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President Wants Point Person on Manufacturing

Friday, September 5, 2003

President Bush announced on Monday that he has told Commerce Secretary Don Evans that he wants him to appoint an assistant secretary “to focus on the needs of manufacturers, to make sure our manufacturing job base is strong and vibrant.”  The President made the announcement saying, “I understand for a full recovery, to make sure people can find work, that manufacturing must do better...We’ve lost thousands of jobs in manufacturing, some of it because of productivity gains...but some of it because production moved overseas.”

No additional details were provided on the responsibilities of the position, but according to a Commerce press release, the new Assistant Secretary for Manufacturing and Services "will help address the competitive challenges and opportunities facing the U.S. manufacturing sector."

The announcement comes on the heels of severe job losses in manufacturing since early 2001. Of the 2.7 million jobs the U.S. economy has lost during that period, 2.4 million were in manufacturing with the downturn eliminating more than one in 10 of the nation's factory jobs, according to ABC News.

These manufacturing jobs may never be recovered due to a permanent change in the make up of the economy, according to economists at the Federal Reserve Bank of New York. They hypothesize that structural changes in the economy (i.e., permanent shifts in the distribution of workers throughout the economy) explain why the economist-declared recovery from the most recent recession has brought no growth in jobs.

The Fed economists report, “We find evidence of structural change in two features of the 2001 recession: the predominance of permanent job losses over temporary layoffs and the relocation of jobs from one industry to another. The data suggest that most of the jobs added during the recovery have been new positions in different firms and industries, not rehires. In our view, this shift to new jobs largely explains why the payroll numbers have been so slow to rise: Creating jobs takes longer than recalling workers to their old positions and is riskier in the current uncertain environment.”