As Jobs Come Home, It's Time to Examine Tax CodeIt was classic White House political theater, designed to burnish the president's image in an election year. President Barack Obama invited executives to Washington, D.C., last week to hail "insourcing" — the moving of jobs back to the United States from overseas. Don't misunderstand us: There's certainly nothing wrong with Obama highlighting what clearly is a positive move for companies and their employees. Master Lock, for instance, has brought back about 100 jobs to its Milwaukee factory over the past 18 months from offshore locations. Higher Chinese labor costs, labor unrest, theft of intellectual property and higher shipping costs all are playing a role in such decisions. So is the American worker's productivity and well-deserved reputation for hard work. But let's be frank: Insourcing remains a trickle compared with the deluge of jobs that have left for distant shores or simply been cut by automation as companies were forced to find ways to become more competitive during a particularly rough patch for manufacturing. A recent White House paper notes that from 2001 to 2007, the nation's manufacturers trimmed more than 3 million jobs and that real net investment in manufacturing capacity stagnated. The federal Bureau of Labor Statistics reports that manufacturing job losses accelerated during the Great Recession, totaling more than 2 million employees — 15 percent of the sector's workforce. Since the recession ended, fixed investment has grown and manufacturing employment is rising. That's good news for a manufacturing-intensive area such as southeastern Wisconsin. But clearly, we have a long way to go to recover the jobs that were lost. One thing we'd like to see the president talk more about is tax policy — both for corporations and individuals. We think that lower rates (with fewer sweetheart deals) could both attract more investment to these shores and produce more revenue for the government. The president's own fiscal commission recommended in late 2010 "establishing a single corporate tax rate between 23 percent and 29 percent." Lowering rates would put the U.S.
Obama last week announced a series of modest steps to boost insourcing, including more marketing to potential investors in the U.S. and an effort to better sell the Small Business Administration insourcing loans program. Obama deserves some credit for pressuring China to stop manipulating its currency to the detriment of American producers. But the U.S. trade imbalance with China continues to be a major problem. In November, the imbalance was $272 billion, putting it on track to surpass last year's record. That's money out of the America economy, and accounts for a sizable share of manufacturing job loss. A big challenge in Milwaukee and other places will be finding enough skilled labor to work in the sort of advanced manufacturing that increasingly characterizes the industry in this region. Master Lock Chief Executive John Heppner made that point during a White House panel discussion last week. "The skilled labor workforce is aging, and the number of young people exposed to skilled labor trades through education or family and friends is declining," he said. Heppner is right, but that's a responsibility that Heppner and his company — along with state and local governments — need to meet. Both business and government have a responsibility to ensure the labor force remains competitive — and plentiful. The White House argues that the U.S. will become an increasingly attractive option for manufacturing work as costs rise overseas and our own costs fall. We hope the administration is right. And we, too, believe in cheering anytime a company analyzes its strategy and chooses to make its goods in the U.S. But the government would get a bigger bang for the buck, in our view, by reforming the tax code. REPRINTED FROM THE MILWAUKEE JOURNAL SENTINEL DISTRIBUTED BY CREATORS.COM
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