Cutting red tape would further boost Ohio's recovering manufacturing industry

Manufacturing growth needs stronger federal, state policies, report says
MCT Regional News
Dec 26, 2013

The recovering manufacturing industry in Ohio and around the nation could be stronger with workforce development, increasing technology education, expanding access to capital and cutting red tape.

A U.S. Congress Joint Economic Committee report released this month said U.S. manufacturing added more than 500,000 jobs since February 2010, a relatively weak showing by historic standards. The manufacturing sector needs to add 1.7 million jobs to return to pre-recession levels, the report Manufacturing Jobs for the Future said.

Among the fastest recovering manufacturing areas are places of strength for the Dayton region - machinery and fabricated metals. Nan Whaley, chairwoman of the Regional Manufacturing Task Force, said signs of recovery are widespread. “The feeling from our manufacturers across the region is the recovery is on,” said Whaley, a Dayton city Commissioner and mayor-elect.

Between 2008 and 2010, the Dayton region lost about 21,000 manufacturing jobs. Since 2010, manufacturing has increased by nearly 7,000 jobs and has grown every year since 2010, according to the Dayton Development Coalition.

The new hires have been across the industry.

The trend shows promise:

— A new White Castle food processing plant in Vandalia promises to bring 120 new jobs to the Dayton area.

— Statewide, automakers and their supply chains have led during the recovery with thousands of additional employees.

The Dayton Daily News previously reported on these and other projects and continues to track the manufacturing recovery including job losses and gains and promising areas of economic development as well as national debate over trade and tax policies that deeply impact the region.

Meanwhile, the congressional committee report keys on one aspect of rebuilding manufacturing here. It’s not a lack of jobs waiting to be filled, but a lack of trained applicants for what are estimated to be hundreds of open local positions, Dayton Regional Manufacturing Association President Angelia Erbaugh said. The Association represents members from Cincinnati to Russells Point.

“The lack of workers with the right skill set continues to be the most common compliant I hear from DRMA manufacturer members, regardless of size or industry sector,” she said. “We believe the root problem is not enough people are choosing careers in manufacturing. We are fortunate in the Dayton region to have a number of great training programs. The problem is that we don’t have people in the training seats.”

Sinclair Community College’s Step 2 program, an introduction to computer-aided manufacturing, has enrolled 69 students for the current semester. It’s a post-recession high, but the college could accommodate more having lined up 24 local companies that are offering on-the-job training, or co-ops, while students take classes.

“I’ve got employers who are begging for students to fill jobs and I think that things are looking better than they have in the last few years,” said program coordinator Keith Bernheisel.

Erbaugh said the DRMA is battling the issue by devoting a good portion of its volunteer, staff, and cash resources on career awareness initiatives.

More local companies are working to launch internship and training programs, Erbaugh said, a good sign. “The attitude is changing from, ‘I will hire people only with experience,’ to, ‘we have not been feeding enough people into the pipeline.’”

DRMA is collaborating with state and national organizations about drawing more recruits. “It’s not just Dayton, it’s everywhere,” she said.

A report from accounting firm Deloitte said 83 percent of U.S. manufacturers reported a moderate or severe shortage of high-skilled workers, with up to 600,000 positions going unfilled, enough to impede production and innovation.

Sen. Amy Klobuchar, D-Minn., Vice Chair of the Joint Economic Committee, said bipartisan legislation pending in Congress would help. “America is a country that innovates, makes things, and exports to the world, and manufacturing has long been an engine of economic growth and a key source of good jobs,” Klobuchar said.

While the report was Democrat-sponsored, another report earlier this month from Republicans including committee Chairman Kevin Brady, R-Texas, echoed the issue’s urgency. Brady said the recovery remains disappointing by historic standards and continues to shortchange Main Street and middle-class workers.

“We’ve got to do better to grow our economy and create good, middle-class jobs,” Brady said. “More than four years after the end of the recession much of the nation has yet to experience anything resembling a normal economic recovery.”

Brady said that since the U.S. recession ended in the 2nd-quarter 2009, real GDP has grown at an annualized rate of 2.3 percent, far below the 4.1 percent annualized growth rate of real GDP in an average recovery since 1960.

The Committee cited four legislative initiatives that have yet to be passed into law:

— Strengthening the workforce: Doubling the number of Science, Technology, Engineering and Math-focused high schools, promoting computer science training and research opportunities for undergrads.

— Expanding access to capital: Setting up favorable business tax treatment for spending on equipment, facilities or job training. Tax credits for returning off-shored jobs to the U.S and eliminating tax breaks for shipping jobs abroad.

— Opening markets abroad for exports: Counter currency manipulation and other market-rigging tactics by nations such as China and Japan.

— Creating conditions for growth: Mandating development of a national manufacturing strategy and creating incentive grants for states to build regional “Made in America” industry programs.

2013 U.S. manufacturing strength

Accounts for 12 percent of gross domestic product.

Employs more than 12 million.

Responsible for 70 percent of private sector investment in research and development.

Employs 60 percent of research and development workers.

Generates 90 percent of all patents.

Has the highest economic multiplier with $1 in goods generating $1.48 in additional

economic activity.

Source: Joint Economic Committee U.S. Congress.

In the 14-county Dayton region, manufacturing accounts for:

2,570 companies.

112,519 employees.

$5.6 billion annual payroll.

$3.8 billion in economic development.

$36.6 billion in annual sales.

International exports from the Dayton metro area were $4.5 billion in 2008, $3.7 billion in 2009, bottomed at $2.5 billion in 2010, and by 2012 increased to $2.8 billion.

Sources Dayton Regional Manufacturing Association and Dayton Development Coalition.

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By Steve Bennish - Dayton Daily News, Ohio (MCT)

©2013 the Dayton Daily News (Dayton, Ohio)

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