An Agenda for Growing High-Wage Pennsylvania Manufacturing Jobs

Authors: 
Stephen Herzenberg
Publication Date: 
October 13, 2017

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WHY A STATE MANUFACTURING POLICY AGENDA NOW

Since early 2010, the United States has enjoyed its first growth in manufacturing jobs in nearly two decades, an increase of 955,000 jobs.[i] This steady growth could be a turning point, as more U.S. manufacturers recognize the downside of distant sourcing. Yet Pennsylvania has so far largely missed out, with its number of manufacturing jobs slightly down over the past seven years, a loss of 8,000 jobs rather than the 46,000 that would have resulted from keeping pace with the nation.

The “Agenda for Growing High-Wage Pennsylvania Manufacturing Jobs” could catapult the Keystone State to the front of the U.S. manufacturing renaissance, boosting the growth of good jobs, wages, innovation and profits through initiatives in five areas.[ii]

 I.        Establish a Pennsylvania Manufacturing Council

II.      Ride the Reshoring Wave and Retain Existing Manufacturing Jobs

III.    Expand Financing for Manufacturing and Innovation

IV.    Build Skills for 21st Century Making

V.      Boost Demand for Pennsylvania Manufactured Goods

A recurring theme in this agenda is the need to invest in the “industrial commons” that supports Pennsylvania manufacturers – the community infrastructures (or “industry specific public goods”) that boost the competitiveness of large numbers of manufacturers in industry clusters or all of manufacturing. As with traditional public goods that support businesses economywide – e.g., transportation, education, telecommunications, basic research – America and Pennsylvania today underinvest in infrastructure specific to manufacturing that underpins the success of large numbers of businesses: innovation partnerships with research universities, industry training partnerships, joint marketing (“Made in Pittsburgh”), and so on. In the global, network-based, knowledge economy this underinvestment is short sighted. Moreover, while Pennsylvanians may feel that the state currently has no resources available to invest in a new manufacturing strategy, the “2017-18 Governor’s Executive Budget,” (p. A1-11) notes that “Last year, the Department of Community and Economic Development approved nearly $1.1 billion in low-interest loans, tax credits, and grants for projects across the commonwealth…”  Some of the state’s existing subsidies for individual businesses should be redeployed to the industrial commons of a revitalized Pennsylvania manufacturing sector, including many of the specific policy options below.




[i] Manufacturing job numbers in this paragraph are seasonally adjusted Current Establishment Survey (CES) figures from Table 5 of http://www.bls.gov/news.release/laus.t05.htm. The U.S. manufacturing jobs number hit a trough in February and March 2010 and the Pennsylvania manufacturing jobs number in January of 2010. The estimates of jobs gained in the United States and lost in Pennsylvania since the first quarter of 2010 are based on a three-month average as is the estimate of how many jobs Pennsylvania would have gained if its total had grown at the rate that U.S. manufacturing jobs grew.

[ii] For a state manufacturing agenda that overlaps the recommendations here, see Stephen J. Ezell and Robert D. Atkinson, Fifty Ways to Leave Your Competitiveness Woes Behind: A National Traded Sector Competitiveness Strategy, Information Technology and Innovation Foundation, September 2012. Pp. 45-50.

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