Economy
2:21 pm
Wed January 15, 2014

Obama Unveils New Plans To Encourage Manufacturing Jobs

Originally published on Wed January 15, 2014 4:44 pm

Transcript

AUDIE CORNISH, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Audie Cornish.

MELISSA BLOCK, HOST:

And I'm Melissa Block. President Obama has been talking a lot lately about income inequality. Today, he visited a factory in North Carolina and announced new steps that he said would create more good-paying, middle class jobs. He plans to do that by boosting American manufacturing and at the center of that plan is a big idea: a new, federally-funded innovation institute.

Here's NPR's Chris Arnold to explain how it would work and why some economists have doubts.

CHRIS ARNOLD, BYLINE: In his last State of the Union address, the president said he wanted to create these new manufacturing institutes across the country. The goal is to bring together industry, universities and government to spur innovation and to help private companies come up with new products and to hire more workers.

PRESIDENT BARACK OBAMA: We want to do that here in North Carolina and we want to do this all across America.

ARNOLD: The president spoke at North Carolina State University in Raleigh. He's been asking Congress to create dozens more of these innovations hubs. Congress hasn't passed any of that legislation yet, but the president says he can start the first few of these himself.

OBAMA: And today, I'm here to act, to help make Raleigh Durham and America a magnet for the good high tech manufacturing jobs that a growing middle class requires and there is going to continue to keep this country on the cutting edge. So...

ARNOLD: This particular institute will seek to develop a new generation of computer chips and electronics. The White House has committed $200 million so far to these institutes across five federal agencies. The president said Germany has more than 60 of these types of innovation institutes helping its manufacturing industry and the U.S. should do something similar.

Still, some economists are less than enthusiastic.

ENRICO MARETTI: Manufacturing employment has been declining for four decades now and it's one of the industries that has performed the worst over the long run.

ARNOLD: Enrico Maretti is a labor economist at UC, Berkeley. He says that manufacturing has lost about 7 million jobs in the past 35-odd years and it's gained about half a million of those back during the recovery more recently. But still, he says, the long run trend is down. He'd rather see resources spent to support more promising industries in terms of job growth.

MARETTI: If you look at jobs in life science, they've been growing at a rate that is 12 times faster than the rest of the labor market.

ARNOLD: Maretti says it might sound good to say you want to help the middle class with manufacturing jobs, but he's not optimistic that that will do much to help, mainly because he thinks that those jobs will continue to get replaced by computers and machines. But other economists say that they like what the president's doing here.

Peter Cappelli is a labor economist with the University of Pennsylvania's Wharton School.

PETER CAPPELLI: It's a good idea, you know. U.S. has the capability to do much better in manufacturing than we've been doing.

ARNOLD: David Autor is also a labor economist. He's at MIT and he studies the impact of technology and globalization. What he likes about these government-backed innovation hubs is that they're not picking this technology or industry over that one, pushing a particular company, say, that makes solar panels or something.

DAVID AUTOR: So I think they're aiming at the right target here. Whether it will all work, I doubt it, but some of it will work and some of it works really well, even if most of it doesn't it will still have been a good investment.

ARNOLD: The White House says it will announce the creation of two more manufacturing innovation institutes in coming weeks. Chris Arnold, NPR News. Transcript provided by NPR, Copyright NPR.