Eating the seed corn won’t help Trump achieve 4% growth

When President Trump took office in January, the White House website rolled out a goal consistent with his campaign pledges on the economy.

“To get the economy back on track, President Trump has outlined a bold plan to create 25 million new American jobs in the next decade and return to 4% annual economic growth,” reads a portion of the page on “Bringing Back Jobs and Growth.”

There’s nothing wrong with ambitious goals: Elected officials often set them to challenge their colleagues, competitors, and citizens alike.

However, there’s plenty wrong when those goals come into direct conflict with policies and actions that seem destined to produce the opposite result.

Such is the case with Trump’s plan to zero out federal support for the Manufacturing Extension Partnership program within the National Institute of Standards and Technology. The program has helped manufacturers improve productivity and add jobs since the late 1980s.

The partnership is active in all 50 states and especially so in Wisconsin and other Midwest and Southern states that swung the election for Trump in November.

The Wisconsin Center for Manufacturing and Productivity is the state’s hub. It uses the Wisconsin MEP and the UW–Stout Manufacturing Outreach Center to help small- and medium-sized manufacturers improve operations, expand exports, and adopt new technologies and systems.

In short, the partnership is a public-private advisor that specializes in helping manufacturers become more competitive.

Wisconsin has a five-year federal agreement that calls for $16.3 million in federal funding to be matched by $21.1 million from other sources, including industry itself. In Wisconsin alone the program has helped attract or retain 16,000 jobs over time. The federal program was unanimously reauthorized by Congress last year, a fact that should speak to its credibility.

Studies have concluded that MEP has worked best in some of the very states carried by Trump, such as Wisconsin, Michigan, Pennsylvania, Ohio, and North Carolina. The U.S. Bureau of Economic Analysis reports Wisconsin is second only behind Indiana in the percentage of workers engaged in manufacturing — 13.3% of the total workforce.

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While the total number of manufacturing workers in Wisconsin has declined since 2000, as it has in other states, manufacturing plays some role in 71 of 72 Badger state counties.

The U.S. Department of Commerce reported recently that Indiana (50) and Ohio (48) had the most counties where manufacturing accounted for at least 20% of total earnings. Next in line were Tennessee (42 counties) and Wisconsin (40 counties).

Jobs and earnings are only part of the picture, however. Sales growth and productivity are just as important, and it will be difficult for Trump to hit his 4% goal without investment in key sectors such as manufacturing and technology.

The United States has been bogged down in a slow growth pattern since the financial crisis of 2008, growing by 1.5–2.5% annually for the past seven years. That is lower than the 3.1% annual GDP growth the nation averaged since 1950.

The easy answer for that slump would be to blame someone else — Mexico, China, South Korea, or Brazil, to name likely suspects. In truth, much of the fault still lies at home with companies that have failed to keep up with the global Joneses, Garcias, and Wangs.

The manufacturing companies that survive in the years ahead will be those that:

• Compete through innovation, product development, and market expansion at home and abroad;
• Reduce costs through a mix of systems, techniques, and management tools;
• Create a culture that attracts, retains, and develops talent; and
• Pursue certifications that set a company apart while fulfilling local, state, national, and even international qualifications. 

Competition, costs, culture, and certifications are the recurring themes of the Manufacturing Extension Partnership. In a state with a historic manufacturing tradition and one of the nation’s highest shares of manufacturing jobs, those 4-Cs are worth keeping alive.

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