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The Lesson of Pittsburgh for G-20: Manufacturing Matters

September 23rd, 2009 | James Parks

The revival of Pittsburgh, site of the G-20 summit this week, can provide valuable lessons for the world’s leaders. Among them: Manufacturing matters and poor trade policies hurt everyone.

Pittsburgh, G-20 and the New Economy: Lessons to Learn, Choices to Make,” a report released today by the Campaign for America’s Future (CAF), makes clear that the renaissance of Pittsburgh after the collapse of the steel industry was cut short because of the lack of a national industrial policy and the nation’s trade policies.

During a telephone news conference, CAF Co-Director Robert Borosage said some manufacturing jobs in Pittsburgh were replaced by high-end jobs in education or medicine.

But many were replaced by jobs in hotels and food services—jobs that never paid as well and proved even more vulnerable in the recent downturn. Some manufacturing jobs were never replaced at all. That helps explain why the city’s population is declining, especially among youth, who seek opportunity elsewhere.

That idea was echoed by more than 400 people who marched through the streets of Pittsburgh on Sept. 20 calling for an economic recovery that includes jobs for the unemployed.

The march set out from a local church where some 25 people slept overnight in tents to symbolize the poverty that lies behind the glitz of the renewed downtown Pittsburgh.

During the news conference today, Sen. Sherrod Brown (D-Ohio) said trade policies were at the core of the steel industry decline. He praised President Obama’s recent decision to provide relief to the domestic consumer tire industry in response to surging tire exports from China.

Obama’s action was significant, Brown said, because it is the first time a president has really enforced trade rules. He said he hopes it leads to even more complaints as U.S. industries see that their government cares about fair trade.

Brown added that the country “cannot tolerate” trade policies that spawn low wages and allow illegal trade subsidies in China and other countries to decimate our economy.

Economist Jeff Madrick of the New School’s Schwartz Center for Economic Policy Analysis, said the nation’s manufacturing sector has been the victim of deliberate neglect by policymakers. It is clear, he said, that union manufacturing jobs pay better wages and have more benefits than service jobs.

The G-20 summit is a perfect time for U.S. officials to take a hard look at what has happened to workers over the past decades. For example, the median wage for males is less today than it was in the 1970s when you take inflation into account. And workers’ wages have not kept up with productivity for 25 years.

We need new policies to stimulate manufacturing. This [decline] has gone on too long.

The report specifically proposes an industrial policy that promotes manufacturing. Eric Lotke, author of the report, writes:

We need to dispel the notion that America has moved beyond the production of goods. From cars to computers to refrigerators, a country needs things. If we don’t make those things here, then someone else gets our money.

The report also says the experience with the steel industry in Pittsburgh should spawn new trade policies that reflect the truce functioning of the market. It cites Obama’s decision in the tire case as a first step in this new direction.

Read the CAF report here.

Lotke also says the G-20 summit provides an opportunity to examine American patterns of production and consumption. Even when the economy was growing, America ran a combined trade deficit and interest payments of more than $700 billion every year, he said.

We borrowed $2 billion every day to cover the difference. That might have worked well for the countries we bought and borrowed from—but it worked less well for America. It was never sustainable anyway.

As the G-20 leaders plan a recovery from the global downturn, they should not assume that the United States will remain the world’s consumer—spending more than we earn and paying for it with personal and national debt. The G-20 must chart the process by which the global economy that emerges from the crisis is more balanced, and less dependent on U.S. consumption. Growth must be sustainable in Pittsburgh as well as Beijing.

One avenue to create more manufacturing jobs is through the green revolution. Tomorrow, the Alliance for Climate Protection’s Repower America campaign, the USW and the Blue Green Alliance will conclude their Clean Energy Jobs Tour with a rally in Pittsburgh.

The Jobs Tour, a monthlong campaign with more than 50 events in 22 states, is highlighting how a transition to a clean-energy economy will create jobs while reducing harmful carbon pollution and breaking our dependence on foreign oil.

Says David Foster, executive director of the Blue Green Alliance:

We can create millions of jobs building the clean energy economy—whether it’s manufacturing the parts for windmills, building hybrid car batteries or weatherizing homes to make them more efficient. By transitioning to a clean-energy economy, we can revitalize America’s manufacturing sector and boost our economy for the long run by creating jobs here at home.

“Building a clean energy economy can revitalize American manufacturing, but only if we commit to using domestically produced components,” said USW President Leo Gerard.

In confronting the challenges of recession, global warming and energy independence, we have an opportunity to transform our economy and create good jobs that truly are Made in America.

About the Author James Parks: had his first encounter with unions at Gannett’s newspaper in Cincinnati when his colleagues in the newsroom tried to organize a unit of The Newspaper Guild. He saw firsthand how companies pull out all the stops to prevent workers from forming a union. He is a journalist by trade, and worked for newspapers in five different states before joining the AFL-CIO staff in 1990. He has also been a seminary student, drug counselor, community organizer, event planner, adjunct college professor and county bureaucrat. His proudest career moment, though, was when he served, along with other union members and staff, as an official observer for South Africa’s first multiracial elections.

This article originally appeared in the AFL-CIO blog on September 22, 2009. Re-printed with permission by the author.

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