Rep Gingrey: How to stop the spread of the “Rust Belt”
When people think in terms of the “Rust Belt,” cities like Gary, Indiana, Detroit or Milwaukee spring to mind. But the rust is not confined to the Northeast and Midwest. Rust can be found here in Atlanta and across Georgia.
Consider the General Motors plant in Doraville or the Ford Motors operation in Hapeville. A local Peachtree City resident recently recalled that during the GM factory’s peak, its parking lots were full day and night. Today, the steady stream of workers and cars have disappeared. The company that employed thousands, including four of his brothers—as welders, machinists or power tool repairmen—closed its doors, leaving the sprawling facility a ghost town.
The United States was once a great producer, and manufacturing, a great equalizer. If you possessed a skill or could work with your hands, a college degree was not a prerequisite to success.
Contrast that to today. In the last two decades, Georgia has lost more than 160,000 manufacturing jobs. During the 1970s, one in four Americans were employed in manufacturing. In recent decades, however, these industries have entered a free fall, with a 40 percent decline from their 1979 peak.
There are those who’ve written off American manufacturing, but I’m confident this sector can thrive again. It’s not U.S. workers that have caused this industry to crumble—we have the highest-skilled workforce with the deepest pool of knowledge in the world—it’s stifling regulations, burdensome economic policies and antiquated union practices.
Our oppressively high corporate tax rate is a major factor in overseas outsourcing. At 39.2 percent, it is the highest in the developed world. President Obama’s proposal of reducing the rate to 28 percent is welcome news, but still comes up short. Studies have found that, in order to have a lasting economic impact, rates must be lower.
The president has called for revival of manufacturing jobs repeatedly, particularly during this year’s State of the Union speech. However, in his attempts to address this problem, many of his policies have only served to perpetuate it.
For example, the National Association of Manufacturers (NAM) said in February that the President’s FY13 budget is full of “one job-killing tax increase after another.” According to NAM, the proposed taxes on energy producers, small businesses and other job creators would be devastating.
Another obstacle U.S. manufacturers face are crippling federal regulations. Passed quietly, often in lieu of failed legislation, regulations from agencies like the Environmental Protection Agency (EPA) add crushing burdens on our nation’s job creators.
Last year, the EPA mandated a combination of rules commonly referred to as “Boiler-MACT,” which are estimated to cost $14.4 billion and 224,000 jobs. In response, the House passed legislation delaying implementation and directed the EPA to develop less onerous regulations.
Another way to provide relief and a competitive edge to manufacturers is to enter into free trade agreements. Last year, I supported free trade bills with Panama, Colombia, and South Korea. The U.S. Chamber of Commerce estimates that opening up these markets could generate up to 250,000 jobs and billions of dollars in exports. Lowering or eliminating tariffs helps create an environment where American businesses can compete in the global marketplace.
There are also projects here at home, like construction of the Keystone Pipeline and the deepening of the Savannah Harbor, which would put manufacturers back to work immediately. Collectively, these infrastructure projects ultimately represent hundreds of thousands of jobs and billions in investment.
Both the pipeline and harbor would require the skill sets of those hardest hit by the recession—pipefitters, machinists, and welders. The economic “ripple effect” they would create locally and nationally are enormous. In fact, in anticipation of the Savannah port expansion, Caterpillar and Kia Motors have announced new operations in Georgia.
Along with Kia, other auto companies have opened plants in Right to Work states, including BMW in South Carolina and Volkswagen in Tennessee. Auto manufacturing jobs have also sprung up in Alabama, Kentucky, North Carolina, Virginia, and Texas. According to one estimate, this has ultimately created 91,000 jobs in non-unionized states.
By altering our economic policies, deregulating job creators, reducing union influence, and approving vital infrastructure investments, the United States can reclaim its status as world leader in production. This puts Americans back to work, companies back in business, and allows rusted towns to return to prosperity.