Obama’s Manufacturing Plan Isn’t New — Here’s How It’s Gone So Far

by Patrick Brennan

Yesterday at a speech in North Carolina, President Obama talked up his plan for special “manufacturing-innovation institutes” across the country as a way to revive American manufacturing and, hopefully along with it, American manufacturing jobs. Three of them are on track to open, and this specific idea, he introduced in last year’s State of the Union. He proudly proclaimed that his policies have produced an environment where ”our manufacturers have added 568,000 [jobs] over the past nearly four years, including 80,000 over the past five months.” Unfortunately, while this sounds impressive, it isn’t — by his own metrics.

During the 2012 campaign, the president released a nicely designed pamphlet laying out his economic plan for America, part of which was devoted to laying out his plan for manufacturing, which included . . . a plan to open 15 to 20 “manufacturing-innovation institutes.” (He hasn’t quite gotten to 15 or 20 of them, which might explain why the audacious promise he made about manufacturing jobs hasn’t panned out.)

Here’s what the White House projected, by smoothing out manufacturing-jobs growth from the preceding two years and simply drawing a line over the next four, creating by 2016 a total of 1.5 million new manufacturing jobs from the industry’s low point, 2010:

As you can imagine, this kind of policy-by-Paint hasn’t quite panned out. Checking in on his plan 15 months later, here’s what we’ve seen. The blue line is manufacturing-jobs data from October 2010, the curvy red line is the updated jobs data, and the straight red line is Obama’s election-year projection:

This gap may not look all that large, but it adds up to more than 300,000 jobs. The ambitious manufacturing plan Obama campaigned on was going to add 1 million jobs over six years — a period of time during which the American economy needs to create 9 or 10 million just to keep up with population growth — and it’s not even coming close to doing that. And yet he just tried to sell it to the American people again.

His plan would return us to January 2009 levels of manufacturing employment, and it’s not even close to doing that. Moreover, as I explained back in 2012, the fact that we’ve even seen even this growth in manufacturing employment has something to do with the U.S.’s natural-gas boom, which the Obama administration has done nearly nothing to encourage. It’s made chemicals manufacturing and energy-intensive manufacturing of all types cheaper, while rising costs in China, Mexico, and elsewhere mean that some manufacturing is “re-shoring” and moving back to the U.S. But this hasn’t translated into serious jobs growth, because, it turns out, the fact that manufacturing used to create millions of jobs that paid Americans decent wages doesn’t mean it will ever do so again (no matter what lines the president’s able graphics staff draw on a chart). Like some of the president’s other favorite policies right now, such as the minimum wage, a manufacturing revival packs tremendous intuitive appeal, but little merit as a way to build a 21st-century economy with a strong middle class. Whether Republican politicians have done much better to offer such a strategy, though, is a reasonable question.

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