Post Labor Day report says recovery is fragile

This year’s report focuses on the uncertainty facing manufacturers and examines specific legislation, laws and regulations that will have a detrimental impact on the economy.
By SCMR Staff
September 08, 2010 - SCMR Editorial

The National Association of Manufacturers (NAM) today released its annual economic report entitled “Labor Day 2010: The Impact of Anti-Labor Policies on Working Men and Women.” This year’s report focuses on the uncertainty facing manufacturers and examines specific legislation, laws and regulations that will have a detrimental impact on the economy.   

“The most concerning fact is that for the second straight Labor Day, national unemployment remains well above 9 percent, and there are few indications people will go back to work anytime soon,” said NAM President John Engler. “Americans want jobs, but proposals that expand government, increase taxes and impose new regulations will make business in the United States less competitive. These proposals will stifle the already weak recovery and destroy manufacturers’ ability to create jobs.”

The most concerning fact is that for the second straight Labor Day, national unemployment remains well above 9 percent…

Several speakers at the recently concluded SCOPE West conference in Las Vegas made the same observations, noting that off-shoring would only become more attractive if U.S. manufacturers are not given more incentives for hiring. The U.S. Chamber of commerce has told SCMR that it, too, opposes legislation that will prevent small manufacturers from hiring again.

According to the “Labor Day 2010” report, manufacturing has the potential to produce long-term opportunities for U.S. workers more than any other sector of the economy.

“To the extent that there is a bright spot in the economy, it comes from manufacturing,” said Engler. “Production has risen since economic growth returned in the second half of last year, and manufacturers started hiring back some employees this year. We also saw a strong rebound in U.S. exports, which was very good news for manufacturers who account for nearly two-thirds of all U.S. exports.”

“We have had four consecutive quarters of economic growth, but much of the increase was temporary in nature,” said NAM Chief Economist David Huether. “More than half of the upturn in the economy over the past year was from business restocking inventories. Now, with inventory-to-sales ratios back to reasonable levels, this source of growth will likely fade.”

In looking at specific legislation, laws and regulations that could magnify the uncertainty that afflicts the economy – if poorly handled – the following could have a significant impact on American workers:

  • Expiration of the 2001 and 2003 tax cuts
  • The Environmental Protection Agency’s (EPA) proposed new regulatory regime to control greenhouse gas emissions and raise energy costs
  • Government implementation of the new health care law, with its numerous mandates on employers, insurers and consumers as well as a myriad of unintended consequences
  • Failure to achieve an ambitious trade agenda necessary to ensure and expand global market share for U.S exporters
  • Labor policies, such as the Employee Free Choice Act, that could rob the U.S. economy of its dynamic growth potential

In June 2010, the NAM released its “Manufacturing Strategy for Jobs and a Competitive America” to address fundamental challenges facing the U.S economy. The NAM’s “Labor Day 2010” report outlines these policies as a way to strengthen growth, employment and wages.


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Article Topics

News · Global · Inventory · Manufacturing · Economy · Trade · Labor · All topics

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. Contact Patrick Burnson


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