remains strong, city government's own policies are threatening manufacturers' ability to do business here. When Mayor Bloomberg came into office in 2002, New York City had 12,542 acres of land where manufacturing businesses could legally operate. Today, thanks to zoning changes, it has fewer than 10,746, and another 1,800 acres would be converted to other uses under additional rezoning proposed by the Bloomberg administration.  If the planned rezoning goes through, New York City will have lost 20 percent of all its manufacturing space in the span of just a few years.  Of the 95 New York City rezonings from 2003 to 2008, one-quarter converted manufacturing districts into some other category of land use...not one added a single acre of new space for manufacturers."

Conclusion

The combined impact of excess regulation, ill conceived environmental controls, the highest tax rate among industrialized nations,  foreign competition (fair and unfair), and a reduced emphasis on military and advanced technology spending constitute an unprecedented challenge to the survival of American manufacturing.   
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