U.S. GOVERNMENT PUBLISHING OFFICE

36–617 WASHINGTON : 2019

BUILT IN AMERICA: JOBS AND GROWTH IN 

THE MANUFACTURING SECTOR 

HEARING 

BEFORE THE

SUBCOMMITTEE ON DIGITAL COMMERCE AND 

CONSUMER PROTECTION 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

SECOND SESSION 

SEPTEMBER 26, 2018 

Serial No. 115–167 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

(II) 

COMMITTEE ON ENERGY AND COMMERCE 

GREG WALDEN, Oregon 

Chairman 

JOE BARTON, Texas 

Vice Chairman 

FRED UPTON, Michigan 

JOHN SHIMKUS, Illinois 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Ohio 

BILLY LONG, Missouri 

LARRY BUCSHON, Indiana 

BILL FLORES, Texas 

SUSAN W. BROOKS, Indiana 

MARKWAYNE MULLIN, Oklahoma 

RICHARD HUDSON, North Carolina 

CHRIS COLLINS, New York 

KEVIN CRAMER, North Dakota 

TIM WALBERG, Michigan 

MIMI WALTERS, California 

RYAN A. COSTELLO, Pennsylvania 

EARL L. ‘‘BUDDY’’ CARTER, Georgia 

JEFF DUNCAN, South Carolina 

FRANK PALLONE, JR., New Jersey 

Ranking Member 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

G.K. BUTTERFIELD, North Carolina 

DORIS O. MATSUI, California 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

BEN RAY LUJA ́ N, New Mexico 

PAUL TONKO, New York 

YVETTE D. CLARKE, New York 

DAVID LOEBSACK, Iowa 

KURT SCHRADER, Oregon 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California 

RAUL RUIZ, California 

SCOTT H. PETERS, California 

DEBBIE DINGELL, Michigan 

SUBCOMMITTEE ON DIGITAL COMMERCE AND CONSUMER PROTECTION

ROBERT E. LATTA, Ohio 

Chairman 

GREGG HARPER, Mississippi 

Vice Chairman 

FRED UPTON, Michigan 

MICHAEL C. BURGESS, Texas 

LEONARD LANCE, New Jersey 

BRETT GUTHRIE, Kentucky 

DAVID B. MCKINLEY, West Virgina 

ADAM KINZINGER, Illinois 

GUS M. BILIRAKIS, Florida 

LARRY BUCSHON, Indiana 

MARKWAYNE MULLIN, Oklahoma 

MIMI WALTERS, California 

RYAN A. COSTELLO, Pennsylvania 

JEFF DUNCAN, South Carolina 

GREG WALDEN, Oregon (ex officio) 

JANICE D. SCHAKOWSKY, Illinois 

Ranking Member 

BEN RAY LUJA ́ N, New Mexico 

YVETTE D. CLARKE, New York 

TONY CA ́ RDENAS, California 

DEBBIE DINGELL, Michigan 

DORIS O. MATSUI, California 

PETER WELCH, Vermont 

JOSEPH P. KENNEDY, III, Massachusetts 

GENE GREEN, Texas 

FRANK PALLONE, JR., New Jersey (ex 

officio) 

(III) 

C O N T E N T S 

Page 

Hon. Robert E. Latta, a Representative in Congress from the State of Ohio, 

opening statement ................................................................................................ 1 

Prepared statement .......................................................................................... 3 

Hon. Frank Pallone, Jr., a Representative in Congress from the State of 

New Jersey, opening statement .......................................................................... 4 

Hon. Greg Walden, a Representative in Congress from the State of Oregon, 

opening statement ................................................................................................ 6 

Prepared statement .......................................................................................... 7 

Hon. Janice D. Schakowsky, a Representative in Congress from the State 

of Illinois, prepared statement ............................................................................ 8 

WITNESSES

Nikki Moyers, Vice President, Operations, Jerl Machine, Inc. ............................ 10 

Prepared statement .......................................................................................... 12 

Edward Paradowski, President, Apache Stainless Equipment Corporation ....... 18 

Prepared statement .......................................................................................... 20 

Andrew Stettner, Senior Fellow, Century Foundation ......................................... 26 

Prepared statement .......................................................................................... 28 

Eric Anderberg, Vice President, Dial Machine, Inc. ............................................. 35 

Prepared statement .......................................................................................... 37 

SUBMITTED MATERIAL

Blog entitled, ‘‘How do we know the tax cut isn’t working to boost wages? 

Investment, investment, investment,’’ Economic Policy Institute, August 

3, 2018 ................................................................................................................... 73 

Report entitled, ‘‘A Federal Agenda for Revitalizing America’s Manufacturing 

Communities,’’ Andrew Stettner and Joel S. Yudken ....................................... 78 

(1) 

BUILT IN AMERICA: JOBS AND GROWTH IN 

THE MANUFACTURING SECTOR 

WEDNESDAY, SEPTEMBER 26, 2018 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON DIGITAL COMMERCE AND CONSUMER

PROTECTION, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 10:00 a.m., in room 

2123 Rayburn House Office Building, Hon. Robert Latta (chairman 

of the subcommittee) presiding. 

Members present: Representatives Latta, Kinzinger, Burgess, 

Lance, Guthrie, McKinley, Bilirakis, Bucshon, Mullin, Costello, 

Duncan, Walden (ex officio), Schakowsky, Ca ́ rdenas, Welch, Kennedy, Green, and Pallone (ex officio). 

Staff present: Melissa Froelich, Chief Counsel, Digital Commerce 

and Consumer Protection; Ali Fulling, Legislative Clerk, Oversight 

and Investigations, Digital Commerce and Consumer Protection; 

Elena Hernandez, Press Secretary; Paul Jackson, Professional 

Staff, Digital Commerce and Consumer Protection; Bijan 

Koohmaraie, Counsel, Digital Commerce and Consumer Protection; 

Tim Kurth, Senior Professional Staff, Communications and Technology; Austin Stonebraker, Press Assistant; Madeline Vey, Policy 

Coordinator, Digital Commerce and Consumer Protection; Greg 

Zerzan, Counsel, Digital Commerce and Consumer Protection; 

Michelle Ash, Minority Chief Counsel, Digital Commerce and Consumer Protection; Lisa Goldman, Minority Counsel; Tiffany 

Guarascio, Minority Deputy Staff Director and Chief Health Advisor; Carolyn Hann, Minority FTC Detailee; Caroline Paris-Behr, 

Minority Policy Analyst; Andrew Souvall, Minority Director of 

Communications, Outreach and Member Services; and C.J. Young, 

Minority Press Secretary. 

OPENING STATEMENT OF HON. ROBERT E. LATTA, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF OHIO 

Mr. LATTA [presiding]. Good morning. I would like to call the 

Subcommittee on Digital Commerce and Consumer Protection to 

order this morning. 

At this time I recognize myself for 5 minutes for an opening 

statement. 

Good morning again. I would like to welcome everyone to today’s 

Digital Commerce and Consumer Protection Subcommittee examination of the state of manufacturing in America. 

2 

Thanks to policies designed to spur manufacturing in our country, we are seeing a revival of the Made in America brand. Factories are expanding, workers are being hired and rehired, and 

wages are rising. A recent survey of small business owners found 

optimism at an all-time high. 

Small businesses are responsible for creating two out of three 

new jobs. So, when they are raising wages, growing their businesses, and investing in equipment, it is helpful to the entire economy. 

In my own congressional district, the 5th District of Ohio, we are 

definitely seeing a resurgence of optimism. My district stretches 

from densely populated urban centers like downtown Toledo to 

small villages on the state line of Indiana, and we probably have 

over 60,000 manufacturing jobs. In the over 900-plus district meetings I have had since August of 2012, overregulation is one of the 

most mentioned issues. I never hear that regulation isn’t necessary, 

but I always hear people ask for regulations they can live with and 

comply with. It is burdensome for businesses to navigate regulatory 

regimes when they are busy improving operations and products for 

customers or working to grow to reach more people. 

Through policies this Congress and the administration advanced, 

we are witnessing the rebirth of a healthy, strong, and growing 

manufacturing sector. This includes one of our witnesses today who 

comes to us representing Jerl Machine, Inc., from Perrysburg. Welcome. 

And again, we thank you all for being with us today. I look forward to the hearing and hearing from you all. 

According to the Congressional Research Service, the U.S. is the 

world’s second largest manufacturing nation, having been overtaken by China in 2010. But the competition to regain the crown 

is very much alive. In recent years, American manufacturing output has risen steadily, this year reaching its highest level in nearly 

10 years. 

Growing production also means growing jobs. Since 2017, over 

350,000 manufacturing jobs have been created in America. This is 

a sharp reversal over the previous 2 years when the Bureau of 

Labor Statistics was regularly reporting job losses. 

The increasing demand for workers is creating new opportunities 

across our country. Importantly, for the first time in a long time, 

prosperity and opportunity are reaching into rural areas that have 

long been left out of the recovery. As a recent report by Brookings 

Institute notes, the growth of the employment rate in small and 

rural communities has outpaced that of large cities and other larger metropolitan areas. A large part of the success is due to the return of manufacturing jobs. 

Restoring America’s manufacturing sector has been a priority of 

this Congress. Tax reform focused on lowering the burdens for employers which they face in order to spur production and job creation 

has helped fuel the manufacturing boom. Perhaps that is why the 

National Association of Manufacturers’ Outlook Survey reports an 

all-time high in manufacturer optimism for the second quarter of 

this year. They also reported record or near-record highs when it 

came to their expectations about hiring workers, raising wages, 

3 

1https://www.cnbc.com/2018/09/11/small-business-optimism-surges-to-highest-ever.html 

and making investments. Our manufacturers know that opportunity is greater now than it has been in many years. 

Again, I look forward to hearing more about these trends from 

our witnesses, as well as any ideas you have for how policymakers 

can help remove barriers and further promote manufacturing in 

America. We are grateful for the time that you are here with us 

today, and we appreciate your testimony. 

At this time, I would like to recognize the vice chairman of the 

subcommittee, the gentleman from Illinois. 

Mr. KINZINGER. Thank you, Mr. Chairman, for yielding. 

And I thank all of you for being here today. I especially want to 

welcome Mr. Anderberg. He is my constituent. He is the vice president and co-owner of Dial Machine, which is a great American 

manufacturing company located in Rockford, Illinois. Mr. 

Anderberg helps run this family-owned business that has been 

around for more than a half a century. He has a wealth of experience in the industry and is a student of the history of manufacturing and trade. It is not his first rodeo, either. He was here back 

in 2003 in front of the Small Business Committee talking about the 

state of manufacturing then. 

Mr. Anderberg, thank you for making the trip to Washington to 

give us all your unique perspective on the manufacturing sector. It 

is definitely an honor to represent you in Congress. 

With that, Mr. Chairman, I yield back. 

[The prepared statement of Mr. Latta follows:] 

PREPARED STATEMENT OF HON. ROBERT E. LATTA

Good morning, I’d like to welcome everyone to the Digital Commerce and Consumer Protection Subcommittee’s examination of the State of Manufacturing in 

America. 

Thanks to policies designed to spur manufacturing in our country we are seeing 

a revival of the Made in America brand. Factories are expanding, workers are being 

re-hired and wages are rising. A recent survey of small business owners found optimism at an all-time high. Small businesses are responsible for creating 2 out of 

every 3 new jobs so when they are raising wages, growing their businesses, and investing in equipment, it’s helpful to the entire economy 1. 

In my own congressional district, the 5th District of Ohio, we are definitely seeing 

a resurgence of optimism. My district stretches from densely populated urban centers like downtown Toledo to small villages on the state-line of Indiana and we 

proudly have over 60,000 manufacturing jobs. In the over 900 district meetings I’ve 

had since August 2012, overregulation is the most mentioned issue. I never hear 

that regulation isn’t necessary, but I always hear people ask for soft- touch, minimal 

regulation. It is burdensome for businesses to navigate regulatory regimes when 

they are busy improving operations and products for customers or working to grow 

to reach more people. Through policies this Congress and Administration have advanced, we are witnessing the rebirth of a healthy, strong and growing manufacturing sector. This includes one of our witnesses today, who comes to us representing Jerl Marchine Inc. from Perrysburg. Welcome Ms. Moyers, and thank you 

very much for joining us today, I look forward to hearing from you and our other 

witnesses today. 

According to the Congressional Research Service, the U.S. is the world’s secondlargest manufacturing nation, having been over-taken by China in 2010. But the 

competition to regain the crown is very much alive. In recent years American manufacturing output has risen steadily, this year reaching its highest level in nearly 10 

years. 

Growing production also means growing jobs. Since January 2017, over 350,000 

manufacturing jobs have been created in America; this is a sharp reversal over the 

4 

previous two years, when the Bureau of Labor Statistics was regularly reporting job 

losses. 

The increasing demand for workers is creating new opportunities across our country. Importantly, for the first time in a long time prosperity and opportunity are 

reaching into rural areas that have long been left-out of recovery. 

As a recent report by the Brookings Institute notes, the growth of the employment 

rate in small and rural communities has outpaced that of big cities and other larger 

metro areas. A large part of this success is due to the return of manufacturing jobs. 

Restoring America’s manufacturing sector has been a priority of this Congress. 

Tax reform, focused on lowering the burdens employers face in order to spur production and job creation, has helped fuel the manufacturing boom. 

Perhaps that’s why the National Association of Manufacturer’s Outlook Survey reported an all-time high in manufacturer optimism for the second quarter of this 

year. They also reported record or near record highs when it came to their expectations about hiring workers, raising wages and making investments. 

Our manufacturers know that opportunity is greater now than it has been in 

many years. 

I look forward to hearing more about these trends from our witnesses, as well as 

any ideas you have for how policymakers can remove barriers and further promote 

manufacturing in America. We are grateful for your time today and appreciate your 

testimony. 

Mr. LATTA. Thank you very much. The gentleman yields back. 

And I will yield back the balance of my time, and at this time 

I will recognize the gentleman from New Jersey for an opening 

statement. 

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY 

Mr. PALLONE. Thank you, Mr. Chairman. 

A strong manufacturing sector is vital to our identity as a nation, 

is the source of countless scientific and technological breakthroughs, and it is essential to maintaining our national defense 

capabilities. Manufacturing serves as an important building block 

for a strong and stable middle class in this country. Manufacturing 

jobs have historically paid more on average than jobs in other sectors, and they tend to bring with them strong spillover effects for 

local and regional economies. 

In my home State of New Jersey, we have nearly 10,000 manufacturers from large pharmaceutical firms to small machine shops, 

and these manufacturers employ almost 250,000 people and contribute more than $30.1 billion to New Jersey’s economy. 

And I am pleased we are holding a hearing on the state of U.S. 

manufacturing. Our communities are stronger when we can develop well-paying and stable jobs. But the Republican majority for 

two years now has repeatedly prioritized the needs of large corporate interests and the wealthiest few. The American people have 

not been fooled by Republicans’ claims about their giant tax scam. 

The American people know that the benefits of the tax law overwhelmingly go to the wealthiest few. And congressional Republicans also continue to push harmful regulatory rollbacks that undermine innovation and job growth. 

Despite all the evidence to the contrary, Republicans are likely 

to tout the successes of their tax scam today. Yet, repeatedly, we 

have seen that most companies have not and do not intend to use 

the money for capital investment. In fact, we remember all too well 

watching President Trump’s former lead economic advisor Gary 

5 

Cohn’s distress when a group of CEOs were asked if they intended 

to increase their investments when the tax cuts become law, and 

almost none of them raised their hands. Gary Cohn sent 

shockwaves asking, and I quote, ‘‘Why aren’t the other hands up?’’ 

Their hands did not go up because they intended for most profits 

from the tax cuts to go to shareholders, and that is exactly what 

has happened. 

Contrary to the majority’s claims, deregulation has also caused 

substantial uncertainty and angst for manufacturers. For example, 

eight years ago the CAFE standards were put into place to increase 

fuel economy for cars and light-duty trucks by model year 2025. 

U.S. manufacturers and their suppliers innovated and invested in 

advanced technologies. CAFE provided certainty to these firms, allowing them to invest in a pipeline of jobs for the long term. And 

all of that investment and innovation was upended in August when 

the Trump administration announced a proposal to roll back CAFE. 

This announcement threw into disarray well-laid plans for innovation and job growth. 

The Trump administration’s efforts to dismantle the Clean Power 

Act have also created even more uncertainty for the manufacturing 

sector. And this administration’s efforts to abuse emergency authorities to subsidize the coal and nuclear industries threaten to 

hurt national gas-fired electricity producers and the renewables industry while raising costs for U.S. manufacturers at the same time. 

So, what American manufacturers need is for the federal government to prepare and implement a coordinated long-term strategy 

for manufacturing success and job growth. Our key competitors 

have figured this out already. Since 2015, the Chinese government 

has invested billions of dollars into the Made in China 2025 campaign, which is their 10-year plan for transforming their economy 

from commodities to advanced manufacturing. 

And the Obama administration recognized this need and established the National Network for Manufacturing Innovation, now 

known as Manufacturing USA. This is a network of industry, academic, and government partners working to increase U.S. manufacturing competitiveness and spur innovation. To date, this network 

has 14 institutes specializing in a variety of advanced manufacturing sectors such as advanced robotics and lightweight metals. 

The plan was to open three times as many institutes, and I encourage the current administration to follow through with this initiative. 

It’s time to stop making manufacturing policy on a whim and, instead, to think strategically about the future needs of this country. 

Mr. Chairman, American manufacturing also needs companies to 

step up and invest, and not just in their plants, but in their workers as well. Too often, good manufacturing jobs become part-time 

jobs without benefits, and workers are increasing losing their 

power to negotiate for better conditions and higher wages. So, the 

federal government needs the industry to be a partner in creating 

a vibrant manufacturing economy. And I hope this hearing can explore that partnership. 

So, I yield back. Thank you, Mr. Chairman. 

Mr. LATTA. Thank you very much. The gentleman yields back. 

6 

And the Chair now will recognize the chairman of the full Committee of Energy and Commerce, the gentleman from Oregon, for 

5 minutes. 

OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OREGON 

Mr. WALDEN. Thank you very much, Mr. Chairman. I appreciate 

your leadership on this issue and the hearing that we are having 

today. 

As our witnesses will know, we have got a couple of these going 

on today. So, some of us will have to bounce back and forth. 

I would just say at the beginning, I am glad to stack the Trump 

economy up against the Obama economy any day of the week. We 

actually have provided, as a result of Republican majorities, the 

biggest tax relief since Ronald Reagan. We have had significant 

regulatory relief, taking the dead hand of overexcessive government regulation off the throats of America’s entrepreneurs, and 

they have responded at record pace to create jobs in America, and 

to give us the best economy nearly anybody in the working world 

has seen in their time. And so, optimism is up. Jobs are up. There 

are more openings than there are people to fill them, and we are 

moving forward with a robust economy. 

And this notion from the last President that we should get used 

to a 1.5 or 2 percent GDP, and that is the new normal, the best 

America could do, is just garbage. And so, we are seeing it move 

forward at 4.2 percent GDP growth, and a very, very strong economy, and it is because of the Republican policies we have passed 

out of this committee and others, and down to the President for signature. 

But today we are going to hear about manufacturing. It is essential and it is coming back in America. From car parts to industrial 

equipment, to semiconductors, America’s manufacturing sector 

keeps us on the cutting edge of technology and world leadership. 

Thanks to historic achievements in tax and regulatory reform, 

our country is undergoing a manufacturing revival unlike we have 

seen in a very long time. The latest manufacturing index from the 

Institute for Supply Management has reached its highest level in 

14 years. This number translates into surging growth and increased production of goods made in America. 

With the resurgence comes the return of manufacturing jobs. 

And in fact, The Washington Post recently reported, and I quote, 

‘‘Jobs in goods-producing industries, mining, construction, and 

manufacturing, grew 3.3 percent in the year preceding July, the 

best rate since 1984.’’ 

And with this increase in manufacturing jobs has come rising 

wages. According to the August Bureau of Labor Statistics quarterly release, compensation for workers has risen to a nearly 10- 

year high. These are the facts. 

The latest GDP report shows that our economy has grown at a 

rate of 4.2 percent, and we anticipate this week’s GDP report will 

show similarly strong results. Further, earlier this month, the National Federation of Independent Business—and my wife and I 

were small business owners for 21 years—it reported that its small 

business optimism index has surged to 108.8 percent, the highest 

7 

1 ’’Under Trump, the jobs boom has finally reached blue-collar workers. Will it last?’’ (September 9, 2018)https://www.washingtonpost.com/business/2018/09/09/under-trump-jobs-boomhas-finally-reached-blue-collar-workers-will-it-last/?noredirect=on&utm—term=.9c7b28e2a87f 

level ever recorded in the survey’s 45-year history. These are the 

facts. 

Of course, all these numbers can seem abstract, but what they 

represent is not. Our economy is strong and growing. This surge 

of American manufacturing has come from business, both large and 

small. Jobs are being created. New products, technologies, and 

medicines are being invented. And consumers have more money in 

their pockets to spend, to put away for their children’s education, 

or save toward retirement. Workers are once again able to find 

solid, dependable jobs with good pay. 

And it is all the result of this Congress, the Republican Congress, 

investing in America by reducing the burdens and taxes and unnecessary regulations imposed on job creators. You know America has 

always been a nation of doers and makers. It has always been a 

place where anyone with dedication and ambition can start their 

own enterprise and take the future into their own hands. By any 

measure, we are witnessing a reinvigoration of that great and 

proud tradition as Americans. 

So, I am proud of this committee’s work. Most of it has actually 

been bipartisan. And we are getting pro-growth, pro-innovation 

policies and we are helping our entrepreneurs do what they do 

best. 

That includes we really appreciate our witnesses here today. 

Thank you all for the help you are doing to grow jobs in America. 

We know there is a lot more work to be done. We know there are 

unsettled parts and challenges in the economy. But we are here to 

be your partner, to help American workers succeed and American 

businesses grow, and manufacturing get even stronger. 

So, with that, Mr. Chairman, I yield back the balance of my time. 

[The prepared statement of Mr. Walden follows:] 

PREPARED STATEMENT OF HON. GREG WALDEN

Good morning and thank you to our witnesses for appearing before us today to 

discuss the state of a quintessential American industry: manufacturing. From car 

parts, to industrial equipment, to semiconductors, America’s manufacturing sector 

keeps us on the cutting edge of technology and world leadership. 

Thanks to historic achievements in tax and regulatory reform, our country is undergoing a manufacturing revival unlike any we’ve seen in a long time. The latest 

manufacturing index from the Institute for Supply Management has reached its 

highest level in 14 years. This number translates to surging growth and increased 

production of goods made in America. 

With this resurgence comes the return of manufacturing jobs. The Washington 

Post recently reported, ‘‘Jobs in goods-producing industries—mining, construction 

and manufacturing—grew 3.3 percent in the year preceding July, the best rate since 

1984. . .’’ 1

And with this increase in manufacturing jobs has come rising wages. According 

to the August Bureau of Labor Statistics quarterly release, compensation for workers has risen to a nearly 10-year high. 

The latest U.S. GDP report shows that our economy has grown at a rate of 4.2 

percent, and we anticipate this week’s GDP report will show similarly strong results. 

And further, earlier this month, the National Federation of Independent Business 

reported that its ‘‘Small Business Optimism Index’’ had surged to 108.8 percent, the 

highest level ever recorded in the survey’s 45-year history. 

8 

Of course, all these numbers can seem abstract, but what they represent is not. 

Oureconomy is strong and growing. This surge of American manufacturing has come 

from businesses both large and small. Jobs are being created. New products, technologies, and medicines are being invented. Consumers have more money in their 

pockets to spend, to put away for their children’s education, or save towards retirement. Workers are once again able to find solid, dependable jobs with good pay. 

And it is all the result of this Congress investing in America by reducing the burdens that taxes and unnecessary regulations impose on job creators. 

America has always been a nation of doers and makers. It has always been a 

place where anyone with dedication and ambition can start their own enterprise and 

take the future into their own hands. By any measure we are witnessing a reinvigoration of that proud tradition. 

I am proud that this committee’s dedication to pro-growth, pro-innovation policies 

has contributed to this moment. I am even more proud of America’s workers and 

business leaders. 

That includes our witnesses for today’s hearing. Thank you for all you do to help 

create jobs and keep America a place where we make things that improve lives and 

change the world. Please let us know what we in Congress should do to continue 

supporting American manufacturing and the remarkable economic growth we see 

today. It’s our job to make it easier for you to succeed. 

Thank you and I yield back the balance of my time. 

Mr. LATTA. Thank you very much. The gentleman yields back the 

balance of his time. 

The Chair now recognizes the ranking member of the subcommittee, the gentlelady from Illinois, for 5 minutes. 

OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Ms. SCHAKOWSKY. Thank you, Mr. Chairman, and I apologize to 

you, to our witnesses, and my colleagues for being late. 

I want to thank you, and Mr. Stettner, Mr. Paradowski, Ms. 

Moyers, and Mr. Anderberg for being here today. 

Manufacturing helped build the American middle class. Strong 

wages helped build products that Americans were proud of. And 

unfortunately, too many misguided policies over the last 30 years 

have allowed our manufacturing sector to slowly whither away. 

I am pleased to see that my colleagues invited as witnesses executives from businesses that used the most recent Republican tax 

cut to invest in their businesses by increasing wages and better 

training for their workers. However, closer examination of macrolevel data, a very different story than the one that we will be told 

today can be heard. 

I would like to submit for the record this blog by Josh Bivens 

from the Economic Policy Institute for the record. I ask unanimous 

consent. 

Mr. LATTA. Without objection. 

[The information appears at the conclusion of the hearing.] 

Ms. SCHAKOWSKY. What this will show is that, despite the Republican rhetoric, we haven’t seen anything close to an explosion 

in investment. Examination of the Census Bureau’s Manufacturers’ 

Shipments, Inventory, and Orders Data from 1992 until today 

shows current investment levels far below that of even 2009. 

We shouldn’t be surprised. At the end of the last year, Republicans’ political consultants connected business with public relations firms before the tax bill was even signed into law. They touted one-time bonuses as evidence that the tax bill would lead to 

9 

higher wages in the long term for workers. Today is the next step 

in that well-orchestrated public relations campaign, and I don’t 

mean in any way to denigrate our great witnesses that are here 

today. So, where have the $2 trillion gone? Since the tax bill passed, we 

have seen an explosion of stock buybacks. When companies invest 

in buybacks, they juice their stock prices in the short term, creating what Senator Warren described as a sugar high, that leads 

companies to neglect investment in equipment, wages, and worker 

training. 

According to a recent report by the Roosevelt Institute and the 

National Employment Law Center, in the 3 years prior to the enactment of the tax law, public companies across the American economy spent roughly three-fifths of their profits on buybacks. So, 

what happens when Congress and the Trump administration give 

corporate Americans more cash? Examining the first half of this 

year, it is clear corporate America likes to spend on buybacks. 

Share repurchases surged 43 percent in the first half of this year 

versus a far less inspiring increase of 27 percent for capital expenditures. 

Consider Walmart, the Nation’s largest employer. Walmart supported the tax bill and claimed it would help workers, but it is not 

clear how much of that $2.2 billion in annual tax cuts actually 

helped its more than 1.4 million Americans. Shortly after enactment, the Walmart board authorizes $20 billion in stock buybacks. 

The Roosevelt Institute released a separate report estimating that, 

if Walmart had directed half of that toward wages, hours worked 

compensation could have been increased by more than $5 per hour, 

which would transform the lives of many of those workers and help 

provide a living wage. 

As Members of Congress, wI am looking at the time—as Members of Congress, we are approached by employers all the time who 

say they can’t find qualified workers, that there is a skills gap. I 

would argue that America’s skills gap is really more of a wage gap. 

The declines in union density and a focus on core competence and 

executive salaries, instead of training and capital investment, have 

dried up the private sector’s role in workforce development. 

So, I am going to skip to the end and submit the whole thing for 

the record. 

I just want to say that what my Republican friends won’t tell you 

is how the administration’s deregulatory agenda, again, makes the 

wallets of the wealthy fatter while risking health and safety of the 

middle class and working poor. 

I hope that we will hear some of the good news today and that 

what we are going to hear from all of you is that we can do better 

in this country. 

Thank you very much, and I yield back. 

Mr. LATTA. Thank you very much. The gentlelady yields back. 

And that will conclude with our members’ opening statements. 

The Chair would like to remind members that, pursuant to committee rules, all members’ opening statements will be made part of 

the record. 

And as the gentleman from Oregon stated, the chairman of the 

full committee, we do have two subcommittees running simultaVerDate Nov 24 2008 11:23 Jun 10, 2019 Jkt 037690 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 U:\MY DOCS\HEARINGS 115\HEARINGS\115-167 CHRIS
10 

neously today. So, members will be coming back and forth during 

each committee hearing. 

Once again, I want to thank our witnesses for being with us 

today. We greatly appreciate your taking the time to testify before 

our subcommittee today. And today’s witnesses will have the opportunity to give a 5-minute opening statement, followed by a round 

of questions from our members. 

Our witness panel for today’s hearing will include Ms. Nikki 

Moyers, who is Vice President of Operations at Jerl Machine in 

Perrysburg, Ohio, right up the road from where I live; Mr. Edward 

Paradowski, the President of Apache Stainless Equipment Corporation in Beaver Dam, Wisconsin; Mr. Andrew Stettner, the Senior 

Fellow at the Century Foundation, and Mr. Eric Anderberg, the 

Vice President of Dial Machine in Rockford, Illinois. 

Again, we want to thank you all for being with us today. And if 

you would, pull that microphone up close and just press the button. 

You will see the little red light go on there. 

And you are recognized, Ms. Moyers, for your opening 5-minute 

statement. Thank you very much for being with us. 

STATEMENTS OF NIKKI MOYERS, VICE PRESIDENT, OPERATIONS, JERL MACHINE, INC.; EDWARD PARADOWSKI, 

PRESIDENT, APACHE STAINLESS EQUIPMENT CORPORATION; ANDREW STETTNER, SENIOR FELLOW, CENTURY 

FOUNDATION; AND ERIC ANDERBERG, VICE PRESIDENT, 

DIAL MACHINE, INC. 

STATEMENT OF NIKKI MOYERS 

Ms. MOYERS. Thank you. Good morning. Thank you, Chairman 

Latta, and subcommittee members, for inviting me here on behalf 

of my company. 

My name is Nikki Moyers. I am Vice President of Operations at 

Jerl Machine, Inc., in Perrysburg, Ohio. The company was started 

by my grandfather, Bob Brossia, out of his garage in 1973. Today, 

Jerl boasts 67 employees and caters a variety of industries. The 

state of American manufacturing is, obviously, near and dear to us 

because it is our jobs, but also because it is our family legacy. 

In the past year, Jerl has seen a production resurgence unprecedented in its 45-year history. Our core customers are sending in 

more purchase orders than ever. We are hearing from companies 

that haven’t done work with us for over a decade, and more and 

more new opportunities are surfacing. 

Our suppliers are just as busy, proving that our good fortune is 

not unique in this industry. And I attribute much of the upswing 

to the passing of the tax cuts and JOBS Act late last year, specifically its provision to cut corporate taxes. 

We are on the right track to have our highest sales and highest 

profit of year on record for 2018. Jerl has been able to give muchdeserved wage raises to our employees, has already paid out two 

separate bonuses to all of our employees, and has another plan for 

late November. We have also added three machines to our shop 

floor to keep up with our orders. 

But our growth is hindered. We are currently running at 60 percent capacity, despite the fact that our phones are ringing more 

11 

than ever. We are forced to turn away work because we do not 

have the skilled labor to meet our deadlines. We cannot fill our 

open positions, and the looming retirement of 15 percent of our 

workforce will only worsen this problem. I am confident that the 

current manufacturing boom is not a fluke, but unless strides are 

made to fill the skilled manufacturing jobs that nearly every company like ours has, we cannot sustain the growth. 

It is no coincidence that I am here today as the lone female up 

here representing my field. In my time at Jerl, we have employed 

a single female machinist. Our workforce is over 90 percent Caucasian. Not only are we lacking in skilled workers, we are suffering 

from a lack of diversity in manufacturing. 

And I think the answer lies in our schools. It is time to fund the 

industrial arts and practical life skills as part of a core curriculum. 

Fine arts education can’t be allowed to cease either, as so much of 

what we do requires the craft of an artist’s eye. Trade and technical schools must be touted by counselors, teachers, and parents 

as options equal to traditional 4-year colleges. Students need to 

know our field and that we offer high-paying careers. 

We are on the right track. The current administration has shown 

that it values the manufacturing field and it recognizes its impact 

on our country as a whole. As long as it continues to facilitate open 

discussions such as this hearing, manufacturing will endure with 

continued hard work. We have never feared hard work. Bring on 

the future. 

Thank you. 

[The prepared statement of Ms. Moyers follows:] 

12 


36617.001

Built in America: Jobs and Growth in the Manufacturing Sector 

Nikki Moyers, Vice President of Operations 

Jeri Machine Inc. 

PciTysburg, OI-l 

Summarv 

Jeri Machine, Inc. was built by Robert Brossia forty-five years ago and remains a family 

business catering to a variety of industrial concerns 

Jeri's core competencies include tight tolerance machining, CNC mill and lathe operations, 

major machine sub-assemblies, bending, and welding 

During and after the Great Recession. Jeri was forced to scale back production by shutting 

down its third shift and laying off employees in response to lack of work from our core 

customers 

The past year has seen a production resurgence, much of which Jerl attributes to the Tax Cuts 

and Jobs Act 

To date, 2018 has seen Jeri's highest sales growth and highest profit margin on record, 

allowing us to reinvest in our employees, new machinery, and training 

Jeri's grovvth is hindered by a lack of skilled labor employees to fill current open positions, 

and the situation will only be exacerbated by the looming retiring workforce 

Renewed funding in schools for students to experience and learn about the trades is a 

necessity for the survival of manufacturing 

NJKKJ MOYERS 
13 


36617.002

Built in America: Jobs and Growth in the Manufacturing Sector 

Robert "Bob" Brossia started Jeri Machine. Inc out of his garage in 1973 with a healthy 

knowledge of machine repair and inner workings, some hand tools, and a single drill press. Bob 

had worked for several machine shops, conquering every task from cleaning and sweeping to 

shop supervisor. but nothing felt quite right. He watched his bosses make the same decisions 

while expecting different results and knew he could do better. Bob wanted to make his own 

rules, and create a legacy to provide for his wife, four children, and inevitable grandchildren like 

me. 

Jerl Machine was incorporated in 1975 with Bob at the helm, his wife Eileen at his side 

and two daughters running the office. Today, Bob is still CEO, his daughter Carol is company 

President, and several other family members, myself included, round out the workforce. Jerl is 

known for quality precision metal working and tool making for a diverse group of industrial and 

manufacturing customers. The company core competencies include tight tolerance machining, 

major component sub-assemblies, CNC turning and milling, bending, and welding. Jerl prides 

itself on its highly skilled workforce of tool makers and engineers. and strives to treat each of its 

sixty-seven employees like family by offering competitive wages and generous benefits 

including health and life insurance, paid vacation and holidays, profit sharing and matching 401 k 

contributions. 

Bob has never been afraid of technology, change, or expansion; he embraced testing the 

latest machinery and researched relentlessly to allow Jeri to break into new industries. If he 

didn't have the knowledge to dive into an innovative venture, he found someone who did. He 

experimented with machining processes until they were successful and profitable. Jeri was 

NIKKI MOYERS 
14 


36617.003

thriving by the year 2000. and instead of quietly collecting his profits and maintaining the status 

quo. Bob sought out and purchased an 80,000 square foot facility. nearly triple the size of his 

current one. ''You'll never fill it."' his own sales stafiand plant foreman said. Over a decade 

later. we're running out of space. Bob's forward thinking and vision built a solid foundation for 

a sustainable manufacturing business, no matter what the changing world's needs would require. 

Jeri has seen economic boom and economic crisis in its forty-three year tenure in 

Northwest Ohio. Thanks to an ever-changing network of customers, and more importantly, 

diverse industry reach, Jeri was able to remain in business while other companies floundered and 

failed through 2008 and 2009's disastrous fiscal downturn. We were hit late by the recession, 

and boasted a nearly record sales year in 2009. New industries sought us out and customers we 

hadn't heard from in years started sending fresh orders. The employee count bloomed to ninety 

plus. But the upswing was short lived. and soon we were receiving nothing but cancellations. 

Our customers pulled promised work with apologies that did nothing to cover our payroll. The 

third shift was disbanded with no work to keep it running. I had my tirst experience with sitting 

down an employee and to break the news that he was to b.: laid otT, with no guarantee of when -

or if- we could call him back. Bob. and several family members in management, took 

substantial pay cuts to avoid further layoffs. 

Today. and specifically in the past year, the scene is much brighter. 1 believe the passing 

of the Tax Cuts and Jobs Act, specifically the provision lowing the maximum corporate taxes, 

has had much to do with the change. Less taxes for us, our customers, and their customers mean 

more cash to put towards industry. wages, and technology. Our core customers are requesting 

more orders than ever, and new customers are surfacing every week. Jcrl has resumed its third 

shift, which was cut at the end of2015 due to low work. We have purchased three new 

NIKKI MOYERS 
15 


36617.004

machines this year. Company sales through mid-September are nearly topping our total for 

201 Ts year end. After several years of single digit profit margins. the company is boasting a 

nearly nineteen percent profit for 2018 to date. We are, in short, on track to have our highest 

sales and highest profit year on record. 

Jeri's increased profit and high sales docs not mean a fat paycheck for rich owners. In 

tact, Bob has yet to fully reinstate his pre-recession salary. Instead, Jeri has given two separate 

bonuses so far this year to its employees, with another planned for late November. Profit sharing 

will be paid at a planned ten to twelve percent. Despite ever higher insurance premiums, Jeri did 

not increase any contribution costs for employees this year. And we will continue to invest in 

new equipment and, hopefully, more skilled employees. 

The remarkable truth is that we could be doing even better. With the huge influx of 

purchase orders and new customers, Jeri is turning down work due to lack of skilled labor. 

Machines sit idle on the shop floor with no one qualified to run them. Our third shift, though 

efticient, is a skeleton crew that could be expanded to triple its size. Ideally, Jerl could add thirty 

to filly percent more employees. Our shop is running at approximately sixty percent of its full 

capacity. The demand for our brand of manufacturing is extremely high, and we are unable to 

deliver with our current staff. 

The skilled trades arc not, as some people continue to believe, a dirty job for young men 

who couldn't make it in a traditional four year college. A life in manufacturing requires 

intelligent problem solving from scientific and artistic minds. We need engineers and 

mathematicians and craftsmen. Right now. Jeri's skilled stall' carries an average age of fortyseven years old. Fifteen percent of our sta!Twill retire in the next three years, and we have no 

one to replace those men. Our current staff is over ninety percent Caucasian. In my time at Jeri, 

NIKKI MOYERS 
16 


36617.005

we have employed a single female machinist. Not only are we su1Tering from a lack of skilled 

labor, we are suffering from a lack of diversity. Manufacturing needs new viewpoints and fresh 

eyes. The jobs arc here, and they arc high-paying and sustainable. Jeri, and other shops like us, 

are desperate for people to fill them. 

The economic future of my company is looking bright, so long as we can fill the voids 

left by our retiring workforce and meet the ever increasing demands of our customers. We can 

sustain our growth with more of the same- more tax breaks for businesses and more 

deregulation that makes it simpler to buy and sell American goods. Some argue that business tax 

breaks do nothing but line the pockets of businessmen and hurt the American public. But those 

businessmen arc providing the public's jobs, and putting their money back into their employees 

and companies. Others push for higher minimum wages, but the only outcome of increasing the 

minimum wage is int1ation. Higher pay does not make an employee more capable; it devalues 

skilled jobs. When an entry level position is paid the same as a skilled worker, there is no 

incentive for any potential workers entering the job field to further educate themselves by 

learning trades and specialized skills. 

We need a renewed effort to assure the public that manufacturing is not a dying breed. 

Instead, it is thriving. However, we are in desperate need of fresh blood to add to the strong 

foundation that people like my grandfather Bob has built. We are fortunate to have local trade 

and technical schools, like Penta Career Center of Perrysburg, Ohio in our community to keep 

skilled job opportunities as part of high school curriculum. It's not enough. All schools need 

mandatory practical instruction in industrial arts, fine arts, and practical life skills such as 

financial management and job preparedness, in addition to their core curriculum. Educational 

funding should be allocated to high schools to reestablish their trade programs or add machinery 

NIKKI MOYERS 
17 


36617.006

to enrich existing programs. Without access in schools to the trades, students may not know 

manufacturing careers are available to them. Parents and teachers should be educated in the 

options for their children and students as they prepare to leave high school. The soaring cost of 

college tuition, combined with the uncertainly to acquire a job in your field after graduation and 

the often overwhelming burden of student loans should be considerations for all young adults. In 

short, the continued renewal of manufacturing must start with the next generation to ensure the 

hard work of our predecessors will not be wasted. 

I, my family, and Jeri Machine as a whole, are confident that we are on the right track. 

As long as the administration continues to care about the future of manufacturing and recognize 

how it affects the country as a whole, the industry will not be allowed to perish. There is still 

work to be done, but we have never feared hard work. Bring on the future. 

NIKKI MOYERS 
18 

Mr. LATTA. Thank you very much for your opening statement. 

And, Mr. Paradowski, you are recognized for 5 minutes. 

STATEMENT OF EDWARD PARADOWSKI 

Mr. PARADOWSKI. Good morning. Thank you, Chairman Latta, 

Ranking Member Schakowsky, members of the subcommittee, for 

the opportunity to testify before you today. 

My name is Ed Paradowski. I am President of Apache Stainless 

Equipment Corporation in Beaver Dam, Wisconsin. Apache Stainless Equipment is a manufacturer of capital equipment from high 

alloys, primarily stainless steel, with annual revenues of approximately $43 million and 171 employees, most of which are skilled 

trades people. 

I also have responsibility for a second business, which is a company called Dalton Ag in Lenox, Iowa. We are a manufacturer of 

agricultural equipment; annual revenues of about $9 million and 

43 employees. Both businesses rely heavily on the skilled trades, 

and that is the pacing item for both of our businesses to grow. 

Both Apache Stainless and Dalton Ag are part of a holding company, Dexter Apache Holdings, which we have six companies within our holding company, five of which are manufacturing located in 

Wisconsin and Iowa. The five manufacturing businesses operate in 

unrelated business segments. We are a 100 percent S corp ESOP. 

On a daily basis, as an S corp ESOP, we are fulfilling the American 

dream for our current 897 employee/owners. That number would be 

higher if we could find more skilled trades people. 

My testimony today will reflect my personal perspective on the 

effects of current economic policy on the health of the U.S. economy 

with a specific focus on the manufacturing sector. To provide some 

backdrop for the testimony, I will give a little bit of my personal 

background. 

First, I would like to recognize Mr. Walden for acknowledging entrepreneurs and opportunity. 

I was born on the south side of Milwaukee, raised the youngest 

of six kids, and I started a manufacturing company at the age of 

28 with no money and no real business experience. So, I love the 

opportunity that this country provides. And the root of my perspective is really based on the experience I have had since then. 

In the last 10 years, I have really focused heavily on advocacy 

activities. I work very closely with local and state government, national politicians, events such as this today. We host politicians and 

anybody who is willing to come visit our facility to educate them 

on what manufacturing is all about. 

Our state chamber of commerce, Wisconsin Manufacturers & 

Commerce, I work closely with them. They are an ally/partner to 

our business. To work, government needs to be an ally/partner to 

manufacturing and commerce in general. And they are a great 

leader in the State of Wisconsin. 

Most of you, I would suspect, are familiar with the MEP Network 

nationwide. In the state of Wisconsin, our governing overarching 

body for the MEP Network is the WCMP, Wisconsin Center for 

Manufacturing & Productivity. I sit on that board and, actually, 

I’m chairman of that board. So, the public-private partnerships 

that the MEP Network provides, I am familiar with that as well. 

19 

We all talk about education, education reform, and the skills gap. 

The skills gap is definitely not a wage gap. We could speak later 

to that. 

Our Wisconsin Department of Public Instruction, which are the 

K–12, they are the core of how our children are educated. I have 

been a member at the very ground level of what we call the Regional Career Pathways Project in the State of Wisconsin. Actually, 

I was asked by our state superintendent to present for the State 

of Wisconsin in the grant competition three years ago, which the 

State of Wisconsin won a $2 million grant for education reform. So, 

I am deeply involved in education reform. It is one thing to talk 

about the problem; it is another thing to get in there and to also 

help solve it. 

And then, the National Association of Manufacturers was mentioned. Actually, I am out here today for a board meeting, which, 

unless I say something completely wrong, I will be elected to their 

board tomorrow. 

In summary, my perspectives are not just of a manufacturer, but 

a manufacturer that works closely with other manufacturers, with 

government, and with education. As I am running out of time here, 

I will hit just a couple of the high points, and really maybe just 

one philosophical perspective. 

I use this as an analogy quite often, the role of government in 

manufacturing. In a manufacturing business, we make our money 

on the shop floor. We add value to raw materials and we make 

goods and services. And myself and others in my office, we are corporate overhead. Our corporate overhead needs to do two fundamental things. We need to make our shop floor more productive, 

maximize output/efficiency, and there are also some compliance 

issues, safety and things of that nature. And the second thing is 

there has to be a sustainable economic balance between the cost of 

corporate overhead and how much activity is going on on the shop 

floor. 

In a soft year where manufacturing might soften a little bit, I 

don’t just put more burden on my shop floor in terms of dollars; 

I actually have to downsize my corporate overhead. And that is the 

role of government to the private sector, not just manufacturing. 

The private sector is really four fundamental things. You mine 

it; you grow it; you make it; you invent it. And government needs 

to be an allied partner to that process, so that the private sector 

can grow. And tax reform is a piece of that, as are tariffs, and there 

has to be a sustainable economic balance between the cost of government and the size of the private sector. 

I will make one statement, as I am running out of time here, 

very quickly. There was a comment that was made—oh, where did 

it go?—there was a comment that was made regarding Mr. Walden 

said that the government—no, I’m sorry, I already acknowledged 

Mr. Walden. There was a statement that was made by Mr. Pallone, 

actually, that industry needs to be a partner to government. And 

that exactly is the problem; government needs to be a partner to 

industry. I think we have got this a little bit reversed. 

Thank you. 

[The prepared statement of Mr. Paradowski follows:] 

20 


36617.007

Introduction 

Testimony of 

Mr. Edward F. Paradowski 

President 

Apache Stainless Equipment Corporation 

Before the 

Subcommittee on Digital Commerce and Consumer Protection 

Committee on Energy & Commerce 

U.S. House of Representatives 

"Built in America: Jobs and Growth in the Manufacturing Sector" 

September 26, 2018 

Thank you, Chairman Latta, and members of the Subcommittee, for the opportunity to testify 

before you today. My name is Ed Paradowski and I am President of Apache Stainless Equipment 

Corporation, which is in Beaver Dam, WI. Apache Stainless Equipment is a manufacturer of 

capital equipment from high alloys, primarily stainless steel, with annual revenues of 

approximately $43MM and 171 employees. 

I also have responsibility for a second manufacturing company, which is Dalton Ag, in Lenox, lA. 

Dalton Ag is a manufacturer of agricultural equipment, with annual revenues of approximately 

$9MM and 43 employees. 

Both Apache Stainless Equipment and Dalton Ag are part of a holding company, Dexter-Apache 

Holdings, Inc. Dexter-Apache Holdings is a 100% S-Corp ESOP with 6 businesses in Wisconsin 

and Iowa. 5 of our businesses are manufacturing companies, all of which do business in 
21 


36617.008

unrelated market segments. Dexter-Apache Holdings is an extremely successful organization, 

and as a 100% employee-owned business, we are fulfilling the American Dream for 897 

employee-owners. 

Overview 

My testimony today will reflect my personal perspective on the effects of current economic 

policy on the health of the U.S. economy, with a specific focus on the manufacturing sector. To 

provide a backdrop for the testimony I will provide, I would like to give an overview of my 

personal background. 

I have worked in manufacturing essentially my entire career, which began in 1984. In the last 

decade I have had a targeted focus on advocacy activities, such as: 

Regularly working directly with local, state and national politicians to discuss policy and 

the impact on the economy, which includes hosting our local politicians at our place of 

business, as well as lobbying events on Capitol Hill. 

Working very closely with the WMC {Wisconsin Manufacturers and Commerce), our 

state chamber of commerce, on issues that are impactful to manufacturing. 

Serving as Chairman of the Board of the WCM P {Wisconsin Center for Manufacturing 

and Productivity), which is the Wisconsin MEP (manufacturing extension partnership) 

organization. As I am sure each of you know, the MEP is a public-private partnership to 

assist small and midsize manufacturing companies maintain their competitive edge. 
22 


36617.009

Working closely with the Wisconsin Department of Public Instruction as a "CEO 

Champion" to help evolve the educational process in Wisconsin thru the Wisconsin 

Regional Career Pathways Project. 

Working closely with the NAM (National Association of Manufacturers), to improve the 

competitive landscape for manufacturing on a national level. I will be elected to the 

NAM board of directors this week. 

In summary, my perspectives are not just that of a manufacturer, but instead a manufacturer 

that works closely with other manufacturers, government, and education. My opinions are 

based more in actual experience than they are in academic theory. 

The Role of Government in the Economy 

I use a manufacturing company as a parallel example for how I believe government should 

function within the economy. 

In manufacturing we make our money on the production floor. The role of "general 

administration" within the business is to create an optimal environment on the production 

floor for top efficiency and maximum output. There are also rules put in place that need to be 

complied with for the sustainability of the business. This general administration is "corporate 

overhead", and the 2 fundamental rules that exist are the following: 

1) General administration must optimize efficiency, output and compliance on the 

production floor 
23 


36617.010

2) There must be an economic ratio of cost between general administration and 

production for the overall business to maintain sustainable economic competitiveness in 

the markets in which it competes. 

Using this analogy as a parallel to government, government is "corporate overhead" to the 

private sector. 

1) The role of government is to optimize efficiency, output and compliance in the private 

sector, which is the pacing item to economic growth. 

2) There must be an economic ratio of cost between government and the private sector 

for the U.S. economy to maintain sustainable economic competitiveness in the global 

economy. 

This is the fundamental perspective that I apply to the specific topics that follow. 

Tariffs and Trade Deals 

Free markets set prices and wages, and over the course of time (all else being equal), efficiency 

is requisite to be sustainable. The "all else being equal" qualifier does not apply when unfair 

trade deals work against U.S. companies. As it pertains to China specifically, free market 

competitiveness cannot exist when U.S. companies compete against state-owned and statesubsidized companies in China. It also cannot exist when U.S. Intellectual Property is not 

protected, or when tariffs are applied in an imbalanced manner. 
24 


36617.011

In any relationship where there is an inequity over time, one side ultimately wants to opt out. 

When opting out is not a realistic option, ideally both sides would negotiate in good faith to 

arrive at a more equitable arrangement. When one side refuses to negotiate in good faith, all 

options must be considered. 

While enacting tariffs on China to force a revised trade agreement is not the ideal option, it 

may be the only option to reaching a deal that is equitable and sustainable. Many U.S. 

companies are feeling price and cost pressure through this process, so time is of the essence to 

getting this done. 

Tax Reform 

Forced cost structures that are imposed on one business that are not imposed on another, 

hinder the ability of the negatively affected companies to compete sustainably in a global 

economy. The recent changes to corporate tax rates were necessary to narrow the gap in cost 

competitiveness for U.S. based companies against our foreign competition. 

Economic Policy Overall 

I will close with a repeat of two points I made previously: 

1) The role of government is to optimize efficiency, output and compliance in the private 

sector, which is the pacing item to economic growth. 
25 


36617.012

2) There must be an economic ratio of cost between government and the private sector 

for the U.S. economy to maintain sustainable economic competitiveness in the global 

economy. 

Over-regulation, tax rates that are not globally competitive, and the excessive cost burden of 

big-government hurts all U.S. citizens. Government that is lean and an ally partner to the 

private sector will aid the U.S. economy. 

As it pertains to the policies of the current administration, it is my strong opinion that these 

policies are directly attributable to the current economic environment of low unemployment, 

strong stock market performance, and outstanding GOP growth. 
26 

Mr. LATTA. Thank you very much for your testimony. 

Mr. Stettner, you are recognized for 5 minutes. 

STATEMENT OF ANDREW STETTNER 

Mr. STETTNER. Good morning, Chairman Latta and Ranking 

Member Schakowsky. First, let me commend the committee for 

holding this hearing. 

Over the past year, the Century Foundation and its Bernard L. 

Schwartz Rediscovering Government Initiative sponsored the High 

Wage American Project, researching and touring the industrial 

Midwest to understand the future of manufacturing as a provider 

of good jobs and economic growth. Representative Schakowsky, several of the community leaders involved in the tour had a chance 

to meet you 2 weeks ago today when they came to Washington to 

present our findings, which I have submitted for the record. 

While no one in the Midwest has such rose-colored glass as to believe manufacturing will ever provide 30 percent of the jobs, like 

it used to, the message was loud and clear. Manufacturing matters 

to communities. Our research finds that in small towns in industrial states from Michigan to Mississippi, manufacturing still accounts for one in four private sector jobs. Manufacturing brings 

high-tech jobs to these firms into small towns like Phillips, Wisconsin, where Phillips Medisize has developed from a manufacturer 

of action figures to a worldwide provider of advanced molding and 

engineering services. 

The time is right for Congress to take action to build a proactive 

national manufacturing strategy. Resilient manufacturers have 

added back 1.26 million of the 5.7 million jobs lost from 2000 to 

2010. But there are serious concerns. Our diminished production 

capacity has kneecapped our ability to innovate, as America had 

ceded its edge in high-tech manufacturing to advanced East Asian 

nations and Germany. And while manufacturing still pays 10 percent more than other jobs, that wage advantage has eroded. Lowpaid, temporary help workers represent 11 percent of the manufacturing workforce today, up from just 2.3 percent in 1989. 

But a national manufacturing strategy must go beyond international trade and tax issues. Rather, Federal policies should focus 

on investments to create the conditions for manufacturers to compete and thrive in a global marketplace and for the manufacturing 

workforce to prosper. 

Communities are taking action. The Federal Government can 

help by helping them build public-private partnerships and spur 

high-tech manufacturing, reinvest in the workforce, retain and restore good jobs, and mobilize capital. 

The future of U.S. manufacturing lies in being the most hightech, not the lowest cost. In Cleveland, we visited the ArcelorMittal 

steel mill, the first in the world to create a ton of steel with a single hour of labor, which sees a strategic advantage in environmental regulations that increase demand for high-grade, lightweight steel. Indeed, our ability to be a global leader in the clean 

economy depends on a robust manufacturing sector to create the 

next generation of green products. 

Look at our competitors. The Made in China 2025 campaign is 

a multibillion dollar effort to take China from a commodity proVerDate Nov 24 2008 11:23 Jun 10, 2019 Jkt 037690 PO 00000 Frm 00030 Fmt 6633 Sfmt 6633 U:\MY DOCS\HEARINGS 115\HEARINGS\115-167 CHRIS
27 

ducer to a leader in major advanced manufacturing exports from 

alternative energy to rail equipment. 

Manufacturing USA is our response. There are 14 applied research institutes targeting technologies like 3D printing in Youngstown, robotics in Pittsburgh, and super-strong, lightweight metals 

in Detroit. But, to truly compete, we have to step up Manufacturing USA into its full plan of 45 institutes and provide permanent Federal funding matched by the private sector. 

Now manufacturing can only grow if it has a workforce for the 

future. In Chicago, our research found there are nearly twice as 

many jobs open as workers hired. But manufacturing workforce 

pipelines, apprenticeship, and vocational education have withered. 

And a generation who experienced industrial decline tell their children to shun factory jobs. 

Congress can help by devoting resources that incentivize employers to double the number of apprenticeships in manufacturing in 

5 years and provide new, focused resources at the K–12 level. 

These programs need resources for mentoring and support services 

to help women and people of color to break into the trades. 

That is the approach of Manufacturing Renaissance in Chicago 

to help some of the young people in some of the most violenceprone neighborhoods in the Nation to get industry-recognized credentials they need for high-paying jobs. And surely manufacturers 

will have more success recruiting when they pay decent wages, respect collective bargaining, and provide safe workplaces. 

Communities are developing innovative ways to work with local 

manufacturers to save and grow jobs, relying on smart, more sustainable approaches than simply offering tax giveaways. Pennsylvania Strategic Early Warning Network saves thousands of jobs by 

providing targeted business turnaround assistance to small and 

medium-sized companies at risk of closure. 

Federal policies should give these communities stronger tools by 

strengthening bedrock programs like the MEP, new initiatives like 

layoff aversion in WIOA, and the recently-authorized Defense Manufacturing Community Partnership Support Program. 

Lastly, the Federal Government should incentivize further private investment in manufacturing through an industrial bank focused on national needs and a clearinghouse that mobilizes impact 

investors to bring sustainable manufacturing jobs back into distressed communities. 

In conclusion, manufacturing is regaining its footing, but there 

is much more to be done. I urge the committee to continue its focus 

on boosting the manufacturing sector, and I welcome the opportunity to work with you in the future. 

[The prepared statement of Mr. Stettner follows:] 

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THE CENTURY 

FOUNDATION 1

1 Bernard L. Schwartz 

REDISCOVERING 

GOVERNMENT 

Initiative 

Testimony of Andrew Stettner 

Senior Fellow, The Century Foundation Bernard L. Schwartz Rediscovering Government 

Initiative 

Subcommittee on Digital Commerce and Consumer 

"Built in America: 

Jobs and Growth in the Manufacturing Sector." 

Wednesday, September 26, 2018 

Good morning Chairman Latta and ranking member Schakowsky. First let me commend the 

committee for holding this hearing on the state of U.S. manufacturing. Over the past year, the 

Century Foundation and its Bernard L. Schwartz Rediscovering Government Initiative sponsored 

the High Wage America Project-researching and touring the Industrial Midwest to understand 

the future of manufacturing as a provider of good jobs and economic growth. Representative 

Schakowsky, several of the community leaders involved in the tour had a chance to meet you 

two weeks ago today when they came to Washington to present our findings, which I have 

submitted for the record.' While no one has such rose colored glasses as to believe 

manufacturing will ever provide 30 percent of jobs like it did in the Midwest thirty years ago, 

the message was loud and clear. Manufacturing matters to communities, their diverse 

economies and to shared prosperity. 

1 Andrew Stettner and Joel Yudken, "A Federal Agenda for Revitalizing America's Manufacturing 

Communities," The Century Founation, September 24, 2018, https:l/tcf.org/contenUreportlfederalagenda-revitalizing-americas-manufacturing-communities/. 
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The sector is critical to competitiveness as Manufacturers contribute 68 percent of all U.S. 

private research and development spending. Our ability to be a global leader in the clean 

economy depends on a robust manufacturing sector to create the next generation of green 

products. Growing manufacturing is the only way to cut the trade deficit, which reduces 

national income by $566 billion each year. And, our national security is compromised by 

reliance on foreign suppliers at a time when governments have shown a willingness to engage 

in cyber and economic warfare2 

But perhaps most importantly, Americans look to manufacturing as a source offamily 

supporting jobs. Our research finds that in small towns in the industrial states from Michigan to 

Mississippi, manufacturing still accounts for 1 in 4 private sector jobs. Manufacturing brings 

high tech jobs to small towns like Phillips, Wisconsin, where Phillips Medisize has developed 

from a manufacturer of action figures to a worldwide provider of advanced molding and 

engineering services. Manufacturing is especially important to Americans without college 

degrees who earn $150 more per week than they do in other industries. 3 

The time is right for Congress to take action build a proactive national manufacturing strategy. 

Resilient manufacturers have added back 1.26 million (driven by 345,000 from auto 

manufacturing) of the 5.7 million jobs it lost from 2000 to 2010. There are serious concerns, 

2 Joel Yudken, "Manufacturing Insecurity: America's Manufacturing Crisis and the Erosion of the U.S. 

Defense Industrial Base," AFL-CIO, 2010 

https://d ig italcommons. ilr. cornell. edu/cg i/viewcontent. cg i?article= 1122&context= laboru nio ns 3 Andrew Stettner, "Why Manufacturing Jobs are Worth Saving," The Century Foundation, June 13, 2017, 

https://tcf.org/contentlreportlmanufacturing-jobs-worth-saving/. 
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however. Excluding the computer and electronics industry, manufacturing real output growth 

has only been 63 percent of the rest of the private sector from 2000 to 2016. 4 The loss of 

production capacity has kneecapped our ability to innovate, as America has ceded its edge in 

high tech manufacturing to advanced East Asian nations and Germany. And, while 

manufacturing jobs still pay 10 percent more than other jobs, the wage advantage has eroded. 

Low-paid temporary workers represent 11 percent of the manufacturing workforce, up from 

2.3 percent in the 1989s 

A national manufacturing strategy must go beyond the international trade and tax issues that 

dominate discussion of manufacturing in Washington. Rather, federal policies should focus on 

investments that create the conditions for manufacturers to compete and thrive in a global 

marketplace, and for the manufacturing workforce to prosper. The manufacturing 

communities we have worked with over the past year are looking for the federal government to 

support public-private partnerships that spur high tech manufacturing; reinvest in workers; 

retain and reshore good jobs; and mobilize capital. 6 

Spurring innovation: The future of U.S. manufacturing relies on being the most high tech, not 

the lowest cost. In Cleveland, we visited the ArcelorMittal steel mill, the first in the world to 

4 Susan Houseman, "Understanding the Decline of U.S. Manufacturing Employment," W.E. Upjohn 

Institute Working Paper, 2018 

https://research. u pjohn. org/cg i/viewcontent. cg i?article-1305&context-u p working papers. 5 Lawrence Mishel, "Yes, manufacturing still provides a pay advantage, but staffing firm outsourcing is 

eroding it," Economic Policy Institute, March, 2018, https://www.epi.org/publication/manufacturing-still-providesa-pay-advantage-but-outsourcing-is-erodinq-itl 

6 Joel Yudken, Tom Croft and Andrew Stettner, "Revitalizing America's Manufacturing Communities," 

October 2017, https:l/tcf.org/contentlreportlrevitalizing-americas-manufacturing-communities/?agreed=1. 
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create a ton of steel with a single hour of labor, which sees a strategic advantage in 

environmental regulations that increase demand for high grade lightweight steel. Our 

competitors understand this. The Made in China 2025 campaign is a multi-billion-dollar effort 

to take China from a commodity producer to a leader in major advanced manufacturing exports 

from aerospace and alternative energy to railway equipment. 

The new Manufacturing USA program is our response. There are fourteen applied research 

institutes targeting technologies like 30 printing, in Youngstown; robotics, in Pittsburgh; and 

super strong lightweight metals, in Detroit. Each brings together world class researchers with 

companies to solve technological problems and bring them to market, but the program is not a 

big enough to enable US manufacturing to truly compete. We have to step up Manufacturing 

USA into its full plan of forty-five institutes and provide permanent federal funding 

(emphasizing job creation) matched by the private sector. 

Reinvesting in workers: Manufacturing can only grow if it has a workforce for the the future. In 

Chicago, our research found there were twice as many jobs open as workers being hired. 7 One 

problem is that the programs on which manufacturers rely to create a pipeline of new 

workers-apprenticeship and vocational education-have been allowed to wither. And a 

generation who experienced industrial decline are telling their children to shun factory jobs. 

7 Teresa Cordova, Andrew Stettner, and Matt Wilson, "Revitalizing Manufacturing and Expanding 

Opportunities for Chicago's Black and Latino Communities," The Century Foundation and the University 

of Illinois-Chicago, Great Cities Institute, June, 2018, https:lltcf.orglcontent/report/revitalizingmanufacturing-expanding-opportunities-chicagos-black-latino-communitiesl. 
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Congress can help by devoting resources that incentivize employers to double the number of 

manufacturing apprenticeships in five years. There needs to be new focused resources at the K12 level, to expose young people to manufacturing with programs where they earn industryrecognized credentials and gain work experience. These efforts need to reach those in greatest 

need of opportunities, giving programs resources for the kind of mentoring and services needed 

to help women and people of color break into the trades. That's the approach of 

Manufacturing Renaissance in Chicago, which has helped young people in some of the most 

violence-prone neighborhoods in the nation get the skills they need for high-paying production 

and engineering jobs. And, surely, manufacturers will have more success recruiting when they 

pay decent wages, respect collective bargaining, and provide safe workplaces. 

Retain and reshore industries: Communities are developing innovative ways to work with local 

manufacturers to save and grow jobs, relying on smarter, more sustainable approaches than 

simply offering big tax giveaways. Pennsylvania's Strategic Early Warning Network has saved 

thousands of jobs by providing targeted business turnaround assistance to small- and mediumsized companies at risk of closure. 8 Chicago translated its need to replace aging subway cars 

into a new rail car manufacturing plant that will serve as an anchor for the distressed South 

Side neighborhood9 Federal policy should give communities stronger tools to build these 

partnerships, by strengthening bedrock programs like the Manufacturing Extension Partnership, 

newer initiatives like the layoff aversion policies in the Workforce Innovation and Opportunity 

8 https://www.steelvalley.org/sewn. 

9 Corilyn Shropshire, "First step to new CTA rail cars: Build the factory in Chicago," Chicago Tribune, 

March 16, 2017, http://www.chicagotribune.com/business/ct-cta-new-railcar-plant-0316-biz-20170315-

story.html 
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Act, and the recently authorized Defense Manufacturing Community Partnerships Support 

Program. Indeed, the time has come for Congress to support a Race to the Top for the new 

advanced manufacturing technologies of tomorrow, and cut off the race to the bottom of tax 

cuts competing for the factories of today. 

Mobilize capital: Most of the country's venture capital is invested in software companies (57.4 

percent). 10 When it comes to hard technologies that require manufacturing, the pattern is now 

"invent here and manufacture there." The federal government should incentive further private 

investment in manufacturing through an industrial bank focused on national needs and a 

clearinghouse that mobilizes impact investors to bring sustainable manufacturing jobs back into 

distressed communities. 

In conclusion, manufacturing is regaining its footing but there is much more to be done. 

Communities have counted on manufacturing for a source of middle class jobs. After years of 

decline, there's potential for manufacturing to reclaim that critical role and support our world 

economic leadership. But, that will only happen through a coordinated agenda of investments 

that improve our competitiveness and sustain our world class manufacturing workforce. I urge 

the committee to continue it focus on boosting the manufacturing sector, and I would welcome 

the opportunity to work with you on this urgent priority for our nation. 

10 Sridhar Kota and Thomas C. Manoney, "Manufacturing Prosperity: A Bold Strategy for National Wealth and 

Security," Mforesight, June, 2018, 

https://medium.com/@MForesight/manufacturing-prosperity-a-bold-strategy-for-national-wealth-and-security65d2a97d6dQe. 
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Summary of Testimony 

• Over the past year, the Century Foundation and its Bernard l. Schwartz Rediscovering 

Government Initiative sponsored the High Wage America Project-researching and 

touring the Industrial Midwest to understand the future of manufacturing. 

• Manufacturing is as a source of family supporting jobs, especially in small towns in 

industrial states where it still accounts for 1 in 4 private sector jobs. For workers without 

high school degrees, manufacturing pays $150 more per week. 

• Congress should take action build a national manufacturing strategy. Manufacturers 

have added back 1.26 million jobs, but there are lingering problems with manufacturing 

production, our ability to compete internationally and to sustain a well-paid workforce. 

• Manufacturing communities are looking for the federal government to support publicprivate partnerships that spur high tech manufacturing; reinvest in workers; retain and 

reshore good jobs; and mobilize capital. 11 

• These investments represent a race to the top for the world leadership in advanced 

manufacturing, and are a critical to the U.S. becoming a world leader in environmental 

sustainability. 

• For example, the Manufacturing USA initiative is too small to allow us to compete with 

China and should be expanded to its full vision. Furthermore, federal investments are 

needed to rebuild apprenticeships and vocational education programs that recruit the 

manufacturing workforce of tomorrow. 

11 Joel Yudken, Tom Croft and Andrew Stettner, "Revitalizing America's Manufacturing Communities," 

October 20 17, https://tcf. org/contentlreport/revital izing-americas-manufactu ri ng-communities/?ag reed-1 . 
35 

Mr. LATTA. Thank you, Mr. Stettner, for your testimony. 

Mr. Anderberg, you are recognized for 5 minutes for your opening statement. 

STATEMENT OF ERIC ANDERBERG 

Mr. ANDERBERG. Thank you, Mr. Chairman, and thank you, 

Ranking Member Schakowsky, and thank you, Congressman 

Kinzinger, for allowing me the opportunity to be here today. 

Dial Machine, we are family-owned for 52 years, a precision contract manufacturer. We make parts for various industries, mining, 

oil and gas, a lot of fossil fuel. We do work for the government, defense, the national laboratories. 

And I can tell you today, I don’t want to sound like a broken 

record, but our backlogs are way out and the work is tremendous 

today. In my 25 years, I have never seen such optimism. My father 

has been in this industry for 61 years and never seen the optimism 

and the rate at which we are growing here today. 

Currently, to give you an idea, our sales, as of the third week of 

September, we are 30 percent over all of last year, over 50 percent 

over all of 2016. So, things are on the right track. 

I think three things have happened in Washington that have 

helped the manufacturing sector. That is the tax, the regulatory, 

and the trade policy changes that have been coming forward. 

Tax, the C corp and the last tax legislation, the C corps got an 

income tax reduction to 21 percent. That has created incentive for 

the large corporations to bring work back. And I can tell you personally it has happened; we are benefiting from it. I have been told 

from companies like Caterpillar that more is coming. Large corporations are also investing in their plant and equipment with that 

money. 

S corps, such as ourselves, we didn’t get the tax cut that the C 

corps got. Hopefully, that could be changed. But that extra cash 

and capital is being put to use. We are putting it to use. 

And also, along with that is the increase in the expensing in the 

179. And, then, increasing the accelerated depreciation back to 100 

percent has been a big boost, and it is an extremely useful and important tool for manufacturers such as ourselves to be able to afford to invest in capital equipment. 

Because of all the increased activity, there is a scarcity of labor. 

And because of tax—I credit the tax policy—the wages have increased. We have been increasing the wages of our people, in part, 

because it is a defensive mechanism to keep other people from 

stealing our people. And also, we are offering higher wages for people to start as applicants at our place. 

The regulatory environment. Rolling back regulations that were 

hurting the fossil fuel industry, I will give you an example, coal. 

We do a lot of work for Caterpillar, and all the large mining bulldozers, we have parts in each machine. Starting in 2013, we went 

from 2011–2012 we were making about six to eight sets of bulldozers a day. In 2013, one model dropped from 400 a year to 56 

per year, and by 2016, we were down to about a half bulldozer 

shipping a day. We are back to five or six, but we are constrained 

because of capacity or people. 

36 

So, the regulatory pushback has been terrific. My family, we also 

farm. And so, you cannot have a regulatory environment out here 

that is suggesting we are going to regulate puddles of water on 

your farm or we are going to tax every head of cattle for flatulence. 

That sends a terrible message to industry, farming, and ranchers; 

we are not going to invest. You can’t do it. 

And then, trade. This is probably the most important part and 

probably the most significant change in 40 to 50 years. It is the 

first time an administration has acknowledge the problem we have 

with trade, international subsidized work coming into this country 

or subsidized product. The Chinese steel industry, the Chinese 

have been huge offenders, and we just cannot compete. That 

change and the talk of subsidy, if you come to Rockford, for example, I can point out many industries we have lost over the past several decades. When people talk about we are starting a trade war, 

well, I am here to tell you we have been in a trade war in this 

country for over 40 years, and it is the first time it has been acknowledged. It is the first time we are doing something about it. 

And this has created a level of confidence, too, that has helped to 

invest in your plant and equipment. 

The most significant challenge that manufacturing has, you have 

already heard it, people. We can’t get them. We need 10 to 15 more 

skilled individuals on our floor right now. And I am here to tell you 

that we are turning work away. If I had the capability, I could double the size of my plant if I had the capacity of people, and we just 

can’t get them. 

Fingers can be pointed every direction. I think industry didn’t do 

a good enough job marketing ourselves to the students, to parents, 

to educators, and the vo-tech schools closed years ago, but they are 

reopening again, and that is promising. 

Apprenticeship programs. The small guys are training; the large 

companies are not. And I think we need to enlarge the pool of labor 

that everybody can work from, and we need to do something to 

incentivize the large corporations to do so again, because they just 

won’t because it doesn’t look good on quarterly numbers, quite 

frankly. So, anything that could be done with that would be tremendous. 

There is just too much to talk about to do it in 5 minutes. I hope 

I get some good questions, that we have good conversation today. 

Thank you. 

[The prepared statement of Mr. Anderberg follows:] 

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Written Testimony of Eric Anderberg 

Vice President of Dial Machine, Inc., Rockford, Illinois 

Before the House Energy and Commerce Committee 

Subcommittee on Digital Commerce and Consumer Protection 

"The State of American Manufacturing" 

September 26, 2018 

I would first like to thank Chairman Latta, Ranking Member Schakowsky, my Congressman 

Adam Kinzinger and the Members of the Subcommittee on Digital Commerce and Consumer 

Protection for inviting me to testify to today as a small Midwestern manufacturer and to attest to 

the current condition of American Manufacturing. 

My name is Eric Anderberg and I am the Vice President and co-owner of Dial Machine, Inc., 

which is a 52-year-old family owned contract manufacturer of high precision medium to large 

components and assemblies located in Rockford, Illinois. We employ currently about 60 people 

of whom about 45 of them are skilled tradesman, machinists and assemblers. We have a need 

currently for at least another 10 to 15 skilled workers that we just cannot seem to fill. We 

manufacture for various industries, including government defense and national laboratories. 

Our primary customers are large industrial companies that serve the mining, construction, oil & 

gas, power generation and nuclear science industries. 

The current state of American manufacturing right now is outstanding. Our backlogs have 

improved dramatically compared to over the past five years and the optimism in my 25 years 

has never been this high. My father, who has been in this industry for over 61 years, has never 

seen such a run up in demand and the outlook from customers and vendors be so great. Our 

sales for the year at this point, after the third week of September are already almost 30% over 

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our total sales for all of 2017 and are over 50% greater than all of 2016 and we have three 

months yet to go in our calendar year. 

One thing that I find unique in this manufacturing environment right now is that it seems almost 

every sector is in this position. Over the years, through our contacts and associations, generally 

you would find that maybe certain industries like ones tied to oil & gas may be up while maybe 

automotive may be down as the price of energy was up and perhaps other industries would not 

be as busy as the industries we serve. In conversing with other small manufacturing owners 

that serve other industries other than the ones we serve, I have found that almost all the 

manufacturing sectors are busy, at least I have not heard of any one industry or manufacturing 

business that is not busy. The consensus is that this upturn and period of manufacturing growth 

has legs and will persist for the foreseeable future if there are no detrimental changes to the 

economy. 

I am sure those in Washington would like to know why industry is doing so well at this point? 

The answer is really simple, confidence. One thing you hear a lot about is the confidence that 

customers and their suppliers have today. Everyone in industry right now has confidence in a 

bright future that is conducive to installing and deploying capital, making investments in your 

operations and your people. 

I think there are three main components related to our government and the current policies that 

explain why there is confidence and why the manufacturing sector is running on all cylinders 

right now. Those three items are the changes in the tax code, the reduction in burdensome 

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regulations and a focus on improving the conditions of trade or leveling the playing field for 

American manufacturers. 

TAX 

This confidence that we see for one has been spurred by changes in tax policy in Washington. 

First and foremost, we have an income tax cut. The reduction in C Corporation taxes to the low 

20's as a percentage has helped larger corporations to be incentivized to move production and 

investment back to the United States. We have experienced this first hand as we have seen 

work that has been sent offshore by our larger customers in the past, now starting to come 

back. Also, work that had the potential of being sent offshore seems to now have more of a 

long term plan to stay here. The larger corporations are also investing heavily in capital 

equipment and upgrades in their plants right now. 

For the S Corporations for companies such as ourselves or pass-throughs, the tax cut we 

received is not as great and hopefully that could be adjusted in the Tax 2.0 rewrite. Since the 

majority of small businesses are incorporated as pass-through and since over 70% of all new 

jobs are created by small businesses it only makes sense to help us keep more of our capital 

and use it toward growth and investing in our companies and creating more jobs, after all private 

industry can better deploy that capital for economic growth than any government agency or 

program. I can personally say that the tax cut that we have received is helping us invest and 

improve our operation. 

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Another important part of the Tax Bill was increasing the 179 Expensing and increasing the 

Accelerated Depreciation back to 100%. These have been critical for small manufacturers such 

as ourselves in helping us to be able to afford to invest in new capital equipment that helps to 

make us more competitive and helps to automate some of our operations. This year alone so 

far, we have added two new machines with a capital cost of over $1.5 million and the 179 and 

Accelerated depreciation play a big part in helping to make the decision to outlay that much for 

our operation at once. Several of my counterparts that I have talked to have also invested in 

new capital equipment this year, I actually do not know of anyone in our industrial circle that has 

not It is not complicated, when the incentive is there, business will use it and the economy will 

grow. 

By leaving more capital in the hands of business and job creators this is spurring all of this 

investment and creating the job growth, low unemployment and wage increases that we are 

currently witnessing. A good example is when a farmer or a mining operation take advantage of 

the extra income, 179 or Accelerated depreciation, it trickles down to small manufacturers like 

us as their increased investment in equipment, increases our investment in equipment and our 

facility to meet the demand of our customers that make that equipment for the farmer or the 

miner. 

Wages have also increased because of the activity from the tax cuts. In our small operation 

alone, we have increased wages for our employees and we are offering higher than usual 

wages for applicants to start. We have to, if you want to attract and retain the best you have to 

offer and be the best We have done some of the wage increases, number one because our 

people deserve it, they've earned it and I will also admit it is also a defensive mechanism to 

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prevent having another business steal away your employees. There is a severe scarcity of 

skilled labor so the wages must rise and I can attest personally that they are. As you all have 

heard by now, there is a severe shortage of skilled and willing workers today to do the work that 

is being demanded. This is our biggest challenge at the moment. 

REGULATION 

Another item that has instilled confidence and investment in American manufacturing has been 

the Administration's policy and that of the Congress to reign in and roll back excessive 

regulation that thwarts economic growth. As I mentioned earlier, a good part of our business is 

tied to the fossil fuel industry as there are many industries and jobs that are tied to fossil fuel 

energy. For one, the past policy of "necessarily bankrupting" a coal fired power plant was 

harmful and not conducive to investment in fossil fuel exploration and extraction equipment, 

namely the mining industry. I would argue that after the 2012 election the regulation pedal was 

pushed to the floor on these industries. The government's decision to pick winners and losers 

for our energy supply hurt mining and oil extraction. Those industries contracted and many coal 

mines went out of business. Our largest customer, Caterpillar, produces a large portfolio of 

equipment for coal mining and mining in the oil sands in Canada. Caterpillar suffered for the 

first time in their 100+ year history a 4+ year slump in sales of equipment, especially mining 

equipment. It affected us greatly, we also experienced over a 4-year slump heading into 2013 

up until mid 2017, and many in our industry didn't make it. To give you an idea, Caterpillar built 

in 2012 over 400 of their largest mining bulldozers, the 011 T, the following year in 2013 they 

built 56. At Dial Machine we have components that we make for all of the large mining 

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bulldozers, we went from shipping 6 to 8 large bulldozer sets a day in 2012 to as few as Y, of a 

bulldozer a day in 2016. 

Today, after the change in policy we are now back to 5 to 6 large mining bulldozer sets a day for 

shipment, and if we could ship more, Caterpillar would take them. The regulatory roll back and 

the eradication of the uncertainty caused by onerous government regulation has been a huge 

boost to industry confidence. 

As my family and I also farm, I was aware of the Clean Waters Act and its potential overreach. 

According to associations like the Farm Bureau their legal analysis stated that if the Waters of 

the U.S. Rule expanding EPA's reach were to take effect throughout the country, then 

government could regulate even a puddle of water on your farm, in addition to a contained manmade cooling pond on a manufacturing site. This type of overreaching government policy is not 

conducive to a healthy atmosphere for investing in your farm or ranch, or even your 

manufacturing business. The outcomes of those types of policies were clear to manufacturers 

the past four and a half years. Again, when you have an agency that wants to exert so much 

control over the private sector that it proposes taxing every single head of cattle for flatulence, it 

creates a terrible message to the private sector as well it should. That type of an attempt of 

government control destroys confidence, creates uncertainty and hurts economic growth. We 

are thankful for the one hundred and eighty degree turn to a common-sense approach with 

these regulatory agencies. 

For many years it has puzzled me, why agencies such as the EPA and OSHA have to be so 

adversarial to business. We all want a clean and safe environment; we all want a safe place to 

work. Perhaps instead of the operation and policies of these agencies being so threatening and 

adversarial, these agencies could be more of a partner and work with those businesses and 

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industries to improve areas that need to be changed for the better, not just fee takers and legal 

bill escalators for a gotcha moment. It is refreshing and encouraging to see the changes that 

are taking place in these agencies today because of the actions that this Congress and 

Administration have taken to reinforce this common-sense change. 

TRADE 

A third change from Washington has come from the Administration and the policy of ending 

unfair trade deals and practices of our foreign trading partners. This is probably the most 

significant change to come out of Washington in the past 40 to 50 years for American 

manufacturers. It is finally the acknowledgment from an Administration that our industries have 

been preyed upon by unfair trading practices from foreign governments. It also has created the 

signal that we finally have someone in Washington that understands how detrimental our 

lopsided trade imbalance has been and the effect in the long term this has on our nation's 

wealth. Our wealth generating capability is vital to maintain the U.S. economy and our standard 

of living. As a former congressman once told me, "If you can't make it, mine it or grow it, you 

are not generating wealth and you will become a third world nation". 

The unfair trade practices have been the most damaging to our industry in this country for many 

decades. The term may be over used but foreign governments have definitely "weaponized" 

their industries in the form of subsidy and have used that to attack free market, independent 

industry. There are so many examples to give. Yes, the steel industry is one. China is by far 

the biggest violator and as an American manufacturer who needs to buy steel, I fully support the 

decision to go after China's aggression in trade. The Chinese have become the world's leading 

steel producer in less than 20 years, ever since being allowed to enter the WTO. Back then the 

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world steel making capacity of China was in the higher single digits as a percentage, today it is 

around 50% and their steel output has increased by a factor of eight-fold. Did China attain that 

percentage because they are more efficient, productive or have a cheaper operating cost than 

other countries? Or was it because it was a strategic policy decision and dictated by the 

premiere and the national government? Granted, they have increased their capacity to help 

build their country's infrastructure and development, but for the past 10 years their exports of 

steel have been growing rapidly, from 2009 to 2017 their steel exports grew over 420%! When 

you are a communist command and control economy you can control world outcomes, if your 

trading partners are asleep. 

Of note, we serve some companies that make steel mill equipment who sell to the Chinese and 

they have told us that the Chinese have taken their trade surpluses and invested heavily into 

building the latest, state of the art steel mills, with equipment mainly from Western Europe. We 

have also been told that although China is now the largest steel producing country, they have 

installed capacity to make much more. So, in the end, if China were left to continue on their 

course unchecked, what would happen to the free market production of steel and other free 

market industries? Last year China produced over 800 million tons of steel, the United States 

produced just over 80 million tons. 

The companies that I mentioned who produce equipment for steel mills are now extremely busy 

and gearing up for the upgrades that are taking place in American steel mills. We have done 

work for Arcelor Mittal and U.S. Steel; both companies are undergoing investment and upgrades 

that haven't been seen in this scale since the 50's. The reason again, is confidence because 

our government is finally acting to correct the unfair trading practices and to put an end to 

China's subsidies of its steel industry. 

To help validate the Administration's stand on unfair trade, I will give you a couple examples 

direct from Rockford and its past. Rockford at one time was the machine tool capital of the 

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world. A machine tool is a machine that cuts or forms metal to make parts for other machines 

precisely, in essence a "mother machine". Everything we possess physically has in one form or 

another been made by a machine tool. If you go back to the late 70's and the 80's the big 

offender of trade was Japan. The Japanese identified and subsidized their industries to get 

market share and to subdue foreign competition. One industry was the American Machine Tool 

industry. Japanese visitors to the International Manufacturing and Technology Show (IMTS) 

that is held once every two years in McCormick Place in Chicago could be seen taking photos of 

American made machines, even getting on the ground and taking pictures of the underneath of 

the machine tools so they could be copied and improved in Japan back then. Over the years, 

what you have seen since the late 70's and the 80's has been the death of the American 

machine tool industry, there are few companies left. And if you had visited the IMTS show last 

week at McCormick Place, you would have seen that there are very few American machine tool 

companies at the show any more, but the largest majority are now Japanese. 

Case in point, in 1985 my father wanted to buy a new machining center and he wanted to buy 

one made from Cincinnati Milacron in Cincinnati Ohio, the cost was over $500,000 for that 

American made machine. The dealer that represented the Cincinnati machine came to my 

father and introduced another brand, that was new to the U.S, it was Japanese, it was made just 

as well as the Cincinnati but its price was $300,000. My father had no choice. How could the 

Japanese build and sell a machine for less than 60% of the cost of a machine made just a 

seven hour drive away from Rockford? Were the Japanese more efficient and productive; were 

their costs that much lower? No, it was subsidy and while the American Machine tool industry 

died a painful slow death over three decades, our government looked the other way and 

companies that were once global leaders like Cincinnati Milacron are now gone. Still today, I 

have talked to American machine tool leaders, such as Tino Oldani, President/CEO of Ingersoll 

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Machine Tools in Rockford and they have all told me that this game is still being played but now 

the countries that subsidize and dump are Taiwan and Korea. If we are to preserve a crucial 

part of what is left for our manufacturing base and national defense, we must, you must address 

this. 

Another example is the fastener industry. It was always a standing joke that Rockford was the 

"screw capital" of the world. For decades, if you needed a fastener the greatest chance is that it 

came from Rockford. But, starting in the early 80's things changed and again the biggest 

offender to start at that time was Japan. I have talked with and know people who used to work 

and manage at places like Rockford Products and Elco, all were major fastener manufacturers 

back then. Starting in the late 70's, early 80's, fasteners started showing up from places like 

Japan and later Taiwan that were subsidized. Rockford Products and Elco could not compete 

when finished fasteners were allowed to be sold in our country for less than the cost it took for 

Rockford manufacturers to buy the raw material. Rockford Products and Elco are now both 

gone along with numerous others. There are too many Rockford Products and Elco stories in 

this country that have succumbed to subsidized, unfair trade. 

There are other nations that do not get the press that China does that are cheating today as 

well. Another good example is Brazil. Brazil has a policy of "content requirement", so if you are 

an American manufacturer and you want to sell your line of tractors in Brazil, you may be 

required to build a plant and produce some of that equipment there and not just for Brazil but 

also for worldwide export. I know of two current examples of where this is happening but I am 

reluctant to write in the record their names. The Brazilian government also will subsidize the 

manufacture of say that tractor. For example, for each tractor that is built in that plant the 

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company will get a subsidy check. In the one instance that I know of, the American plant is 

cheaper in cost to produce the machine versus the Brazilian plant, but the Brazilian government 

writes that subsidy check to make up the difference, plus. There are also instances of 

components that were once made in U.S. plants now being subsidized at the Brazilian plant, to 

be shipped back for finish assembly in the U.S. 

Our country has truly been ripped off over the past several decades by foreign owned and 

subsidized industry. The examples past and present are too many and our actions against that 

practice have been nil until now. The examples I have given could have been and can still be 

prevented. The practices of subsidy and cheating have clearly cost us high paying 

manufacturing jobs and hurt our industrial economy. I fully applaud what the Administration is 

doing to stop this. It has been happening for many decades. True, in the case against China 

we may see some increased costs in steel, although those cheap steel prices were artificial, and 

we may lose some business because of this but we need to place our stake in the ground. In 

fact, the scope of the steel tariffs against China and other foreign subsidized sources should be 

broadened to any other steel components or finished products to make sure that finished 

product made from subsidized steel doesn't come in and avoids the steel tariff. This subsidy 

and cheating has to stop or if left unchecked any industry could be next. 

It is laughable when I hear people say that the President is getting us into a trade war when the 

fact is we (American industry) have been in a trade war for many decades and losing it badly 

and no one ever really paid attention to us until now. My hope is that every foreign partner that 

we trade with has their trade policies examined and our trade policies can be reciprocal. None 

of the manufacturers that I know want a hand out or special favor or subsidy, we are not afraid 

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to compete with the world, just so long as those that we compete with are playing on the same 

terms and the same field. If this were to be accomplished, American manufacturing will win the 

day and will make a tremendous comeback. 

I mentioned earlier that our company does work for the national laboratories, which fall under 

the Department of Energy and are under this House committee. According to the Buy 

American, Hire American Presidential Order, Federal agencies are to procure from American 

business whenever possible when spending U.S. taxpayer dollars. What we have found and 

experienced is that currently for bidding work to the national labs that only a 12% penalty is 

being assessed to foreign bids because of the Presidential Order. As demonstrated by some of 

my subsidy examples, this is ridiculously low and this is definitely an issue that this Committee 

could and should address. Perhaps some of these tax, trade, federal procurement and 

regulatory issues that face American manufacturers speak to something that I think Congress 

could do as well, that most other industrialized nations have done and that is to finally create a 

national manufacturing policy. 

THE BIGGEST CHALLENGE FOR MANUFACTURERS TODAY 

I mentioned in the beginning of the inability to find skilled labor, or any labor that wants to show 

up for work every day on time a serious challenge. We need another 10 to 15 skilled people 

right now in our company. The workload and demand right now is so great that we have been 

turning away work because we cannot get the labor to do the work. We could easily double the 

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size of our operation and have full order books if we could only get the people. This is not only 

a problem for manufacturers but for all employers today, we are experiencing a high level of 

demand that there are not enough workers for and we are also experiencing societal issues that 

are crippling business. 

This issue of trying to hire younger people into a trade is not just a problem in the United States, 

it is a global problem and there is no easy answer. We have a vendor that is a German 

machine tool manufacturer and periodically we have some of their service technicians at our 

facility and we have come to know them well. On the past two recent visits we have had 

discussions about this problem. They have told us as they travel to state of the art 

manufacturing plants all over Europe, Russia, China and India that no matter where they go, 

there are no "younger" people in the manufacturing plants. They have been told in India and 

even China that the younger generation does not want to do this type of work even though it 

pays well above the average wage. They are experiencing in Germany and Europe the same 

phenomena of not being able to hire and keep younger workers in this trade just as we are here. 

I do not see any silver bullet to fix this situation; it is a serious uphill climb. We have been trying 

to hire people, and we have had some success but like every other business we are falling well 

short of our needs. There has definitely been a societal shift with the younger generations and 

it is challenging to figure out what it takes to get them into a trade. This is something we have 

been trying to figure out and I have no answers for this yet. 

If one is to point fingers at why this phenomenon has happened, I would first point fingers at us, 

industry. We have not done a good enough of a job of showcasing manufacturing today and 

exposing students and educators to what we do. We are not dungeons or dirty places to work; 

we are in fact state of the art, clean, highly technical environments and the pay is well above the 

average. The growing numbers of operations like ours are increasing the technology every year 

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and automation and the skills required are not just manual but also highly technical and require 

high level math, programming and computer knowledge. In Rockford we do have a 

Manufacturing Day and we have job shadowing where students come into our factories and 

learn about what the reality of a manufacturing facility is and what a career can be, it is helping 

but we have a long way to go. 

I do believe that our educational system has to share some of the blame as well. Over 30 years 

ago all vocational programs in our area were shut down in the high schools and everything 

became college prep. This created a significant generational gap and in the schools a stigma 

was created about working in a manufacturing facility. In Rockford it also contributed to a higher 

dropout rate, as kids that didn't want to go to college saw no purpose in finishing high school. 

However, today that has changed, at Rockford Jefferson High School we have a new vocational 

program that started back up about 5 years ago and focuses on manufacturing and is doing a 

great job, another Rockford high school is also starting its vocational program again. I have 

talked to the administrator of the Jefferson program and they plan to start a curriculum where 

students work half the day at a company and do class work the other half of the day. We are 

making inroads but it is still a tough uphill climb to get past the stigma we have been fighting for 

over a generation with our youth. 

We also have a successful apprenticeship program in Rockford for the metalworking industry. I 

am on the board of the Rock River Valley Tooling and Machining Association, we are a chapter 

of the National Tooling and Machining Association and we have a volunteer board with two paid 

employees. Our main purpose is to administer our apprenticeship program through the local 

community college. The RRVTMA has run this program for over 60 years. Our program is a 

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four year, Department of Labor accredited program that offers several different disciplines for 

the metalworking trades. Each graduate of the program receives a diploma from the College, a 

certificate from the RRVTMA and a Journeyman certificate from the Department of Labor. 

Back in 2003 we had only 8 apprentices in our program, today we have over 120. The majority 

of which are employed by small manufacturing businesses. Our program is a great success 

today and has grown with the return of a vibrant manufacturing sector. The greatest majority of 

the apprentices are employed and sponsored and their education paid for by their employers. I 

want to make note of this because today the large corporations, specifically the publicly traded 

ones, no longer train, they shut down their apprenticeship programs 30 years ago as well. We 

need to enlarge the pool of skilled labor and the American manufacturing industry needs 

everyone to participate in training. The reality for the larger companies is that an apprenticeship 

program has become an expense on the income statement and in an era of where you have to 

please stockholders quarterly, an apprenticeship program doesn't directly seem to create a 

payoff for the investment in the short term. After all, it takes at a minimum of 4 to 5 years to 

create a proficient skilled metalworking tradesman. 

Last week at our RRVTMA Board meeting I brought up the fact that I was going to be here 

today testifying, I asked for comments that maybe I could share. The very first one was that we 

do not want or need another taxpayer funded government program and we all agreed 

unanimously. Rockford for example in the past has had taxpayer funded programs for 

manufacturing that at the start seem to be the right thing to do but never seem to follow through. 

As I discussed earlier and as we discussed last week in our Board meeting which was 

comprised of eight small manufacturing business owners, let us do the training and if you want 

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to do something, help us keep some of our capital to do so. In turn, to incentivize the large 

companies again just like you did with lowering the C Corp. rate, incentivize everyone to train or 

start an apprenticeship program, what about a tax deduction or credit? Perhaps a change in tax 

law could allow a company to write off or get a deduction on their tax bill for the wages of an 

employee/s that are in for instance a Department of Labor accredited four year apprenticeship 

program. It is just an idea, but we need to do something to create a bigger pool of skilled labor 

and everyone has to participate to achieve that for all of us to be successful. 

The fact is we are running on borrowed time right now. As of 2016, 75% of all Tool and Die 

makers were over 45 years of age and in the next three to five years according to one industry 

study two out of five skilled metalworking tradesmen will be retiring and it will be impossible to 

replace them with the labor pool that we have now, we need to start now to keep the momentum 

that we have for American manufacturing moving. 

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Mr. LATTA. Thank you very much for your testimony and what 

you say about can’t find workers and other folks. I have heard 

across my district it is the No. 1 issue out there. 

This is going to conclude our opening statements from our witnesses. And again, we appreciate you all being with us today. We 

will start the questions from our members, and I will start with my 

questions for 5 minutes. 

Ms. Moyers, if I could start with you, Jerl Machine provides precision metalworking products and services in Perrysburg, Ohio. 

Could you tell the subcommittee what trends you have seen in the 

marketplace for your products and services, and how that has 

changed over the last couple of years? 

Ms. MOYERS. Yes. Thank you very much. 

Up is what we are seeing. In the last 2 years, we have been 

steadily growing. We actually had, in 2016, one of our lower sales, 

lower profit margins. It was a little bit, I think, of a trend from the 

recession. We had gone up a little bit, and then, it went back down. 

But, since the end of 2017, we have seen nothing but up. We have 

grown our sales. We have grown our profits. Our profits are nearly 

20 percent so far for this year, when we were seeing only single 

digits back into 2014. And we have also increased our staff as 

much as we can. Of course, we need to increase it more. But we 

have our phones ringing off the hook and we are turning down 

work. 

Mr. LATTA. One of the things I know that has been mentioned 

already—and I just brought up again—as I have seen across my 

district, people just can’t find folks to work. That is a big issue out 

there, and it is a very competitive job market out there. 

What has been your experience with the wage competition in the 

last couple of years? 

Ms. MOYERS. Well, I think there are two issues. We can’t find 

people to work and we can’t find people that are skilled. What we 

are finding are unskilled who don’t necessarily want to come to 

work every day, who don’t want to work as hard as we need them 

to work. 

And the other issue is our skilled workers, there are so few workers for the jobs that we need to fill that our competitors, and also 

our manufacturing that we are friendly with, are stealing our 

workers, or attempting to. We have had, I believe, three or four in 

the past year that have said they have gotten offers from companies that we are actually friendly with and do business back and 

forth, because no one can find the workers. So, they have had to 

resort to poaching them from other manufacturers. 

We have raised wages because we have to. So, talk that corporations are not using the tax cuts and the money to raise wages is 

just simply not true, because we have to. If we don’t, someone else 

is going to and we will lose our workers. 

Mr. LATTA. You bring up the point about finding folks that are 

skilled out there and bringing them in. I know in some companies 

they have said, look, if you are willing to work, we will train you. 

With the legislation that was recently passed on career and technical education here, do you see that is going to be a help? I know 

in our area, and across Ohio with our high school career centers, 

and also working with our 2-year institutions out there—are you 

54 

seeing something we should be doing or do you see something that 

is bright on the horizon? 

Ms. MOYERS. It is a start. I think that investing in the vocational 

schools and the trade schools, we are very fortunate to have one 

in our backyard in Perrysburg, Penta Community College, and they 

cater to kids for everything from manufacturing to veterinary programs and culinary arts. They do a little bit of everything and it 

is wonderful, and we get a lot of our young employees from Penta. 

But it is a single facility and they can only cater to so many people, 

and we need more. 

We also need the vocational skills and trade skills exposed to 

students in regular K-through-12 schools. I think that we need to 

divert funding to bring back the industrial arts, to keep up fine 

arts. Even practical life skills, job interviews, balancing budgets, financial things, they need this. We have students who come in to 

job shadow and some of them we have hired. And our young employees don’t know how to fill out forms for health insurance, don’t 

know how to fill out the tax forms. These are vital life skills that 

they need to have and we need to be teaching them. 

Mr. LATTA. Also, you reference in your testimony the innovation. 

What is the climate out there and the regulatory changes that 

could help drive innovations for companies like yours? 

Ms. MOYERS. My grandfather has taught me a lot of things. And 

one of the things that he told me in the past couple of years, when 

we were scaling back some of those overhead costs that my colleague here was talking here, one thing he told me we are never 

able to cut is going to trade shows, going to machine shows, to 

learn about what they are doing, to see what the new technology 

is, because that is what is going to keep us in business. He has 

never been afraid to do that. 

He started his business with some hand tools and a drill press, 

and now we are mostly CNC machining. We are breaking into new 

industries all the time, and I think that is so important. And that 

is the way that manufacturing is going to survive. We can’t be 

stuck in our old ways. We can’t be stuck with old technology. That 

is why we need new, young blood into the manufacturing, to encourage it. 

Mr. LATTA. Thank you very much. 

My time has expired. At this time, I will recognize the gentlelady 

from Illinois, the ranking member of the subcommittee, for 5 minutes. 

Ms. SCHAKOWSKY. Thank you. Thank you very much. 

So, how many employees do you have, Mr. Anderberg? 

Mr. ANDERBERG. We have about 60 right now. 

Ms. SCHAKOWSKY. So, the three of you are small businesses. And 

so, I think this is a problem, some of the issues of the failure to 

close the wage gap or to invest in employees. It is probably different, and I think that you referred to that, that the private sector, large businesses, could do more to get involved in training, in 

being a public-private partnership. 

And you said, Mr. Paradowski, that your effort was to go to the 

government and say that there had to be improvements in education, and that it is really about government helping businesses 

rather than the other way around. I would suggest that your going 

55 

and saying more tax dollars should be spent in some ways is a copout in what industry ought to do in order to help. Like we have 

in Germany, there are programs, public-private partnerships with 

business to invest in the training of workers. I am not really asking 

a question here. That is my take and you can answer that. You can 

talk about that later. 

But I wanted to ask Mr. Stettner on the research that has been 

done. We have heard promises that the Trump tax cut would lead 

to increased worker pay and investment in manufacturing. However, we know that in the vast majority of cases—and I think this 

refers mostly to the larger corporations—that did not happen. In 

fact, economists analyzing the effect of the tax cuts found no significant sign of boosting investment or increasing wages. 

So, Mr. Stettner, was there a boom in manufacturing investment 

after the tax cut went into effect? 

Mr. STETTNER. Manufacturing has been on a rebound, I would 

say a consistent rebound for the last 6 or 7 years. And the challenge going forward is to increase those investments and for companies to look at the workers as partners. 

I think a great example that comes to mind is at the 

ArcelorMittal steel mill they have authorized a strike because the 

company is doing very well and workers are just asking for their 

fair share of those profits in terms of wages and healthcare benefits. And so, the move is going to have to be to make sure that 

workers are treated as partners, so we keep our skilled manufacturing workforce. 

Ms. SCHAKOWSKY. So, is there some way that the tax breaks 

could have been drafted in a way that would incentivize investment 

and what might that look like? 

Mr. STETTNER. I am not going to say that I am a tax expert. So, 

I don’t want to get into the details. I do think there are ways in 

which, in fact, the tax bill made it cheaper for companies to 

outsource jobs overseas, and we need to really close those gaps, so 

it is not cheaper to put production and corporate headquarters 

overseas. 

Ms. SCHAKOWSKY. Thank you. 

I just want to go back to Mr. Paradowski. Other countries have 

invested in long-term strategies for their manufacturers. China has 

been mentioned, the Made in China 2025 campaign. But Germany 

has what is called the Fraunhofer Society. And both of these countries have retained more production and more jobs than we have. 

The German plan is a public-private effort. 

And I am just wondering what you think the private sector could 

do, the manufacturing sector? Because everyone is talking about 

we can’t find the skilled workers. And if you want to comment on 

this, and there is time, Ms. Moyers, I would be happy to hear that. 

Mr. PARADOWSKI. I would love to comment. The way I look at 

education, and I have stated this many times within the State of 

Wisconsin, education is the supply chain, the commerce. I don’t 

know of anybody who goes to school to get an accreditation just to 

have it hang on their wall. They are doing it to ideally get a job. 

So, within the K–12 space in Wisconsin, I think there is a variety 

of things that need to happen. Awareness, nobody aspires to—— 

56 

Ms. SCHAKOWSKY. Yes, but I am not asking about what the State 

of Wisconsin can do. I am asking what the employers can do. 

Mr. PARADOWSKI. The employers can certainly provide the data 

as to what jobs are out there, what the makeup of commerce is. 

There are a lot of kids going through school to get accreditations 

where there is not a job, and there are a lot of jobs where we don’t 

have workers. Thus, we call that the ‘‘skills gap’’. 

I don’t refer to what we offer at Apache Stainless Equipment as 

jobs. I refer to them as careers. We want people to come in, and 

it is market-based wages. We will take unskilled people who we 

offer what we call the welding bootcamp. If you have never welded 

in your life, if you can come in and meet some basic requirements, 

passing a drug test, have some work ethic, we will teach you how 

to weld and we will pay you a market-based wage, which is far 

north of the minimum wage. We have a hard time finding people 

to do that. 

Ms. SCHAKOWSKY. OK. Do you mind if I continue for a while? 

Mr. LATTA. Go ahead. 

Ms. SCHAKOWSKY. Thank you. 

Before I go to Ms. Moyers, I wanted to ask Mr. Anderberg, you 

mentioned that large corporations could be doing more. What did 

you have in mind? 

Mr. ANDERBERG. Well, I think there is a lot of short-term thinking. And unfortunately for them, I think it is catching up to them; 

they are realizing it. 

I go back in the past. Thirty years ago, a lot of large corporations 

and large manufacturers shuttered their credential programs. They 

got rid of them. And now, a lot of those people are retiring that 

went through those programs and there is a big gap. And shame 

on them, I think. 

Today, for example, in Rockford, we are fortunate; we have the 

Rock Valley College, and we have an apprenticeship program 

through our local Tooling and Machining Association that I am on 

the board of. We have a very successful apprenticeship program. It 

wasn’t so some years back, but now we have over 120 apprentices 

for skilled machinists, tool and die trade in the program just in 

Rockford today. 

And we are the only ones training. The small manufacturers are 

really the only ones training. And I think at some point the larger 

manufacturers will have to train again. It might take some time. 

But I think if there is something that could be incentivized for 

them to start apprenticeship programs again—I don’t know if it is 

a tax credit. We talked about this. Actually, I talked about this last 

week, and we had a board meeting of our Tooling and Machining 

Association. Maybe a tax credit or something like that. 

I don’t think we need to have taxpayer dollars going to the benefit of companies, but maybe let them keep some of their capital 

in the form of a tax credit, or something like that, if they have an 

apprenticeship that is an accredited program. Our apprenticeship 

program, it is accredited by the Department of Labor. Everyone 

gets a Department of Labor certificate at the end of their training. 

And so, maybe something like that could be done, but I just think 

the only way you are going to get them off the porch now is to 

incentivize them some way or another. 

57 

Ms. SCHAKOWSKY. If I could? There is hardly anyone here today. 

So, I wonder if Ms. Moyers could just say a few words? 

Mr. LATTA. Yes. 

Ms. SCHAKOWSKY. Thank you. 

Ms. MOYERS. Thank you. 

To speak to your question to Mr. Paradowski, I think that what 

corporations can do is we need to make ourselves seen. One of the 

things that we are doing at our corporation is, with part of our 

charitable contributions, we donate to a place called Imagination 

Station in Toledo, Ohio, which is a science-based museum and activity center that is geared toward children. We have done several 

activities with them. We have donated for the past 5 years, and we 

have also been a part of their outreach programs. They do a great 

STEM for girls program, and we have done that. 

I was lucky enough to be a participant one year. And so many 

girls—and I think the ages were 8 to 13—so many girls came up 

and said, ‘‘I didn’t realize a girl could be a scientist. I didn’t know 

I could do this. I didn’t know that there were these jobs.’’ And that 

is one of the important things, is we need to just get ourselves out 

in front of people, so that they can see us and see what we do. 

Ms. SCHAKOWSKY. Thank you. 

I yield back. 

Mr. LATTA. The gentlelady’s time has expired. 

And just to follow up on Mr. Paradowski, what you said about 

welders, that is the No. 1 job out in my district, that if you have 

got that skill coming out of high school, you are hired immediately. 

The Chair now recognizes the gentleman, the vice chairman of 

the subcommittee, from Illinois, for 5 minutes. 

Mr. KINZINGER. Thank you, Mr. Chairman. 

Again, thank you all for being here today. 

Mr. Anderberg, should the government mandate wages that you 

pay? 

Mr. ANDERBERG. No. No. 

Mr. KINZINGER. Give me, if you can, like generally, what is kind 

of the average, if you kind of put all your employees together, what 

is kind of an average hourly wage? 

Mr. ANDERBERG. I would say the average hourly wage is up into 

the mid-twenties. 

Mr. KINZINGER. And has that, you said that is—— 

Mr. ANDERBERG. Not including benefits. Not including benefits. 

Mr. KINZINGER. And you said that has increased over the last 

few years? 

Mr. ANDERBERG. It is increasing, yes. 

Mr. KINZINGER. And that is because of? 

Mr. ANDERBERG. Scarcity. 

Mr. KINZINGER. What would have happened if, say, 3 years ago, 

Washington would have mandated the wage you are paying now 

back when the economy was hurting? 

Mr. ANDERBERG. Well, I will tell you, Congressman, as a small 

manufacturer, we made the decision in the 4-year slump we had 

between 2013 and 2017 to hold onto our people. We had built 

enough cash reserves up that we held onto them, gave them 40- 

hour weeks. And we made it; we ate up all our cash reserves in 

58 

those years. If we would have come out of that or had that come 

down, I would have laid off more people. It is just you can’t do that. 

Mr. KINZINGER. And can you think of—— 

Mr. ANDERBERG. Go ahead. Go ahead. 

Mr. KINZINGER. Oh, no, please. 

Mr. ANDERBERG. We talked about Germany. I have been in German machine tool plants. I have been in German manufacturing 

companies, and I don’t want any mandates from the government. 

One thing the Germans have done is they have mandated that, if 

you are a manufacturing company, you have to have 10 percent of 

your workforce in an apprenticeship program. That is pretty good, 

but I think that is incumbent upon the manufacturer to make that 

decision, not government. 

Mr. KINZINGER. Yes, and I think there are some things to learn 

from the German system. I like, in fact, they introduce kids in high 

school, put them on different tracks, career tracks, past opportunities, show them options. And I think that is something, frankly, we 

can learn from. Germany has actually been criticized significantly 

in the EU for what they call keeping wages low. And so, I think 

to kind of look at the German system and say that is the answer, 

I don’t think it is, even though, again, there are some things we 

can learn from them. They are very obviously technologically advanced and everything else. 

But I do think it is important that, since the enactment of the 

tax cut and the repealing of a lot of the regulations that you talked 

about that have been stifling, 1.7 million jobs have been created. 

Wages are up 2.7 percent. More than $4 billion has been paid to 

employees in terms of bonuses. 

Just 2 short years ago, three-quarters of manufacturers were 

saying that the biggest business challenges were our tax and regulatory environment. But, as of June this year, less than 20 percent 

say that that is a top concern. 

You look at it, and we should have these good arguments in D.C. 

That is the point of this place. But, if you look at it and you say, 

who are we asking, when you ask the people that are actually making the jobs, that are manufacturing, what is it you need and what 

is it you have seen, and they are telling us I think, by and large, 

that we are creating a better environment, and you look at the economic numbers, it becomes pretty obvious that it is working. Unemployment is at an 18-year low. It is not perfect. We still have 

a lot of work to do. We have a lot of issues with training. 

You said you employ about 60 people, 45 of whom are skilled 

tradesmen, machinists, and assemblers, but you have a need for 

another 10 or 15, and you can’t fill it. You also mentioned that this 

is a pervasive problem, not only in the manufacturing sector, but 

everywhere. Can you give us a couple of examples of other industries? And also, do you attribute the shortfalls to the same factors 

that have led to the shortfalls in manufacturing? 

Mr. ANDERBERG. Yes, I could talk about the construction industry. I know people who are building contractors, excavators; their 

people are retiring, too, in the next couple of years. I talked to one 

owner, Northern Illinois Service in Rockford. They can’t get anybody. He is really concerned about his business. 

59 

There are other service industries, everybody, everybody you talk 

to is having a problem getting people, specifically young people. 

And this is something I want to speak to. I touched on it a little 

bit in my writeup. This is a societal issue we are facing. We just 

can’t seem to get young people into the trades. 

And what I have also found, it is a global issue. Just recently, 

we had a serviceman over from Germany to work on one of our machines. We have gotten to know these people pretty well. And we 

had another gentleman in earlier this year. We get into this conversation, and they say—ythese guys fly all over the world. They 

are in plants in Russia, China, India, everywhere. And they have 

told me, both of them, that you go to a plant in China or India, 

they tell us the same thing; they can’t get young people into this 

trade, into this type of work. You walk into the plants; they are all 

older people. 

So, it is a unique situation. It is a unique challenge. I don’t know 

if it is because manufacturing is not seen as a technological industry. It is. And maybe it is more of a marketing effort toward, like 

I said, the students, the parents, the educators. 

If you were at the IMTS show last week, there was a display 

where they showed voice-activated commands for making machine 

tools move. It is fascinating. My father and I were there, and we 

happened to see a lot of students there that day, and they had 

lounge couches there; you could sit and watch. It was the only 

booth that I saw where students sat and were extremely attentive 

to watching the demonstration. Maybe that is part of the answer. 

Maybe it is increasing the technology, making it more work like an 

app on your iPhone or your iPad. I think that has something to do 

with it. 

But I don’t know. It is strange. I think everybody is experiencing 

the same thing. You can’t get young people in. They last maybe a 

day and they don’t come back. 

Mr. KINZINGER. Thank you. I have a thousand more questions, 

but I will just leave it by saying I think this is an area where, 

frankly, there can be a lot of bipartisan cooperation. We have these 

deep debates, but, ultimately, how can the government restructure 

our programs that exist, not new programs, but restructure them 

to make sure we are turning people onto these opportunities? 

So, thank you again for being here, all four of you. 

And I yield back. 

Mr. LATTA. Thank you very much. 

The Chair now recognizes the gentleman from Texas for 5 minutes. 

Mr. GREEN. Thank you, Mr. Chairman. Thank you and the ranking member for having this hearing. 

And I want to welcome our witnesses. 

Manufacturing—I come from the Houston area, the industrial 

part—my companies that are hiring are refiners, chemical plants, 

service industry, and the oil industry. What we have seen, and I 

have worked for a number of years because the way I got into college was I also was an apprentice at a newspaper. I learned to 

print a newspaper in the 1960s. And I asked the owner of the 

newspaper, I said, ‘‘You hired me as an apprentice. Why didn’t you 

go to the high school we had in the Houston area that had a printVerDate Nov 24 2008 11:23 Jun 10, 2019 Jkt 037690 PO 00000 Frm 00063 Fmt 6633 Sfmt 6633 U:\MY DOCS\HEARINGS 115\HEARINGS\115-167 CHRIS
60 

ing vocational program?‘‘ And he said, ‘‘Their technology is so far 

behind, we couldn’t do it.’’ 

So, over the last decades, we have taken vocational ed out of high 

schools. And our community colleges have been the one that should 

be taking it up. I have had a really good community college in my 

area where we have refineries, chemical plants, essentially, in a 

college who actually partners with the human resources of these, 

Shell, LyondellBasell, you name it, and say, what do we need to 

teach and get these students to have also a 2-year degree? But, 

then, they can walk onto your plant and work. 

That has been really successful, and I have been trying to get our 

other urban areas in Houston, community colleges, to talk with the 

people who hire the folks. And I have been to the locations and 

seen the training, and with these manufacturers who are doing 

that. Is that commonplace, that community colleges have taken 

over most of the vocational public? 

The apprenticeship I went through just was not a public one. It 

was a union, but I ended up being able to manage that newspaper 

after I got my apprenticeship because I had also gotten my undergraduate degree in business. I was just lucky to be able to have 

that kind of situation; whereas, so many of our young people coming out of high school, they may want to go to college because that 

is where everybody says they should, but they don’t know how they 

can afford to get there. And that is why an apprentice program in 

a community college, where you can earn a living and you can also 

still go back and get you a 4-year degree in whatever you want to 

do. 

Each of you stated you don’t have enough younger employees to 

replace older employees who plan to retire. I have heard that for 

a number of years. As you said, even nationally, internationally, it 

is a problem. 

How can individuals enter the manufacturing industry right now 

if they don’t have access to the educational programs like a community college or Manufacturing USA, or in my case just because the 

company wanted to hire me, and lightning strikes? What kind of 

program could do it? And I am real familiar with the German program. I have been to BMW and seen that. I don’t know if that 

structure would fit in our country, but I do know we need to have 

an apprentice program that is viable, so employers could count on 

the skills that they are learning there, that they can come on the 

job and work. 

Mr. Paradowski? 

Mr. PARADOWSKI. I would say that it is the awareness. There is 

certainly a stigma around manufacturing. I know when I was in 

high school in the early eighties, I went through a technical high 

school, market trade and technical high school, learned the trade. 

In school, we were all being told that, if you don’t have a 4-year 

degree, at some point soon you are not going to have a job. So, I 

think maybe kids have been brainwashed into thinking that they 

have to go to a 4-year institution. 

It is the awareness of what manufacturing is about. Our facilities 

have become very technology-driven. It is not dark, dirty, and dangerous like maybe some people believe. 

61 

Every single school teacher at the Beaver Dam High School in 

our community has been through our facility, and most of them 

have never been through a manufacturing facility prior to coming 

through. That is our role as the private sector, is we need to really 

drive the awareness that these careers; they are not just jobs. It 

is very technology-driven. It is the future. There will always be a 

sizable place in the economy for manufacturing. It is not going 

away in its entirety. Anybody who believes that is somewhat naive, 

I believe, and no disrespect to anybody who might believe that. 

But we certainly have a role to work as partners with education 

and K–12 and the tech college system, and any of the institutions 

out there that are educating our kids. Wisconsin Tech College System is one of the best tech college systems in the country. The average age of a tech college student in Wisconsin is 27 years of age, 

which would lead me to believe that they were out figuring out 

other things first before they realized maybe I want to go down the 

path of a tech school. I would rather that the average age be 18 

or 19. That means that the supply chain speeds to the workforce. 

Mr. GREEN. Any other response? I thought I had 4 seconds. 

Mr. STETTNER. I just wanted to, when we talked about existing 

programs, what it made me think of is community colleges don’t 

have an incentive to do technical training. A lot of the Federal student aid programs will not pay for that training, and the companies have to cover all the tuition. So, we have to kind of level that 

playing field. I think it is one kind of thing that we could do and 

I certainly support. 

Mr. GREEN. Thank you, Mr. Chairman. I know because my first 

two terms I was on Education and the Workforce, and that committee has prime jurisdiction. But I would sure like to see programs in our Department of Labor that would actually look for 

those skills training that they can go out and walk onto that job. 

So, thank you, Mr. Chairman. 

Mr. LATTA. Thank you very much. The gentleman’s time has expired. 

And the Chair now recognizes the gentleman from West Virginia 

for 5 minutes. 

Mr. MCKINLEY. Yes, thank you, Mr. Chairman. 

And you on the panel, you saw an opportunity or you saw earlier 

today in this hearing why Congress is considered to be so dysfunctional when you saw the attacks that went underway over the tax 

cut. When we are talking about manufacturing, people want to go 

back on the other side and talk about the tax cuts and that they 

haven’t been productive. And the fact that one person referenced 

the fact that they were all used for buybacks, and I am sure there 

were some. I am sure there were some. But just keep in mind that, 

according to Fortune magazine, of the Fortune 500, the top S&P 

500, they only represent 17—and I shouldn’t say ‘‘only’’—but they 

represent just 17 percent of the workforce, the publicly-traded companies. 

So, we are dealing with 117 million jobs that are in these small 

and medium-sized companies. They are not doing buybacks. It is 

just a distraction of what this fight is about. 

Because we have seen in West Virginia, as a result of the tax 

cut, what it has done is strengthened our manufacturing. We have 

62 

had manufacturers that make truck parts, truck bodies, are now 

going to triple the size of their operation in West Virginia. Toyota 

that makes engine blocks is going to put $120 million more into it, 

thanks to the tax cuts, down in Buffalo, West Virginia. ATK was 

bought by Northrop Grumman, and they are going to expand their 

operation in manufacturing in West Virginia. Boeing just bought 

Aurora Space Flight, making aerospace parts, as a result of the tax 

cuts. 

So, I am seeing some positive. It is larger companies, but also I 

just had an opportunity this last weekend to talk with a small 

manufacturing company, Panhandle, with Bob Contraguerro, out of 

Wheeling. He didn’t use it for buybacks or increased dividends. He 

hired more people. He has expanded his operation. He is buying 

more trucks. He is doing all the things he can, but he is facing the 

same problem that you all have talked about; he can’t find qualified people for that. 

So, my question has to do with the workforce. I think across the 

country we have gone away from vocational education. We are not 

making the incentives anymore for apprenticeship programs in our 

trades. 

I am chairman of the Building Trades Caucus, and we know desperately we need plumbers, pipefitters, carpenters, and electricians 

to be able to that. We have got to be able to get that base back 

again. 

So, I am curious to see, from your incentives or what you are seeing, how would you suggest that we renew our interest in vocational training and apprenticeship programs? What can we do from 

Congress to make sure that we have a workforce? What would you 

suggest, please? Any of you? 

Mr. ANDERBERG. I think, for example, in Rockford, I think every 

district or every area that has manufacturing recognizes that shutting down the vo-tech schools was a big mistake. In Rockford alone, 

we have had one high school, Jefferson High School, start up their 

vo-tech training programs; it has been over 5 years ago now. And 

it has been very successful. There is another high school in Rockford that is starting their vo-tech program again. Across the border 

in Beloit, Wisconsin, in fact—— 

Mr. MCKINLEY. We have to overcome a stigma. 

Mr. ANDERBERG. Right. 

Mr. MCKINLEY. Someplace back in the seventies or eighties, 

there was a stigma about, well, they are in a shop; they are 

autobodies. How do we get that back and remove that stigma with 

that? 

Mr. ANDERBERG. I think we have to show that, if you are going— 

I went to college and I have a master’s degree—but I think you 

have to show, if you go to a 4-year school and you come out with 

a bachelor’s degree, you are in debt, and that the wages you are 

going to make aren’t as much as somebody that comes out of high 

school with math and an aptitude and goes to work in a manufacturing operation, the amount of money they are going to make. 

The wages that we have in our manufacturing companies today 

just in Rockford are tremendous. And then, because of the scarcity, 

they have risen, and it is an attractive wage and it is more than 

63 

a living wage. The people that work in manufacturing make more 

than the majority of the middle-class, working individuals. 

I can’t put it all on manufacturing. You can point fingers at everybody. We have to do a better job of marketing and educating the 

public of what manufacturing is today. I don’t know how; maybe 

that is something Congress can step in and do. 

Mr. MCKINLEY. I am sensitive to it because my first job was in 

manufacturing. I was on an assembly line in an ice plant, in a 

neighborhood ice plant. So, I understand that we worked seven 

days a week. 

But, nevertheless, I appreciate your effort with it. I am sorry 

that some people got distracted in trying to make this an issue over 

the tax cut program. But, you see, there is a reason they are doing 

that, and I am sorry. 

And I yield back. 

Mr. LATTA. Thank you very much. The gentleman yields back. 

And the Chair now recognizes the gentleman from Kentucky for 

5 minutes. 

Mr. GUTHRIE. Thank you very much. It is nice to be here. Sorry, 

there are a couple of other hearings going on, so I have been in and 

out. I apologize. 

But this first question is for Mr. Anderberg and Ms. Moyers. As 

nearly everyone has mentioned this morning, the workforce challenges you are facing are significant. This issue is important to all 

of us and our districts. 

Mr. Anderberg, one issue, in particular, you mentioned was the 

need for increasing apprenticeship opportunities. And some may 

not be focused on that. I recently started the Congressional Apprenticeship Caucus with my colleague, Susan Davis of California, 

and we introduced legislation to expand awareness of apprenticeship opportunities by providing funds for the states and the Department of Labor to get the word out about opportunities. 

There are a lot of challenges, but could you tell us what are some 

of the biggest challenges that are specific to your apprenticeships 

or earn-and-learn opportunities? 

Mr. ANDERBERG. I think for us, and what we have experienced, 

what I know my fellow colleagues back in Rockford have experienced, it is simply finding a young individual that wants to come 

to work every day, wants to do the work. And in our instance, 

when we have someone come to the door that is interested in a 

manufacturing job, what we do is we put them into our apprenticeship program. And if they exhibit good attendance, an aptitude, 

they are a good worker, if we ask them, ‘‘Do you want to become 

a machinist? Do you want to make a career here?’’ If they say yes, 

we pay for their apprenticeship 100 percent. We pay for all their 

books, all their costs. 

And even if they are on a night shift, for instance, while they are 

at school, because there is some night school and night classes, we 

pay their wage while they are at school. I don’t want to penalize 

them. So, we bend over backwards to get somebody into our apprenticeship program. The problem is finding individuals to come 

in that want to do it. That is the biggest problem. 

Mr. GUTHRIE. Ms. Moyers, do you have any followup? 

64 

Ms. MOYERS. Yes. We actually at Jerl also offer an apprenticeship through the State of Ohio. We have not completed an apprentice since 2014. We have had a lot of people enrolled. We have put 

people through programs. And like Mr. Anderberg has said, the 

young people are either not focused enough to want to continue it— 

it is a 4-year program with us. And after a year, they drop off, they 

start missing classes, failing classes. 

The other issue, I think, that is hindering people from offering 

apprenticeship programs is no one wants to train an employee that 

another company is going to poach. So, because the workforce, we 

have this skilled wage gap, it is really hard to commit to putting 

the investment into those employees if you are fearful they are 

going to jump ship and go somewhere else, because, then, you have 

no return on your investment. 

Mr. GUTHRIE. Right. 

Ms. MOYERS. I don’t know what the solution is to that, unfortunately. 

Mr. GUTHRIE. Well, thanks. And, we are looking at other things 

and other bills and other issues about getting people into the workforce, and so forth. My argument is that these people are wanted, 

they are needed, and what you just said, wanted. In particular the 

farm bill we are debating that. And I really believe this. If somebody is on some kind of benefit and they don’t get back into the 

workforce, then 5 years from now they are going to be in the exact 

same spot. 

But what you just described is what my experience is. I am from 

a manufacturing background. If somebody will come to work and 

show up every day and do their job, they are going to move up and 

improve. And I will tell you the difference. If somebody doesn’t get 

back into the workforce, they are going to be in the exact same 

shape 5 years from now. If they just show up for work with even 

low skills or no skills, they are going to be where you are talking 

about 5 years from now through an apprenticeship or some kind of 

program, and be better off. 

But I want to get to one other thing. I am changing the subject. 

So, Mr. Anderberg, this is for you. My colleague Doris Matsui and 

I are looking to drop a bill to direct the Department of Commerce 

to establish a working group of Federal and private stakeholders 

to define blockchain. That is one thing, until we can even deal with 

policy, get the definition of blockchain and study some of the implications for spectrum policy in potential applications. We have a lot 

to learn and hope this is a good first step in kicking off significant 

conversations across the Federal Government. 

Do you believe innovations in blockchain could be important to 

your company and the manufacturing sector generally? 

Mr. ANDERBERG. Yes. I think anytime Washington wants to talk 

about manufacturing, it is a benefit. I remember coming out here 

in the late ’90s when it was discussed talking about PNTR and 

some of the trade agreements. And I came out in small manufacturing groups. They didn’t want to hear us. They didn’t want to 

hear what we had to say of what was going to happen. And I think 

the reality has become reality. 

Anytime Washington has talked about manufacturing, I think 

that is important. And we have talked here on the panel before we 

65 

started. You know, the is the Digital Commerce and Consumer Protection Subcommittee. Yet, we have a USDA. I am not opining for 

another bureaucracy. But how important manufacturing is to our 

national defense, our economy. Shouldn’t there be some type of 

subcommittee or committee on manufacturing to keep watch on 

some of these things? Maybe that is something. But I fully appreciate anytime Washington wants to discuss, to talk about manufacturing, because it is extremely important to our country. 

Mr. GUTHRIE. Thank you. I appreciate that. 

My time is expired and I yield back. 

Mr. LATTA. Thank you very much. The gentleman’s time has expired and he yields back. 

And the Chair now recognizes the gentleman from California for 

5 minutes. 

Mr. CA ́ RDENAS. Thank you very much. 

I appreciate the opportunity to talk to some of the practitioners 

out there in the real world. So, thank you very much for being 

here. 

Ms. Moyers, thank you for pointing out in your opening statement about the lack of diversity, even in your own company. And 

it is good to hear that it sounds like you would love to welcome 

more diversity. 

Is diversity good for business, for your business, for your bottom 

line? 

Ms. MOYERS. Absolutely. It is good for every business. I can’t tell 

you how many times just myself, as a family member, completely 

accepted in my business, walking in and I can present an idea that 

I can tell no one at the table has thought of before. And I don’t 

know if it is because I am a woman. I don’t know if it is because 

I didn’t stay in my industry; I didn’t start there. I have previous 

experience in other industries. 

But any time you get someone who is different, they offer a 

unique perspective. If they have grown up in a different place, if 

they have experienced different prejudices, experienced different 

benefits from their race, their religion, their sexual orientation, 

their gender, it is important because we cannot continue—we have 

talked about manufacturing as needing to be innovative and needing to progress, and we can’t progress if we have the same people 

making the decisions and deciding to—excuse me; I lost my train 

of thought—making the same decisions. 

Mr. CA ́ RDENAS. Well, Ms. Moyers, you just mentioned something 

very interesting. That is, you mentioned a whole breadth of different communities. Your product, is it consumed—or who participates in that product? Is it across the board or it is only one kind 

of community? 

Ms. MOYERS. No, we have a—— 

Mr. CA ́ RDENAS. The ones that you just described? 

Ms. MOYERS. Our business is metalworking. Basically, we are not 

an end product. We provide for other companies that produce other 

things. 

Mr. CA ́ RDENAS. So, all communities that you just described benefit from your product in some way or another? 

66 

Ms. MOYERS. Absolutely. Absolutely. We work in multiple industries, food packaging, automotive, elevator, energy. It is nationwide. 

Mr. CA ́ RDENAS. There is another form of diversity—— 

Ms. MOYERS. Right. 

Mr. CA ́ RDENAS [continuing]. Diversity of consumers, right? 

Ms. MOYERS. Yes. 

Mr. CA ́ RDENAS. OK. In some of the testimony, some of you were 

talking about how young folks, it is hard to attract them and get 

them involved in manufacturing, or what have you. My office, my 

district office, we participate in manufacturing day. We really make 

it a manufacturing week. 

And one of the things that I came up with, and we are still trying to tackle this issue—I happen to represent part of Los Angeles. 

So, it is not uncommon to see an A-list star walking down the 

street or somewhere in town, and you are like, whoa, that is soand-so. On that point, I think it is important for everybody, whether it is you, the practitioners, us as policymakers, or what have 

you, we have got to try to get really cool spokespeople to encourage 

that manufacturing is cool. 

Another thing as well that I think is important, I think that, on 

balance, manufacturing actually pays more on quasi-entry-level 

skill set jobs than does other quasi-entry-level, not-so-much-skill 

required jobs, like, say, working at a fast food restaurant, or what 

have you, where many of our young people end up, if they are determined to actually work, and say, well, that is the only thing I 

have got. So, I have got to put on this funny, little hat and I have 

got to punch that cash register. 

I think it is really important that your industry pay attention to 

that. I think that you have a higher likelihood of attracting a 

young person who already went out in the workforce and got tired 

of working for minimum wage and tired working for a job that requires almost no skills other than showing up for work. I think 

that you have a higher likelihood that they will actually be more 

attracted to trying to apply themselves for one of your businesses 

and in manufacturing in general. That is my take. 

Since I was 13, I had one, two, three jobs at a time, or what have 

you. That was my immigrant parent inculcation into my life. So, 

I think I was a little lucky. So, by the time I got out of high school, 

I was like it is just natural; I have one, two, or three jobs at any 

given time. Today’s younger folk, they don’t seem to have that kind 

of want for that kind of effort. 

So, I am just saying that I think that it is important, especially 

for you practitioners, to just pay attention to what is going on out 

there in the community. And instead of, unfortunately, seeing them 

be not attracted for you, maybe after they have already been in the 

workforce and realize that you do have a better paying, better opportunity, career type of opportunity for them, then maybe you will 

have a little bit more stick to it from some of these younger folk. 

I am looking at the clock; I am running out of time—but one 

thing I definitely want to ask Mr. Stettner is, how can manufacturers better attract and retain their next generations of diverse employees and leaders? 

67 

Mr. STETTNER. One thing I would say in interviewing workforce 

practitioners who place people in manufacturing, many of the programs only focus on getting the person the first day of the job. 

They need more resources to help with concrete things like child 

care and transportation, but also just mentoring and coaching, especially if you have a first Latino kid or the first Black kid going 

into an all-white workforce. 

And it is also an educational piece on the manufacturers to learn 

how are we going to make that person comfortable, how are things 

people are saying on the floor making that person uncomfortable, 

how do we change our culture to be more welcoming to women and 

people of color? And what I have seen is manufacturers are listening and they are working, and look at those programs as a way to 

learn how to do that a little bit better. 

Mr. CA ́ RDENAS. Thank you. I yield back. 

Mr. LATTA. Thank you very much. The gentleman’s time has expired. 

And the Chair now recognizes the gentleman from Pennsylvania 

for 5 minutes. 

Mr. COSTELLO. Thank you, Mr. Chair. 

I would like to point to an example in my home district, in Berks 

County, in fact, that highlights the success resulting from many of 

the pro-growth policies such as the tax cuts and JOBS Act. Carpenter Technologies, founded in Redding in 1889, employing 2,000 

people at its Berks County facility, produces special alloy-based 

materials for aerospace, energy, transportation, defense, and consumer electronics markets. Carpenter Technologies recently announced a $100 million investment in its mill in Redding because 

of the tax savings they recently have found themselves having as 

a result of the tax bill. 

Capital investment is a strong signal of entrepreneurs’ confidence about the future. We need to focus on marrying those freemarket policies with workforce development, training to help minimize the skills gap through apprenticeships, on-the-job training for 

job seekers, and emphasizing curriculum in schools that can be 

translated to the 21st century economy. 

Can all of you talk about some of the training options your potential employees need to be certified and if there are any barriers for 

them to receive the proper training? The second question, how can 

the Federal Government be a better partner in fostering more 

workforce development opportunities to get folks off the sidelines 

and into good-paying jobs in the manufacturing sector? 

Ms. MOYERS. I think that, with my company specifically, we are 

offering quite a bit. We offer tuition assistance for anyone that is 

continuing education. Our apprenticeship is fully paid. And basically, if you are willing to come to work and work hard, we will invest in you and we will make sure that you move up. Just like it 

has already been said, if you can find someone who is unskilled 

who will show up to work every day, we are going to train you and 

we are going to move you up in our fields. 

I am sorry, what was the second part? 

Mr. COSTELLO. Federal Government partnering. 

Ms. MOYERS. Yes. 

Mr. COSTELLO. How do they? How might they do it better? 

68 

Ms. MOYERS. I think we have already covered it a little bit. 

Mr. COSTELLO. I think so, but—— 

Ms. MOYERS. I think education funding into vocational schools 

and trade skills and life skills is vital. I think that is the way that 

the government can help us. 

Mr. COSTELLO. That second part, maybe add where you may be 

working with your local or regional workforce development organization and how the Federal Government’s role is or is not involved 

in that, for the next folks. And we can go back to it in a second. 

Mr. PARADOWSKI. I think the role of government, the K–12 space, 

we put too much incentive on SAT scores and truancy. I have got 

four daughters, three in college, one in high school. The mindset is, 

if you do well on the ACT, there is the center lane that, if you are 

in it, you are a winner and everything else is kind of a fallback. 

So, if you find yourself in a skilled trade, it is because you couldn’t 

make it on the main lane. I think that is a challenge where it creates the stigma. 

I think the things that will help is the awareness of what is out 

there. I said it earlier; nobody aspires to be that which they don’t 

know exists. So, data in the K–12 space, here are the opportunities 

that lay out there in the workforce. And they are all equal valued. 

So that kids aren’t conditioned to think I have got to go to a 4-year 

school and take on that debt, just to find out that what I got 

trained in isn’t something that either (a) has any market demand 

or (b) is anything I enjoy doing. 

Getting people off the sidelines is a tricky thing. I have some 

data. It is a little bit dated. In the State of Wisconsin—this was 

late last year actually—are unemployment rate at the time was a 

little bit over 3 percent, which equated to 109,000 people. Right 

now, the unemployment rate is below 3 percent. At that same point 

in time—and as everybody would know, unemployment is those out 

of work looking for work—at that same point in time, there was 1.4 

million people in the state of Wisconsin that were out of work not 

looking for work. Some of those, in all fairness, might be people 

who don’t need to work. But I think it would be naive for us to 

think that that is all of them. 

There are a lot of people who are able-bodied that could be additive to the workforce that aren’t. Some of that might be a fact that 

the K–12 system. Current gradation rate of Milwaukee public 

schools is about 60 percent. So, four out of ten kids, where are they 

going? I am a graduate of Milwaukee public schools. 

So, those things concern me deeply because, if they are not going 

into the workforce, how do we get them into the workforce? Maybe 

if there are more pathways equal valued, that a 4-year degree is 

great; trade is great; military is great. They are all equally great. 

Maybe less people opt out at an early age. There is, obviously, a 

lot of other complicated parts with opioid addictions and things of 

that nature. But that is our opportunity to me, the people that are 

on the sidelines. We have got to find a way to keep them in the 

game, keep them on a pathway to be added up to the economy. 

Mr. STETTNER. There is obviously formula funding for career 

technical programs, but they kind of fund the same programs year 

after year. In the same way some of the programs like the 

TAACCCT grants incentivize some really innovative activities that 

69 

led to the current boom in apprenticeship, I think we need a focused program that would spur school districts to do something innovative about the trades, not a big program, but something, a 

competitive grant program that really got the juices going and kind 

of show the Nation we can do more. 

Mr. ANDERBERG. As far as barriers to training, again, I think it 

has to do with an educational effort of the educators, the parents, 

the students, and, obviously, opening the vo-tech schools, which we 

are seeing in Rockford. In one instance, I have talked to the program administrator in Rockford, and they are looking at, for juniors and seniors that are going through the program. This used to 

happen years ago, where you have a half-day at a workplace and 

half-day in class. And so, then, when they are ready to graduate 

from high school, they are in. And then, from there on, there could 

be training. 

As far as what can the Federal Government do, I guess maybe 

helping create awareness. I don’t want to repeat what they said, 

but it is just helping the community colleges. If there are vo-tech 

programs—I will step back. Years ago, I was told that part of the 

problem with Congress is, of the 435 districts, only 35 districts 

have manufacturing in them of any significance. I think that has 

been an issue over the years. That is why things have fallen 

through. 

So, the recognition here today, having us here today and talking 

about this is a start, but I think there has to be more awareness. 

If funding for some of the tech schools or for some of the community colleges, like we have in Rockford, could help, that would be 

terrific. 

Mr. COSTELLO. Thank you all very much. I yield back. 

Mr. LATTA. Thank you very much. The gentleman’s time has expired. 

And the Chair recognizes the gentleman from Florida for 5 minutes. 

Mr. BILIRAKIS. Thank you, Mr. Chairman. I appreciate it. 

For Mr. Anderberg, Mr. Paradowski, and Ms. Moyers, I heard 

from my local manufacturers, the stakeholders in Tampa and the 

Tampa Bay area, that workforce development is one of the biggest 

problems in this sector. I know many of my colleagues have already 

highlighted this. And we have the vocational training, the schools 

there. We have career academies, which I worked on in the legislature. So, in other words, if there’s an area of need in the community, we focus on that particular area of need through the career 

academies and the high schools. And, of course, we have 

AMSKILLS. We have P–TECH, and we have Marchman, and all 

the community colleges. They do an outstanding job, but we need 

more. This is everywhere I go I hear this. 

But can you tell me about some of the other impediments, because we did cover this, to growth in the manufacturing sector? So, 

this is for Mr. Anderberg; you can go first, please. 

Mr. ANDERBERG. You said impediments to growth in the manufacturing sector? 

Mr. BILIRAKIS. Yes, yes. Well, besides the workforce. 

Mr. ANDERBERG. Well, that is our biggest impediment at the moment. 

70 

Mr. BILIRAKIS. Yes. 

Mr. ANDERBERG. But I think right now it is tough to say there 

are impediments because of what is taking place the last year and 

a half, quite frankly, the change in tax policy, the change in regulatory, the trade situation. We are going full blast right now, and 

I don’t see where there is an impediment for manufacturing now 

solely, except for the lack of people. 

Mr. BILIRAKIS. Good. So, you recommend we focus on the workforce issue? 

Mr. ANDERBERG. I think the workforce is probably the most important thing that Congress could work on to help us. Again, allowing us to keep our capital, the money we earn—I don’t wake up in 

the morning and think how I am going to spend my money on a 

boat or something else. I think about how I am going to improve 

my operation, what I am going to do to help my people, grow my 

business. That is what we do with our money. 

And I just want to thank you, thank Congress and this administration for allowing that to happen. Everyone is investing again. It 

is incredible. 

Mr. BILIRAKIS. Very good. 

Mr. Paradowski, any more besides the workforce issue? Any 

other impediments? 

Mr. PARADOWSKI. Absolutely. I often give my four legs of the 

stool that drive private sector growth speech. So, maybe I will inject it right now. Logistics, energy, workforce, although I wasn’t 

supposed to say that word, and commerce-friendly government. So, 

it is really the economic, how friendly an environment as far as the 

government. 

So, I will use a real-life, real-time example, Foxconn making its 

investment in the southeastern part of Wisconsin. Their focal 

points were those three things: logistics, being in proximity to Milwaukee and Chicago, two international airports; energy; workforce 

is certainly a thing, but the economic environment that the government created in the State of Wisconsin specifically for them to 

come there and compete. 

Really, the argument, or maybe the fundamental difference in a 

lot of the folks in this room is, the sun rises in the East and free 

markets do what they do. If you can’t compete—I will cite something that Mr. Stettner said—highest tech, not the lowest cost. 

Maybe there are some markets where you can be that, but I know 

that if I wanted to go into the 4K LED TV market, if I can’t find 

a way to make one for $350 for a 50-inch, I don’t have a product. 

Markets do what markets do. 

And as a global economy and the U.S. role in that, we have to 

compete on a cost and performance basis or else we go out of business. Companies go out of business every day. And those are the 

four key things. 

The impact of tax reform is a real impact. Look at GDP growth. 

Anybody who says that tax reform didn’t have an impact is denying 

a key factor of GDP growth. 

But one of the things that is a parachute on the car right now 

is certainly workforce, but you asked me not to talk about that. The 

regulatory environment, government needs to be an allied partner. 

If government is really focused on helping the private sector, 

71 

changing the educational system in K–12, so that many pathways 

are equally valued, that will go a long way. I don’t want to go down 

this rabbit hole, but legalized immigration I think is a big piece. 

Half of our workforce is in the last trimester of their career, between 50 and 65. And we need to add bodies. GDP is a function 

of output and efficiency, GDP growth, and we need to add workforce. We need to add efficiency. 

Mr. BILIRAKIS. Very good. 

Ms. Moyers? 

Ms. MOYERS. I think I am going to sound like a broken record, 

but I think that the bottom line is just that the workforce is our 

biggest issue. Of course, personally, in our company we have had 

cash flow issues in the past. We are not having them right now because of the current climate, because of the tax reform, because of 

deregulation. And I think more of that is going to be helpful. 

I guess the only thing that I can think of is making it cheaper 

for businesses to run and do the things they do, so anything that 

is cost saving to us. One of the biggest expenses we have had in 

the past few years has been healthcare costs. We cover healthcare 

for our employees. They pay a very small percentage, and we don’t 

want to make them pay more. And we have no intention of taking 

it away, no matter what it costs us, because we feel it is very 

value-added to our employees and it is part of the reason they stay 

with us. So, that is one of the things, that that rising cost is a big 

burden for small business owners. 

Mr. BILIRAKIS. All right. Thank you. 

I have a couple more questions, but I will yield back. But thank 

you very much for that information. Thank you. 

Mr. LATTA. Thank you very much. The gentleman yields back. 

And looking down the dias here, there are no other members 

wishing to ask questions. 

First of all, I want to thank all of the witnesses for being with 

us today, for giving your testimony, taking your time away from 

your businesses to be with us. And it is great to know that it is 

not just an issue in northwest Ohio or Ohio; that the No. 1 issue 

out there is employees. And all the work that you all are trying to 

do, from benefits to making sure that you are investing in people 

out there for 2 to 3 months to get them out there. So, I really appreciate you all being here. 

Before we do conclude, I want to make sure that the following 

documents are submitted for the record by unanimous consent: the 

report by Mr. Stettner; also, the earlier document that the 

gentlelady from Illinois submitted that was accepted. 

[The information appears at the conclusion of the hearing.] 

Mr. LATTA. And pursuant to committee rules, I remind members 

that they have 10 business days to submit additional questions for 

the record. And I ask that witnesses submit those responses within 

10 business days from the receipt of the questions. 

And so, without objection—— 

Ms. SCHAKOWSKY. Mr. Chairman, if I could say just something? 

Mr. LATTA. Oh, the gentlelady. 

Ms. SCHAKOWSKY. So, Mr. Stettner, in your written statement 

you talked about apprenticeship and vocational training and how 

that has dwindled a bit. But you also said—and I think this came 

72 

up—that there is a generation who experienced industrial decline, 

who are telling their children to shun factory work. And I agree 

that, in part, it is a marketing approach to young people. 

Mr. Paradowski, you talked about careers, that these really are 

careers. And I also think that we need to encourage women to understand that this is a great opportunity for women to participate 

and get more money; that more diversity in every way is important. And so, I think that we need to help with the marketing. 

And maybe, Mr. Stettner, this is part of a manufacturing strategy, that the Federal Government, along with the private sector, 

can participate in, to make sure. I think some people of a generation ago think about dirty factory floors and kind of nasty work, 

and we have to help change that image, so people see this as a lifelong career choice. 

So, I just wanted to add that. 

Mr. LATTA. And again, as we have been hearing from all the 

members here on the committee and from our witnesses, manufacturing has changed out there. And I know that I was in a plant 

not too long ago and asked a gentleman running a CNC machine 

how long it took him to learn it. He said, ‘‘I’m still learning it.’’ He 

had been there a year. A lot of folks don’t realize how much computerization is in plants today, and it is. It is looking at everything 

from guidance counselors to principals—— 

Ms. SCHAKOWSKY. Right. 

Mr. LATTA [coninuing]. To making sure that economic development directors, going right down the entire line, right down to the 

student, getting them out there to see what is there and making 

that investment. 

So, again, we really appreciate you all being here today because 

this is really important to this economy. It is vital to this nation. 

So, we appreciate you being here today, and thank you for your testimony. 

And with that, this subcommittee will stand adjourned. 

[Whereupon, at 11:45 a.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

73 


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S I~conOinic Polk')' Institute 

Working Economics Blog 

Posted August 3, 2018 at 1:23pm by Josh Bivens 

How do we know the tax cut isn't working to 

boost wages? Investment, investment, 

investment 

Earlier this week, my colleague Hunter Blair noted that economic data released over the past 

six months contained no real signs that any of the promised benefits of the Republican tax cut 

passed at the end of last year were showing up for workers. These benefits are certainly 

showing up for corporations and the wealthy households that own them-which makes sense, as 

the tax cut was overwhehuingly a tax cut for corporations. But the tax cut's boosters promised 

that money corporations saved on taxes would quickly show up as higher wages for workers. In 

fact, they clainled this was happening so quickly that the tax cut was responsible for bonuses at 

the end of 2017 that were granted or announced before the tax cut actuaUy became law. 

As silly as those arguments were, a case that corporate tax cuts will lead to wage increases does 

exist in economics textbooks. The most crucial link in the chain leading from cutting 

corporations' taxes to workers seeing higher paychecks runs through increased business 

investment in plants, equipment, and research. Essentially, lower corporate taxes are supposed 

to incentivize businesses to undertake more investment in productivity-enhancing plants, 

equipment, and research, and induce extra spending to finance these increased investments. 

This extra investment is supposed to lead to higher productivity, and hence to higher wages for 

workers. I should note that most of the links in this chain are broken, but for now, let's just 

focus on the first-the effect of the tax cut in spurring business investment. If that falls, the 

whole case for tax cuts boosting wages falls. 

The figure below shows the percent change in business investment relative to the same quarter 

in the previous year, with the vertical line showing when the tax cut was passed. The data is 

from the Bureau of Economic Analysis (BEA), National Income and Product Accounts (NIPA) 

Table 1.1.3. It is awfully hard to see a real reginle change here in investment behavior. 
74 


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Percentage change in nonresidential fixed investment, same quarter last year 

-20 < 

-4_0 

Occasionally, tax cut defenders will urge some patience, arguing that it takes some time for new 

investment to be order and installed. This is fair enough (but what about those bonuses paid 

before the tax cut became law and yet claimed as its vindication?), but orders of new capital 

goods (i.e., investment plans) can be made as soon as the law takes effect. I flocking in lower tax 

rates is supposed to make firms want to invest more, six months should be enough time to see 

this in data tracking capital goods orders. The figure below shows capital goods orders for the 

first six months of each year since 1992. The data is from the Census Bureau's Manufacturing, 

Shipments, Inventories and Orders data. The 2018 bar (the last one on the right, circled) is 

entirely in the period of time when the effect of the tax cuts took hold. This certainly does not 

make the tax cut look like an investment game-changer. 
75 


36617.038

40%' 

20% ~ 

Change in new orders for non-defense capital goods, 

Jan-June of past year to Jan-June of current year 

::~J1l1Ll ~1ll~ _tl_,.~@ I -20% ·1 

~30% i 

' -40% ~ 

i 

-50% J ' 

Finally, it is true that both of these graphs show pronounced investment weakness starting in 

2014 and rum1ing through 2016. Investment clearly began improving in early 2016. None of 

this lines up well with the tax cut's effect, but it's worth looking at why investment was doing ok 

in the early part of the recovery from the Great Recession but then faltered. The answer seems 

clearly to be that American business investment has become largely driven by investment in 

energy extraction, and since 2007 it has risen and fallen in response to rises and falls in energy 

prices. The next figure shows the year-over-year change in business investment since 2011 

lined up with the year-over-year change in energy prices, but lagged one year. The investment 

data is the same as in the first figure, and energy prices are from the BEA NIPA table 2.3.4 

(gasoline and energy price deflator). The fit is very tight, with a correlation of 0.73. 
76 


36617.039

50% 

-

30% 

10% 

f 10% 

ii 

il! 

z 0% 

-10% 

~20% 

-30% 

-40% 

Change in nonresidential fixed investment and (ly lagged) energy prices, 

relative to same quarter last year 

14% 

"" 

'"" 

8% 

5% 

4% 

1% 

0% 

-1% 

This correlation is a very new development. Here's a scatterplot of these same series for the 

period from 1979-2007. There is essentially no relationship. 

~ 

-5 

{ 

!! 

.5 
77 


36617.040

Change in NRFI and (lagged) energy prices relative to same quarter last year; 

1979-2007 0.8 

0.6 

• • • + 0.4 + 

+ • • 

.0.1 

+ • 

Energy price clla.nge 

0.25 

Where does this analysis of investment trends leave us? First, the tax cut shows no sign of 

boosting investment, and, this is a necessary (not sufficient, but necessary) condition for it to 

boost wages. In the end, we all know that this is just one more tax cut for corporations and the 

rich that will not trickle down at all to American workers. Second, non-energy investment in the 

United States is extremely sluggish, and we should work hard to boost it. The most direct way 

to boost it is by undertaking public investment (infrastructure would be a good start). We 

should also try to make sure labor markets are as tight as possible, to goad employers who have 

become complacent about economizing on labor costs because workers have been so cheap in 

recent years. Faster wage growth could well kickstart some business investment. 
78 


36617.041

A Federal Agenda for Revitalizing America's Manufacturing Communities 

Andrew Stettner and Joel. S. Yudken 

Dek: The U.S. has underinvested in its manufacturing base. Here's a $2 billion plan to 

accelerate the development of good paying manufacturing jobs for communities that 

need them. 

WYSK: 

• This report is in partnership with The Great Cities Institute and The Century 

Foundation's Bernard L. Schwartz Rediscovering Government Initiative. This work 

was supported by a grant from The Joyce Foundation. 

• The High Wage America project researched and toured Pittsburgh, Cleveland and 

Chicago, and developed a $2 billion, 12 point action plan to revitalize good paying 

manufacturing jobs and Industrial heartland communities. 

• Manufacturers are hiring again (in Chicago there were two openings in 

manufacturing for every person hired) but are struggling to fill positions with 

candidates from diverse backgrounds. 

• Rejecting the "Rust Belt" label, leaders from the industrial heartland are looking 

for federal investments in high-tech, highly innovative manufacturing. 

The United States has now entered a record-long period of job growth, driving the 

unemployment rate to its lowest level in nearly two decades. Yet for millions of workers 

across the country, the U.S. economy continues to fail to provide enough high-wage, 

family-sustaining jobs. While this problem has been decades in the making, it has 

become increasingly acute. Over the past year, for example, real wages of workers 

actually declined, while pay for corporate executives has soared. 

There is perhaps no region where the impact of stagnant wages is felt more strongly 

than in the industrial heartland. The region is still recovering from years of 

deindustrialization and disinvestment that has led to limited job opportunities and put 

downward pressure on wages. From 2000 to 2010, the states of Indiana, Illinois, 

Michigan, Ohio, Pennsylvania, and Wisconsin lost a combined 1.8 million manufacturing 

~· In the twentieth century, these jobs-and the union pay and benefits they often 

brought-drew millions of Americans to the Midwest and helped build the country's 

middle class. Conversely, the industrial decline of the twenty-first century has dealt a 

blow to the vitality of the entire region, leading to population loss and hurting 

communities that relied on manufacturing both directly and indirectly. 
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Neither the phenomenon of low wages, nor America's manufacturing struggles, is the 

sole result of economic forces of nature. Rather, they are the result of conscious policy 

choices made by our elected leaders. Trade policy accelerated the offshoring of millions 

of manufacturing jobs. The loss of production capacity has kneecapped our ability to 

innovate, as America has ceded its edge in research and development to East Asian 

nations. And as our country has disinvested in manufacturing, nations such as 

Germany-where manufacturing represents 20.6 percent of GDP, compared to just 11.6 

percent here-have steadily increased their investment in modernizing manufacturing. 1 

Still, American manufacturing has remained resilient. In the darkest days for the 

industrial heartland, communities refused to accept the notion that manufacturing was 

a lost cause. Local and state leaders came up with innovative models to save jobs, retain 

industry, and shore up regional economies. These efforts have led to a promising, if 

nascent, manufacturing recovery. The six states cited above have brought back nearly a 

half-million manufacturing jobs since 2010, recovering a greater share of industrial 

losses than have the rest of the country. This turnaround has led to a newfound 

optimism that future economic development can build on the region's history and its 

strategic advantages in manufacturing. 

This growing momentum behind, and renewed commitment to, manufacturing is 

starting to rise to the national level, too. The United States today is still a manufacturing 

powerhouse-the world's second-largest manufacturing nation-and the sector's future 

is critical to the country's overall economic health and global competitiveness. 

Manufacturing represents 68 percent of all U.S. private research and development 

spending, and is key to cutting the trade deficit, which reduces national income by $566 

billion per year. Moreover, a robust manufacturing sector is vital if America wants to be 

a leader in environmental sustainability (climate change innovation requires a new 

generation of products), as well as to our national security (which is compromised by 

reliance on foreign suppliers). As Figure 1 demonstrates, manufacturing is on the rise 

again, in the industrial heartland and throughout the country. 

1 "Manufacturing, value added (% of GOP)," World Bank, 

https://data.worldbank.org/indicator/NV.IND.MANF.ZS?Iocations=DE-US accessed on August 31, 2018. 
80 


36617.043

100 

s 

0 

~ 

0 

~ " 90 0 

~ 

~ > .!!l 80 ;; 

0 

N 

.s 

"0 

!!! 70 "' a. 

E 

0 

"' "' .0 

0 60 -, 

us 

Jan Jan 

2002 2004 

since 2001, Heartland v. 

Jan Jan Jan Jan Jan Jan 

2008 2010 2012 2014 2016 20'!8 

- Heartland 

- Rest of the US 

Source: Bureau of Labor Statistics and authors' calculations. Heartland includes Indiana, 

Illinois, Michigan, Ohio, Pennsylvania and Wisconsin. 

The last two presidential elections demonstrated the surprising political relevance of 

manufacturing, leading commentators to declare that U.S. manufacturing is "having a 

moment." The problem, however, is that campaign rhetoric does not move from 

political photo-ops on factory floors into a long-term, sustainable commitment to 

manufacturing. The debates today in Washington, D.C. are largely limited to the topics 

of trade and tariffs, and neglect to focus on strategies to support and scale efforts to 

bolster the competitiveness of manufacturing clusters and resilience of manufacturing 

communities. 

For the last year, the Century Foundation's High Wage America (HWA) Project and key 

partners have worked to develop an inclusive policy agenda to revitalize manufacturing 

communities, with regional and federal governments working hand-in-hand. 2 An 

2 The Century Foundation would like to thank the High Wage America advisory committee for the support 

of the project and for helpful comments on this report, especially the institutional leadership from Tom 

Croft and the Heartland Capital Strategies/Steel Valley Authority as well as Brad Markell and the 

Industrial Union Council of the AFL-CIO. Additionally, the committee consists of Steve Herzenberg 

(Keystone Research Center, PA), Jack Mills (Insight Center, MA), Steve Sleigh (Sleigh Strategies, 

DC), Teresa Cordova (Great Cities Institute, IL), Bishara Addison (Towards Employment, OH), 

Christy Veeder (Jobs to Move America, NY), Joel Yudken (High Road Strategies), David Robinson 

and Dan Swinney (Manufacturing Renaissance), Riley Ohlson and Brian Lombardozzi (American 
81 


36617.044

initiative of the Bernard L. Schwartz Rediscovering Government Initiative at The Century 

Foundation, HWA kicked off at an event in Washington, D.C. in June 2017, followed by 

the publication of "Revitalizing America's Manufacturing Communities," which 

highlighted state and regional best practices in manufacturing and produced a broad 

framework of four major drivers to accelerate the growth of manufacturing and the 

redevelopment of communities that depend on them. 3 

We then spent the past year hosting summits to hear from more than 500 leaders in the 

industrial heartland: Pittsburgh, in October, 2017; Cleveland, in March, 2018; and 

Chicago, in June, 2018. HWA experts listened to and learned from political, academic, 

business, labor, and community leaders at the forefront of efforts to build a high wage 

regional economy. In each location, we partnered with local groups to research the 

state of manufacturing in that region today, as well as its continuing impact on workers 

and communities. This research and events fleshed out the critical areas for action, 

testing our framework, and surfacing new ideas, models and priorities. Most 

importantly, we left each stop on the tour better informed and more attuned to the 

growing, diverse array of promising initiatives that are taking hold in manufacturing 

communities across the nation, as well as the need for federal action and national 

coordination. Communities are not satisfied with manufacturing recovery for its own 

sake, but rather as a driver toward a more inclusive and sustainable economy. This view 

prioritizes labor and community as stakeholders in economic and policy decisionmaking, and measures success in terms of wage growth and sustainability, not just 

profits. 

This report is the culmination of that tour. It combines insights gleaned from our earlier 

reports and summits in the Midwest, with the best of national research and expertise 

from over the past year to build a concrete policy agenda to bolster regional 

manufacturing initiatives and grow good-paying manufacturing jobs. And while it is 

directed at federal policymakers, it is grounded in the experiences of communities in the 

heartland. The High Wage America tour and research surfaced five priorities for action: 

increasing the pipeline of qualified workers; preventing and mitigating the displacement 

of manufacturing; fostering high-tech manufacturing; enhancing manufacturing 

partnerships; and unlocking new sources of capital. Regional communities have relied 

Alliance for Manufacturing), Michael Goff (Northeast Midwest Institute, DC), Katy Stanton (Urban 

Manufacturing Alliance, WI), Harriet Applegate (Cleveland AFL-CIO, OH), Lee Geisse (Blue Green 

Alliance, OH), Lisa Jordan (United Steelworkers, PA), Bob Bower (Massachusetts AFL-CIO, MA), 

and Ted Chandler (AFL-CIO Housing Investment Trust). The authors would also like to thank 

Amanda Novello and Jeff Madrick very helpful comments and research support. 3 Joel Yudken, Andrew Stettner and The four drivers are spurring innovation; reinvesting in workers; 

mobilizing responsible capital; retaining, restoring and growing sustainable industries. 
82 


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on federal support to drive their efforts forward, and the recommendations below will 

allow them to continue to accelerate their efforts. 

Priority 1: Communities and Employers Must Increase the Pipeline of Qualified Workers 

Even though jobs are coming back, communities and employers must work harder to ensure a 

pipeline of qualified employees for unfilled positions, while ensuring that manufacturing 

provides workers in distressed communities, including communities of color, opportunities to 

obtain these jobs. After bearing the brunt of the largest drop in manufacturing in U.S. history 

from 2000-2010, manufacturers in the heartland are coming back-so much so that their 

growth is outstripping their ability to find labor for all the new positions. Our research found 

that over the past year there were two manufacturing job openings for every person hired in 

the Chicago region. 4 Even in an economically diversified metropolis such as Chicago, 

manufacturing offered more job openings than all but three sectors-including 1S,OOO unfilled 

frontline production jobs that rarely require a college degree. 5 With a rapidly aging workforce 

(one in three manufacturing workers are over the age of fifty-five in Chicago), companies and 

government need to invest in the manufacturing workforce of the future. It's a major endeavor: 

the elements of the education and workforce system that addressed the industrial workforce in 

the past-including vocational high schools and apprenticeships-have been allowed to wither 

for decades. For example, the most recently available data, from 2013, shows that in that year 

Chicago Public Schools had only trained 118 young people to industry-recognized credentials in 

manufacturing, in part because educational systems had turned away from manufacturing to 

focus more exclusively on other high-growth occupations. 6 

The good news is that communities are taking the first steps to rebuild these systems in line 

with the opportunities that exist today. Companies, training providers, unions, and schools have 

worked together to set up new pilot programs, such as the AFL-CIO's multi-city Industrial 

Maintenance Technician apprenticeships and Cleveland's Steelworker for the Future, to create 

a new educational pipeline to manufacturing jobs. These diverse pilots have a consistent 

approach-on-the-job training, training students up to industry recognized credentials and preand post-job placement support-but they are just that: pilots and model programs. They need 

a timely infusion of public support to go to a greater scale and to reach even deeper into 

communities with high levels of joblessness. 

4 Teresa Cordova, Andrew Stettner, and Matt Wilson, "Revitalizing Manufacturing and Expanding Opportunities for 

Chicago's Black and Latino Communities," The Century Foundation and the University of Illinois-Chicago, Great 

Cities Institute, June, 2018, https://tcf.org/content/report/revitalizing-manufacturing-expanding-opportunitieschicagos-black-latino-communities/. 

5 Teresa Cordova, Andrew Stettner, and Matt Wilson, "Revitalizing Manufacturing and Expanding Opportunities for 

Chicago's Black and Latino Communities," The Century Foundation and the University of Illinois-Chicago, Great 

Cities Institute, June, 2018, https://tcf.org/content/report/revitalizing-manufacturing-expanding-opportunitieschicagos-black-latino-communities/. 

6 Rebecca Harris, "Ticket to a Job," Catalyst In Depth, Community Renewal Society, Winter, 2014, 

http://www.chicagoreporter.com/wp-content/uploads/assets/20140206/catalystindepth-winter2014f.pdf. 
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Manufacturing still stands out as a field that can provide good-paying opportunities for 

individuals without a college degree and who have barriers to employment, such as criminal 

records. 7 While manufacturing jobs don't pay as well as they once did, workers in Ohio (for 

example) still earn $2.99 more per hour in manufacturing than they would in other sectors. 8 

These jobs are especially critical in small towns in the heartland, where nearly one in four 

private sector jobs are still in manufacturing.9 For urban communities of color, there is 

tremendous still-untapped potential for manufacturing to address stubborn levels of 

joblessness, especially among young people in places such as Cleveland and Chicago, where 

more than one out of three young African-Americans are neither in school or in a job.10 While 

African Americans are still under-represented in manufacturing (numbers are worse among 

women), our tour revealed encouraging efforts by companies such as Chicago's Laystrom 

Manufacturing and Cleveland's Dan T. Moore companies to reach into communities of color to 

recruit a new generation of workers. The time is right for community-based programs that can 

equalize access to good-paying jobs in manufacturing trades for community of color. As 

described at our Pittsburgh summit by Allegheny County Councilmember DeWitt Walton, the 

goal is to ensure that, when minority workers enter the employment game in a manufacturing 

or construction trade, "a hundred yards is a hundred yards." In Cleveland, Towards 

Employment's Bishara Addison explained that community-level recruitment and ongoing postemployment support services and mentoring was even more critical to manufacturing 

employment success among people of color than hard skills training. This sentiment was 

echoed by numerous other leaders, who also observed that publicly supported workforce 

programs don't provide community leaders the resources they need to effectively recruit 

people of color into them. 

• Recommendation 1: Provide federal grants for career-based K-12 programs targeting 

manufacturing. A $100 million grant program could use revenues from the HlB fees 

(which are visa fees paid by firms who bring in skilled immigrant workers; the proceeds 

are reserved in a federal account for skills training) to fund thirty communities across 

the nation to develop innovative efforts to introduce young people into 

manufacturing.11 (This program would build on the 2014 Youth Career Connect grant 

7 Interview with Victor Dickson, president and CEO of Safer Foundation, By Andrew Stettner, May 29, 2018. 

8 Teresa Cordova, Andrew Stettner, and Matt Wilson, "Revitalizing Manufacturing and Expanding Opportunities for 

Chicago's Black and Latino Communities," The Century Foundation and the University of Illinois-Chicago, Great 

Cities Institute, June, 2018, https://tcf.org/content/report/revitalizing-manufacturing~expanding-opportunitieschkagos-black-latino-communities/. 

9 Andrew Stettner, Joel S. Yudken and Michael McCormack, "Why Manufacturing Jobs are Worth 

Saving," The Century Foundation, June, 2017, https:l/tcf.org/contentlreport/manufacturing-jobs-worthsaving/?session=1. 

10 Teresa Cordova, Andrew Stettner, and Matt Wilson, "Revitalizing Manufacturing and Expanding Opportunities 

for Chicago's Black and Latino Communities," The Century Foundation and the University of Illinois-Chicago, Great 

Cities Institute, June, 2018, https://tcf.org/content/report/revitalizing-manufacturing-expanding-opportunitieschicagos-black-latino-communities/. 

11 H1B training funds were equal to $176 million in FY 2017. See "FY 2019 Budget Appendix: Department of Labor," 

U.S. Office of Management and Budget, https://www.whitehouse.gov/wp-content/uploads/2018/02/labfy2019.pdf, accessed July 12, 2018. 
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programP) The goal is to accelerate career awareness and preparation through a 

funding stream that goes beyond what is available through current federal efforts such 

as the Carl Perkins Career and Technical Education Act and the Workforce Innovation 

and Opportunity Act (WIOA); and to intervene earlier in the career pipeline than would 

apprenticeship grants. Eligible programs would include work-based learning, robust 

engagement of employers, and attainment of industry-recognized credentials, and 

grants that fund school districts that broadly market the benefits of manufacturing 

careers within their communities. Preferences for aid would be given to communities 

with high levels of unemployment and with a large manufacturing footprint (over 

25,000 workers in the metro area). 

• Recommendation 2: Double manufacturing apprenticeships in five years and build the 

infrastructure for sector based education and training. Federal funding should continue 

to be expanded for apprenticeship training programs with a goal of doubling the 

number of registered manufacturing apprenticeships from 17,000 to 35,000 in the next 

five years, using tax credits or grants of $2,000 per apprenticeship to catalyze expanded 

enrollmentY To benefit manufacturing, federal funding should go to proposals such as 

the PARTNERS Act in support of the development of sectoral partnerships that bring 

together companies within the same industry and geography with labor and 

educational institutions. Critically, the PARTNERS Act provides resources to stand up 

these intermediary organization that can drive regional investment toward the shared 

needs of companies and address broader employment opportunities on an industrywide scale. These partnerships can establish apprenticeships for multiple firms (many of 

whom don't have the resource to manage apprenticeship on their own). Some 

proposals include programs outside of the current system of registered apprenticeship 

regulated by the Department of Labor. All federally funded programs should still adhere 

to the nondiscrimination rules present in current registered apprenticeships and limit 

funds to only those programs that pay a liveable post-apprenticeship wage. In addition, 

federal support should also be given to states, industrial partners, and educational 

institutions to establish pre-apprenticeship and pipeline programs, with a specific goal 

of increasing participation of women and people of color in manufacturing 

apprenticeships. These programs ensure that there are diverse cohorts of potential 

apprentices equipped for the technical requirements and ready for the rigors and 

challenges of apprenticeship programs. 

• Recommendation 3: Use wraparound services to strengthen manufacturing 

employment programs in communities of color. In order for disinvested populations to 

take advantage of employment opportunities in manufacturing, communities need to 

implement complementary wraparound services to address the financial and personal 

issues that impact employment success; these services currently are not adequately 

12 U.S. Department of Labor, "Youth Career Connect," accessed August 9, 2018, https:/(doleta.gov/ycc/. 13 U.S. Department of Labor, "Registered Apprenticeship National Results," 

https://doleta.gov/oa/data statistics cfm accessed August 9, 2018. 
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supported by federally funded education and training programs. 14 Wraparound services 

such as transportation, child care, and emergency funds, as well as career counseling, 

case management, and mentoring should be delivered by organizations with specific 

experience in the diverse communities which they are serving. Several key policy 

proposals move in this direction. The Gateways to Careers Act would deliver 

comprehensive services to individuals enrolled in career pathway programs that link 

community colleges and community workforce programs. The PARTNERS Act would 

deliver these services in the context of work-based learning approaches, with a specific 

focus on recruiting communities (especially people of color and women) that have been 

historically underrepresented in construction and manufacturing trades. In addition to 

legislation, the presidential administration can amplify support by providing the 

Departments of Labor and Education guidance on the importance of community-based 

marketing of workforce programs, as well as on how to leverage existing federal 

resources to mount those marketing campaigns. The administration can also advance 

this goal by supporting the use of U.S. employment plans in procurement processes by 

grantees of the U.S. Department of Transportation, to favor not only domestic 

manufacturing but inclusive hiring practices. 15 

Priority 2: Prevent and Mitigate the Displacement of Manufacturing 

In spite of growth, many parts of the manufacturing sector are vulnerable to job loss and 

instability; and there are not adequate tools to help communities save jobs and help workers 

and communities adjust when mass layoffs do come. The heartland in particular has born the 

brunt of plant closures and permanent layoffs. Advocates for manufacturing communities in the 

region have taken a two-prong approach. First, they have sought to be proactive in doing 

everything they can to prevent layoffs. One successful model of this approach, the Steel Valley 

Authority's Strategic Early Warning Network in Pittsburgh, has saved thousands of 

manufacturing jobs through its layoff aversion model that identifies factories at risk of closure 

and provides them targeted business turnaround assistance-a strategy that has been 

replicated nationwide.16 Like the workforce, many small manufacturers have aging owners who 

may shut down their shops unless a proactive approach is taken. Second, they have supported 

a strong system of transition assistance for those who are laid off, and count on governmentfunded benefits and retraining to get back on their feet. Policy Matters Ohio's Mike Shields 

called on worker protection policies to foster a partnership with workers in the heartland-the 

same impulse that inspired Ohio and Wisconsin to enact the first unemployment insurance 

14 "Skills for Good Jobs: An Agenda for the Next President," National Skills Coalition, November, 2016, 

https://www.nationalskillscoalition.org/resources/oublications/file/Skills-for-Good-Jobs-Agenda.pdf. 

15 Madeline Janis, Roxana Asian, and Katherine Hoff, "Harnessing Government Spending to Revitalize Good 

Manufacturing Jobs," The Century Foundation and Jobs to Move America, October 3, 2017, 

httos://tcf.org/content/report/harnessing-government-spending-revitalize-good-manufacturing-jobs/. 

16 Joel 5. Yudken, Thomas Croft and Andrew Stettner, "Revitalizing America's Manufacturing Communities," The 

Century Foundation, October 16, 2017, https://tcf.org/content/report/revitalizing-americas-manufacturingcommunities/. 
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schemes in 1930s to ensure that the economy would retain skilled workers through industrial 

ups and downsY 

• Recommendation 4: Expand trade adjustment assistance into trade, technology, and 

policy adjustment assistance. Congress should overhaul the Trade Adjustment 

Assistance (TAA) program into what manufacturing workers expect it to be-an 

effective, comprehensive approach to mitigate the harmful effects of permanent job 

loss.18 This would require moving from the laborious current standard of factory-byfactory certification to industry- and occupation-wide certification, shortening the time 

frame for certifications, and significantly expanding the eligibility rules to cover 

involuntary job losses not just to trade but also to automation and policy changes, such 

as the closure of a major military base or carbon taxes. 19 TAA employment services 

should be reformed to have better connections to well-documented reemployment 

programs that help dislocated workers get rehired with their existing skills, and to 

proven sectoral training programs when they need to retrain in an occupational course 

or apprenticeship. And TAA should provide a genuine promise of extended income 

support, to guarantee dislocated manufacturing workers an adequate income to live on 

while they go through training and experience extended periods of joblessness. It also 

should provide wage insurance to those laid off workers who won't be well served by 

training, such as those approaching retirement. 20 And the generally effective TAA for 

firms program, operated by Department of Commerce, should follow this broadening of 

eligibility and also shorten the decision-making process for firms at-risk, which is now 

three to four months. 

• Recommendation 5: Improve the implementation of WIOA layoff aversion. The 

Workforce Innovation and Opportunity Act requires states to use federal funds to 

quickly provide information about available employment, training, and social services to 

workers impacted by large announced layoffs, services know as rapid response. 21 A new 

aspect of that law now requires states to use a portion of these rapid response dollars 

to prevent layoffs (such as help finding new markets, business consulting, identifying 

new owners or investors, and retraining incumbent workers), but guidance about this 

17 Michael Shields, "Manufacturing a High-Wage Ohio" The Century Foundation, March 12, 2018, 

https:lltcf.orglcontent/reportlmanufacturing-high-wage-ohiol. 

18 Robert D. Atkinson, "How to Reform Worker-Training and Adjustment Policies for an Era ofTechnological 

Change," Information Technology & Innovation Foundation, February, 2018, http:/fwww2.itif.org/2018-

innovation-em ployment -workforce-policies. pdf? ga=2 .2 79 33820.1317036802.15295 25938-

770564724.1529525938. 

19 Robert D. Atkinson, "How to Reform Worker-Training and Adjustment Policies for an Era ofTechnological 

Change," Information Technology & Innovation Foundation, February, 2018, http:/fwww2.itif.org/2018-

innovation-employment-workforce-policies.pdf? ga=2.27933820.1317036802.1529525938-

770564 724.1529525938. 

20 Andrew Stettner, "Mounting a Response to Technological Unemployment," The Century Foundation, April 26, 

2018, https://tcf.org/content/report/mouriting-response-technological-unemployment/?agreed=1. 21 "Training and Employment Guidance Letter, No. 19-16," U.S. Department of Labor, March 1, 2017, 

https:/lwdr.doleta.gov/directives/attach/TEGL!TEGL 19-16 acc.pdf. 
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requirement came too late to influence state plans for WIOA dollars. 22 The Department 

of Labor needs to give stronger guidance to get more states to provide effective 

business turnaround services to manufacturers at risk of closure, including a directive to 

immediately amend their state plans with more specific layoff aversion plans that 

conform to the guidance. 

Priority 3: Foster High-Tech Manufacturing 

American manufacturing is high-tech and highly innovative-but federal support is needed to 

help manufacturing communities win the global race for twenty-first-century process and 

product development. Heartland communities embrace manufacturing as part of a high-tech 

future, rather than a nostalgic look to the past. In Cleveland, Senator Sherrod Brown's keynote 

remarks included this call for clarification: "To call us Rust Belt demeans our work and 

diminishes who we are. Today's factories in Ohio and around the country are not rusting, 

they're innovative, they're high tech plants." Brown cited Cleveland's ArcelorMittal steel mill as 

the first plant in the world where one person-hour of work creates one ton of steel. 23 In Ohio, 

jobs in advanced manufacturing industries pay $65,000 per year compared to $53,000 in less 

advanced industries, and $47,700 in jobs across the state. 24 Advanced manufacturing refers to 

industries and processes that are capital intensive and rely on technological innovation. 25 

Examples of advanced subsectors include aerospace, electronics, pharmaceuticals, and motor 

vehicles. 

Leaders in all three cities that TCF visited called for increased public-private partnerships to 

bolster advanced manufacturing clusters. Moreover, they are betting on initiatives such as the 

Advanced Robotics for Manufacturing Institute at Carnegie Mellon University (one of fourteen 

institutes funded by the new Manufacturing USA program) to firmly position the industrial 

heartland as the manufacturing hub for a new generation of products. If there is a critique of 

federally funded advanced manufacturing efforts, however, it is that they are too focused on 

technology development and not enough on how to create jobs, connect with local supply 

chains, and educate the local workforce on the skills needed for high-tech manufacturing. 

• Recommendation 6: Institute a new race to the top for advanced manufacturing. To 

capitalize on momentum in the region, the federal government should commit $400 

million over four years to encourage states to undertake initiatives to develop their 

advanced manufacturing sectors-addressing the competitiveness of existing industry 

and promoting the creation of next-generation products. The race would be modeled 

22 Department of Labor, "Workforce Innovation and Opportunity Act; Final Rule" Federal Register 81, no. 161, 

August 19, 2016: 56072 https://www.gpo.gov/fdsys/pkg/FR-2016-08-19/pdf/2016-15975.pdf 

23 ArcelorMittal, "Cleveland, Steel Strong in CLE for 100+ Years," http://usa.arcelormittal.com/ouroperations/steelmaking/cleveland accessed August 9, 2018. 

24 Mike Shields, "Manufacturing a High Wage Ohio," The Century Foundation and Policy Matters Ohio, March 12, 

2018, https://tcf.org/content/report/manufacturing-high-wage-ohio/?session-1. 

25 Mike Shields, "Manufacturing a High Wage Ohio," The Century Foundation and Policy Matters Ohio, March 12, 

2018, https://tcf.org/content/report/manufacturlng-high-wage-ohio/?session=l. 
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after the Department of Education's $1 billion Race to the Top for Early Learning 

Challenge and the $4.35 billion Race to the Top Fund. Similar to these education 

programs, the grants would seek to catalyze state-level investments. Along these lines, 

the National Governors Association's Making Our Future policy academy supported 

teams from eight states to participate in a year long strategic planning process that 

spurred new programs, passed new state legislation, and secured state funding. 26 The 

goal would be to get states to race to the top around innovation rather than to a race to 

the bottom of tax cuts and giveaways-and states would be forbidden from giving grant 

funds to individual factories in the form of incentives. Instead, grant funds would be 

used for new partnerships between public universities and manufacturers, 

apprenticeships in skilled manufacturing trades, or expanded work by manufacturing 

extension agencies to support technology integration among small businesses. States 

would be encouraged to build on existing federally supported programs such as 

Manufacturing USA and the Manufacturing Extension Partnership. State matching funds 

would be required and the Race to the Top would closely align with the distinct 

priorities of governors. 

• Recommendation 7: Extend and expand Manufacturing USA and its institutes. 

Modeled on Germany's highly successful Fraunhoffer-Gesellschaft applied research 

system, Manufacturing USA was created in 2014, as a network of public-private regional 

institutes that bring together large manufacturing companies, academic research 

institutions, small- and medium-sized manufacturers (SMMs), and government agencies 

to foster innovation, collaboration, and workforce education and training in critical 

advanced manufacturing areas. 27 This program is America's leading effort to develop 

advanced manufacturing innovations and jobs. Preliminary evaluations show high levels 

of engagement by leading manufacturers with the institutes and a number of promising 

product innovations. 28 

Congress should double down on this investment. First, Congress only provided each of 

the fourteen institutes with five years of funding. Congress should consider making 

federal core institutional funding for them permanent, with prescribed levels of 

matching funding from private sector partners and/or state governments to ensure that 

federal funding is going to where there is private sector buy-in. 

Second, the number of Manufacturing USA institutes should be expanded beyond the 

current fourteen to the originally planned forty-five institutes, targeting new 

manufacturing technologies, including those that improve the competitiveness of strong 

26 Erin Sparks and Mary Jo Waits, "Making Our Future: What States Are Doing to Encourage Growth in 

Manufacturing through Innovation, Entrepreneurship, and Investment," National Governors Association, January, 

2013. 

27 "The National Network for Manufacturing Innovation," Congressional Research Service, May 5, 2016, 

https://www.evervcrsreport.com/files/20160505 R44371 f9f27674a8cecfa2d2f3cf06e47040ead6b55eb4.pdf. 28 Deloitte, "Manufacturing USA program design and impact," January, 2017, 

https://www2.deloitte.com/us/en/pages/manufacturing/articles/manufacturing-usa-program-assessment.html. 
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legacy industrial sectors (for example, metal fabrication, basic metals production, 

chemicals, and paper). 29 Manufacturing USA institutes have been funded primarily by 

the Departments of Defense and Energy; other agencies should join suit as institute 

sponsors, including the National Institutes of Health, which could invest in medical 

technologies and equipment, and the Department of Transportation, which could invest 

in smart highway and high speed rail manufacturing technologies. 

Third, Congress should extend and strengthen the workforce initiative of each institute 

and ensure greater integration of the workforce education and training components of 

the institutes with their advanced manufacturing innovation activities. Working with the 

Manufacturing Extension Partnerships (MEPs), the institutes should leverage their 

connections with manufacturers, both large and small, to expand existing sector 

partnerships and set up new ones where needed with a focus on high-quality jobs, 

employment equity, skill development, and other workforce development, in 

partnership with local workforce agencies. 

Priority 4: Enhance Manufacturing Partnerships 

Communities are recognizing that modern manufacturing is a team sport, and are nurturing 

their regional manufacturing economies. The federal government needs to do more to support 

and scale them, and foster partnerships across sectors and industries. In Cleveland, Professor 

Sue Helper from Case Western Reserve University told the audience that two-thirds of the cost 

of major manufacturers come from supply chains, and only 8 percent come from direct 

expenses on labor. 30 That means today's manufacturing base consists of ecosystems of 

dispersed suppliers, which tend to be clustered geographically, such as fabricated metals in 

Chicago and rubber in Akron. Public investment can play a critical role in the shared needs of 

clusters in areas such as innovation, workforce training, and technology integration, especially 

for small and medium enterprises, which make up 70 percent of manufacturing employment. 31 

For example, regional agencies are helping small businesses prepare for increasing 

requirements for cybersecurity by manufacturers among their suppliers. The timing is right to 

invest in U.S. manufacturing supply chains-small manufacturers told TCF experts that large 

manufacturers are looking more favorably at the advantages in quality and time efficiency 

provided by domestic suppliers who can use technology to provide a full array of services, from 

product design to just-in-time production. 

29 "The National Network for Manufacturing Innovation/' Congressional Research Service, May 5, 2016, 

https://www. everycrsreport. com/fi les/20160505 R443 71 f9f276 7 4a8cecfa 2d2f3cf06e4 7040ead6b55 eb4. pdf; 

Sridhar Kota and Thomas C. Mahoney, "Manufacturing Prosperity: A Bold Strategy for National Wealth and 

Security," Mforesight, June, 2018, 

https://medium.com/@MForesight/manufacturing-prosperity-a-bold-strategy-for-national-wealth-and-security65d2a97d6dOe. 

30 Moshe Marvit, "Lessons from Cleveland about the Future of American Manufacturing," The Century Foundation, 

Apri/16, 2018, https://tcf.org/content/commentary/lessons-cleveland-future-american-manufacturing/. 

31 Authors' analysis of the Bureau of Labor Statistics, Quarterly Census on Employment and Wages. We find that 70 

percent of manufacturing workers work in establishments with less than 500 employees. 
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Regional policies that affect economic demand can shape manufacturing's future-even 

including decisions that are not thought of as specifically related to the factory sector. For 

example, philanthropic leaders in Cleveland made early investments in LEEDCO to develop the 

wind power capacity of Lake Erie, with an eye to stimulating wind power manufacturing and 

supply chains regionally. 32 But the state's decision, until recently, to freeze standards that 

would have required a greater share of the energy to come from renewable power has allowed 

other states to surpass Ohio in wind generation and related manufacturing. 33 Similarly, 

government procurement of goods and services represents a $2 trillion annual market.34 

Legally, few projects can require regional governments to buy made in America goods; but new 

federal rules allow regional governments investing in mass transit to give a leg up to bids that 

would spur regional manufacturing and local hiring. Jobs to Move America used this tool to turn 

the Chicago's purchase of new subway cars into a major new railcar manufacturing facility, 

complete with an aggressive plan to ensure that residents in the heavily African American South 

Side neighborhood can compete for the facility's 200 unionized jobs. 35 

• Recommendation 8: Reinstitute and expand the 2012-16/nvesting in Manufacturing 

Communities Partnership. Under a 2012 Department of Commerce (DOC) pilot 

program, regions that came together to develop a strategic plan to support competitive 

manufacturing clusters could apply for a federal designation as part of the Investing in 

Manufacturing Communities Partnership (IMCP). This program provided technical 

assistance to recipient communities of the federal grantmaking process, bringing in new 

resources for infrastructure and job training and serving as a catalyst for the ongoing 

collaboration between industry and government.36 This DOC pilot was ended by the 

Trump administration in 2017. Congress should appropriate $30 million for the Defense 

Manufacturing Communities Program-a partial successor for the IMCP programwhich was authorized by the FY 2019 National Defense Authorization Act in August and 

supported by President Trump 37 The Departments of Defense and Commerce should 

consult with IMCP communities and take lessons from the pilot in order to re-establish 

the designation even before specific funds are authorized. Moreover, the program 

32 Moshe Marvit, "Lessons from Cleveland about the Future of American Manufacturing," The Century Foundation, 

April 161 20181 https://tcf.org/content/commentary/lessons-cleveland-future-american-manufacturing/. 

33 Carrie Blackmore Smith, "Kasich breaks with GOP, keeps renewable energy standards," USA Today, December 

27, 2016, https://www.usatoday.com/story/news/politics/2016/12/27 /kasich-breaks-gop-keeps-renewable· 

energy-standards/95896582/. 

34 Madeline Janis, Roxana Asian, and Katherine Hoff, "Harnessing Government Spending to Revitalize Good 

Manufacturing Jobs," The Century Foundation and Jobs to Move America, October 3, 2017, 

https://tcf.org/content/report/harnessing-government-spending-revitalize-good-manufacturing-jobs/. 

35 Corilyn Shropshire, "First step to new CTA rail cars: Build the factory in Chicago," Chicago Tribune, March 16, 

2017, http://www. ch icagotri bu ne .com/business/ ct -cta-new-railca r -plant -0316-biz-20170315-story. htm I. 

36 Amanda Novello, "Revitalize American Manufacturing by Nurturing the Industrial Commons," The Century 

Foundation, April12, 2018, https://tcf.org/content/commentary/revitalize-american-manufacturing-nurturingOffice of Management and Budget, "Follow-on to Statement of Administration Policy-S. 2987 John 5. McCain 

National Defense Authorization Act for Fiscal Year 2019," June 26, 2018, https://www.whitehouse.gov/wpcontent/uploads/2018/06/saps2987s 20180626.pdf. 
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should be strengthened by putting a priority on communities that take action to create 

more opportunities for minorities and women in manufacturing and involve labor in 

community planning. 

• Recommendation 9: Strengthen and expand the Manufacturing Extension Partnership. 

The Manufacturing Extension Partnership (MEP) program is by far the most important 

federal program dedicated to assisting and improving the competitiveness of America's 

small- and medium-sized manufacturers (SMMs; under SOO employees), which account 

for 99 percent of all U.S. manufacturing firms and 70 percent of U.S. manufacturing 

jobs.38 It consists of a network of manufacturing assistance centers, with over 400 

service locations, located in all fifty states and Puerto Rico, supported jointly by federal, 

state, and local government, as well as by private sector funds. Despite strong bipartisan 

support on the Hill, MEP continues to face uncertainty about its budget-including a 

proposal, early on in the Trump administration, to zero out its funding. 39 Funding for 

MEP should be maintained at its historical norm of close to $200 million annually. 

Furthermore, Congress should institutionalize the partnership and bridges now being 

pilot-tested between SMMs and the Manufacturing USA institutes. This includes 

formalizing and supporting the embedding of MEP staff within each institute in order to 

facilitate the diffusion of technologies and processes developed at the institutes out to 

America's broader SMM supplier base. It also could include establishing a small business 

innovation voucher program, redeemable within the institutes, with federal and state 

matching investments. 

Priority 5: Unlock New Sources of Capital 

From the vantage point of community leaders, the region is not getting its fair share of capital 

investment to rebuild its communities. Most of the country's venture capital is invested in 

software companies (57.4 percent)-when it comes to hard technologies that require 

manufacturing, the pattern is now "invent here and manufacture there."40 This investment 

trend has a major geographic impact: industrial states represent 32 percent of all U.S. 

employment but only 9.3 percent of all venture capital investment 41 

38 Fred Block, "A Strategy for Rebuilding the Manufacturing Sector in the United States," The Century Foundation, 

September 20, 2017, https://tcf.org/content/report/strategy-rebuilding-manufacturing-sector-united-states/. 

39 Brendan Duke, "Trump's Budget Is Breaking His Promises on Manufacturing," March 27, 2017, 

https://www.americanprogress.org/issues/economy/news/2017/03/27/429041/trumps-budget-breakingpromises-manufacturing/. 

40 Sridhar Kota and Thomas C. Mahoney, "Manufacturing Prosperity: A Bold Strategy for National Wealth and 

Security," Mforesight, June, 2018, 

https://medium.com/@MForesight/manufacturing-prosperitv-a-bold-strategy-for-national-wealth-and-security65d2a97d6dOe. 

41 Andrew Stettner, "How Federal Government Can Foster Stateside Advanced Manufacturing," The Century 

Foundation, April 9, 2018, https://tcf.org/content/report/federal-government-can-foster-stateside-advancedmanufacturing/. 
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Pension funds are potentially a key lever for reinvestment. In Pittsburgh. United Steelworkers 

president Leo Gerard referred to pension funds as the deferred wages of workers, and declared 

that, "we should be able to use those pension funds for the kinds of returns we can get by 

creating good manufacturing jobs, making a product, making it in a community where people 

can get a job and making it so people can have good wages." In 2016, U.S. pension assets were 

valued at $22.5 trillion, and workers have a voice on trust funds representing $4.35 trillion. 42 

Alongside citizen investors, worker trustees can demand that asset managers invest more 

robustly in sustainable industries and distressed communities. Speaking in Chicago, Illinois state 

treasurer Michael Frerichs asserted that pension investors are uniquely positioned to break free 

from Wall Street's obsession with short-term profits, and invest in sustainable companies, such 

as regional manufacturers, that can produce the long-term financial gains that pension 

fiduciaries are pledged to get. The lack of investment capital is a real everyday problem for 

manufacturers such as Quickloadz, a Cleveland summit attendee from Ohio's section of 

Appalachia, who'd like to scale up manufacturing of their patented winch-free container 

trailers in Ohio, but may have to sell their technology to a larger manufacturer elsewhere. 

While sustainable investing is most popularly associated with environmental issues, 

organizations such as Heartland Capital Strategies in Pittsburgh and the AFL-CIO Housing 

Investment Trust are successfully arguing that the needs of distressed communities are a vital 

part of sustainability. 

• Recommendation 10: Create an industrial bank A federal industrial bank can provide 

low-cost loans and loan guarantees to manufacturers, lowering the cost of raising 

capital for critical national priorities. The European Investment Bank, along with 

numerous national banks in Europe and Canada, has served this function for sixty years 

on the other side of the Atlantic, as has the U.S. Export-Import Bank for American 

industry. at least for a slice of manufacturers. Like proposals for an infrastructure bank 

and the recent successful experiment with Build America Bonds (which needs to be 

revisited and complemented by Made in America Bonds), industrial bank funds would 

require that private lenders provide part of the funding for any supported project. 43 The 

industrial bank could focus on a set of important national needs including accelerating 

green manufacturing, the reshoring of manufacturing jobs to the United States, and the 

restoration of key manufacturing capacities for national security. An interesting source 

that Congress could use to fund the bank would be revenue from tariffs targeting 

dumping, threats to national security, and unfair competition; these dollars could be 

repurposed to the overarching goal of bringing jobs back to the United States. By 

combining the lower-cost incentives that national bank and bond-capitalized vehicles 

42 Willis Towers Watson, "Global Pension Assets Study 2017," January 30, 2017, 

https ://www. wi llistowerswatson .com/ en/insights/2017/0 1/ global-pensions-asset -study-2017. 43 Keith Miller, Kristina Costa, and Donna Cooper, "Creating a National Infrastructure Bank and 

Infrastructure Planning Council," Center for American Progress, September 2012 

https://www.americanprogress.org/wp-contentJuploads/2012/09/lnfrastructureBankReport.pdf, and 

Michael lind and Daniel Mandel, "Made in America Bonds," New America Foundation, March 2010 

https://www.newamerica.org/economic-growth/policy-papers/made-in-america-bonds/. 
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might create with existing tax credit provisions, Congress would dramatically increase 

investment capital availability for small and medium enterprises. 

• Recommendation 11: Establish a national economically targeted/impact Investment 

clearinghouse. According to The Forum for Sustainable and Responsible Investment, the 

size of the sustainable, responsible, impact investing market has grown from $4.8 trillion 

in 2012 to $8.1 trillion as of the end of 2016 (this includes pension and other 

institutional funds). This market now accounts for $1 out of every $5 invested by asset 

managers in the United States. An investment clearinghouse would foster coinvestments with the private sector and the industrial bank to mobilize and amalgamate 

pension and impact investments. Utilizing existing public guarantees/incentives in some 

limited cases, the clearinghouse could encourage greater risk-taking in targeted 

innovative sectors and projects. Finally, the clearinghouse would work with various 

stakeholders to encourage investment management firms to develop new, innovative 

investment products to fill capital gaps.44 

• Recommendation 12: Establish a revolving technology loan for small businesses. The 

U.S. Small Business Administration should create a revolving loan fund that particularly 

targets small manufacturers who are struggling to upgrade their technology to 

effectively meet the demands of supply chains, enabling them to upgrade their 

production equipment, cybersecurity, and networks, and install smart manufacturing 

technologies, such as sensors. 45 As supply chains in U.S. manufacturing have become 

more diffuse, the project of modernizing manufacturing depends on the actions of small 

companies, and small companies tend to have greater challenges accessing capital. A 

revolving loan fund, which would be self-sustaining, would be an efficient way for the 

federal government to help solve the problem. 

Conclusion 

Stagnating wages and income inequality are a seminal crisis in America. Revitalizing 

manufacturing is a critical step to restoring middle class jobs, especially in the industrial 

heartland. The High Wage America project's scholarly and on-the-ground research in heartland 

communities found grounds for optimism, with a nascent industrial recovery and promising 

partnerships between companies, communities and labor. Stepped up investments by the 

federal government can play a critical role in driving this progress. To be truly effective in 

revitalizing American manufacturing, the plans in this report for federal-state partnerships must 

44 Keith Miller, Kristina Costa, and Donna Cooper, "Creating a National Infrastructure Bank and Infrastructure 

Planning Council," Center for American Progress, September, 2012, https:/lwww.americanprogress.org/wpconten t/ uploads/2012/09/1 nfrastru ctu reBankReoort. pdf. 

45 Sue Helper and Tom Mahoney, "Ensuring American Manufacturing Leadership through Next Generation Supply 

Chains," Mforesight, June 2017, https:/(medium.com/@MForesight/the-smart-supply-chain-5bb39fafbdcl. 
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be accompanied by national policies, create a new regime of fair international trade, and 

harness federal spending (Buy America) to stimulate national demand. 

The recommendations in this report would represent an approximately $2 billion per year 

increase in support for manufacturing communities-still far less than what other leading 

industrial nations spend, but representing a major boost to the manufacturing sector in a 

critical part of the nation. This includes $700 million per year to fully fund forty-five 

manufacturing USA institutes, expanding TAA at a cost of approximately $500 million per year, 

capitalizing the industrial bank with $300 million per year, apprenticeship, education, and 

training programs at a cost of $300 million million per year, increasing MEP and Manufacturing 

Communities Partnerships at a cost of $100 million per year, and a cost of $100 million per year 

for a race to the top for advanced manufacturing. 

These investments in manufacturing should be seen as a one part of a broader strategy to set 

the nation on a high wage path. That national strategy-benefiting workers in manufacturing 

and across the economy-includes revamping labor laws and workforce protections, monetary 

and fiscal policies that drive wage growth, and an education and training system that facilitate 

upward mobility. These policies see well-paid workers as the economy's greatest asset and the 

driver of a more productive economy and rebuilding of a vibrant middle class. 

Priority 1: Communities and Employers Must Increase the Pipeline of Qualified Workers 

• Recommendation 1: Provide federal grants for career-based K-12 programs targeting 

manufacturing. 

• Recommendation 2: Double manufacturing apprenticeships in five years and build the 

infrastructure for sector based education and training .. 

• Recommendation 3: Use wraparound services to strengthen manufacturing 

employment programs in communities of color. 

Priority 2: Prevent and Mitigate the Displacement of Manufacturing 

• Recommendation 4: Expand trade adjustment assistance into trade, technology, and 

policy adjustment assistance. 

• Recommendation 5: Improve the implementation of WIOA layoff aversion. 

Priority 3: Foster High-Tech Manufacturing 

• Recommendation 6: Institute a new race to the top for advanced manufacturing. 

• Recommendation 7: Extend and expand Manufacturing USA and its institutes. 

Priority 4: Enhance Manufacturing Partnerships 
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• Recommendation 8: Reinstitute ond expand the 2012-16/nvesting in Manufacturing 

Communities Partnership. 

• Recommendation 9: Strengthen and expand the Manufacturing Extension Partnership. 

• Priority 5: Unlock New Sources of Capital Recommendation 10: Create an industrial 

bank. 

• Recommendation 11: Establish a national economically targeted/impact investment 

clearinghouse. 

• Recommendation 12: Establish a revolving technology loan for small businesses.