Policy Matters Blog

Manufacturing investments needed

by Admin on March 13, 2017
March 13th, 2017
   

Federal budget should make good on manufacturing promises

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Photo by Steve Cagan

On Thursday, President Donald Trump will release his federal budget plan. Although he campaigned on the promise of bringing back manufacturing jobs, it’s widely expected this budget will cut funding to programs that could grow the industry.

Research I did last January detailed strategies that could boost Ohio’s manufacturing sector. Innovation hubs and creating workforce development opportunities are top among them. Ohio supports both. Innovation hubs like Youngstown-based additive manufacturing network, America Makes, the first of its kind and only one based in Ohio, bring together manufacturers across the industry, in this case 3-D printing, to foster innovation.

Manufacturing innovation is supported by Ohio’s seven Manufacturing Extension Partnerships (MEPs), which provide technical assistance, training, technology and problem solving to manufacturers of all sizes.

Partnerships through hubs and MEPs provide training. MEPs, innovation hubs, and training opportunities have all been supported with federal funding – this funding is a large reason why manufacturers have added back jobs and facilities, and without it, our region would have lost much more manufacturing capacity. These resources should be expanded.

Unfortunately, instead of expanding, these investments could all be on the chopping block under President Trump’s budget. Most of the programs at risk are for workforce development and investment in network resources: things like research and development that can create immense value and make the sector more competitive. The manufacturing sector now suffers from underinvestment in network resources because changes to supply chains make it hard for profitable firms that could make the investments to capture the profits from them.

That’s one reason Ohio supports manufacturing research through Manufacturing Extension Partnerships and institutes like America Makes, which was established by President Obama.  The money for these programs comes from federal grants as part of federal “non-defense discretionary spending.” According to the Center on Budget and Policy Priorities, this type of discretionary spending has fallen to historic lows already. It could be slashed even further in Trump’s budget.

Not only manufacturing partnerships are on the line: Trump’s budget is expected to include cuts to workforce development including the Workforce Investment and Opportunity Act, Trade Adjustment Assistance, and Pell Grants. These resources help workers retrain for in-demand skilled jobs, and help lift disadvantaged young people out of poverty by connecting them with the education they need to access skilled jobs with career ladders.

Investments in workforce education and manufacturing hubs make America’s manufacturing sector more competitive. Ohio’s manufacturing sector has added 78,000 jobs since the start of the 2008 Recession. This is far from enough and doesn’t begin to make up for all the manufacturing jobs lost in this part of the country. We should continue to invest in the workforce and other resources that make such gains possible.

President Trump promised American workers a stronger manufacturing sector. He should make good on that promise in his budget and bring Congress a proposal that includes deeper investments in innovation and workforce development.

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Michael Shields

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Policy Matters Ohio is a nonprofit, nonpartisan state policy research institute
with offices in Cleveland and Columbus.

 

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