We all know the manufacturing industry has taken big hit in employment over the last decade.  However, it still remains a strength of our economy.  There are 26,000 people that still make things in Berks County.  Our state has 500k people and there are 11 million people employed in manufacturing in our nation.  While the employment losses in manufacturing have slowed, we continue to lose these high paying jobs with good benefits as our trade deficit mounts. We are still the world’s largest manufacturing base, but will soon lose that title to China.  The ability to export is essential to retaining our manufacturing base. But we currently import about $40 billion dollars a month more in goods and services than we export.

Rick Malliris, President of KB Alloys and a former member of the Chamber Board shares his thoughts on trade with you in the presentation below.  He knows firsthand the unfair trade practices and policies of some foreign competitors that contribute to our trade deficit.  He helped draft the Trade position recently adopted by our Board of Directors.

• Many of our cities are in desperate financial trouble and nearing meltdown
• They used to be manufacturing based, but manufacturing jobs have gone off-shore
• There is a common problem for these cities
  • Poor, low skilled and uneducated citizens
  • Who are not capable of earning enough to pay the taxes needed for services
  • Who are requiring more services
• This affects the areas around the cities as well as the core
  • Higher crime rates
  • Deteriorating infrastructure
  • Social stress
  • Increased debt costs (higher risk)
• Bringing back manufacturing jobs is the best solution
  • Provides middle class incomes
  • Provides skill development for lower education attainment
  • Provides a multiple of supporting jobs
  • Provides needed tax revenues
• A major reason for the job loss is foreign government mercantilism
  • Particularly China
  • Many subsidies that violate concepts of fair trade and WTO rules
  • For many basic industries the labor savings are far lower than the transport costs to export back to the US
  • We need to level the playing field
• We need an effective trade policy for the US
  • Countervail cheating
    • Currency manipulation
    • Border tax adjustments
    • Tax avoidance through mislabeling of import codes
  • Enforce agreements
    • Food safety requirements
    • Country of origin labeling
  • Require performance measurement on all trade agreements

By Ellen T. Horan – President & CEO

When people ask me if I watched the President’s State of the Union address, I said are you kidding, I took notes!

I look for opportunities to listen when our elected officials step out of the day-to-day political fray and express their vision and their leadership. Our Chamber Endorsement Taskforce does the same thing when they interview candidates for office. More important than an individual’s position on any one issue is their vision for our future and their potential to show leadership.

Some of the highlights of the State of the Union, I felt, were Obama’s proposed tax cuts for small business as a short term stimulus and his longer term call for strengthening education, expanding exports, and using nuclear and off-shore drilling to expand energy supplies.

I like that the first issue to come out in follow-up was an incentive based Jobs Proposal focused on small business. The incentives put in place in previous stimulus packages for car purchases, first time home buyers and energy efficiency home improvement products did stimulate consumer spending in those areas which was much needed. The incentive to increase wages will definitely be well received as many companies have frozen wages and/or reduced hours and would like to provide increases if at all possible in 2010.

The President suggests that small businesses that increase wages or hours for their existing employees will be reimbursed for the Social Security payroll taxes they pay on real increases in their payrolls.

The President’s intent to strengthen workforce focused on strengthening the country’s community colleges. Greater Reading is well positioned in that arena with a strong community college that has invested in a Technology Center and can only be stronger if more resources are brought to the table. The President also outlined ways to make college more affordable with tax credits for tuition payments and loan forgiveness. Increasing our education attainment levels is important for our region because we currently lag state and national averages in education levels, which is a significant competitive disadvantage.

Our region also has a higher than average employment rate in manufacturing with 30000 Berks Countians still employed in making things. Companies that export or that are tied to customers that export are better positioned to survive. Here, the President talked about stronger enforcement of trade agreements. That is very important, but we also need Washington to get serious about addressing other countries policies that set their currency at artificially low levels, most notably in China. US manufacturers are placed in a serious disadvantage. I was not surprised to hear our President call for increased investment in research and development in energy, with a focus on biofuels and clean coal. But I was surprised, and pleased, at his call for more nuclear power and off shore drilling for gas and oil. Our region’s energy dependence on coal based electricity would certainly benefit as we can advance clean coal technologies.

While we need to remain vigilant on the issues we oppose such as cap and trade, card check and many components of the healthcare bills, we need to also hold our elected officials accountable to showing leadership and vision in the areas of energy, workforce and our countrys global economic positioning. We need to let them know… we’re taking notes!

What were your thoughts on President Obama’s proposed items discussed druing the State of Union address?