Statement on the Economy
If you’re going through hell, keep going.” –Winston Churchill Difficulties Mastered are Opportunities Won (also Churchill) Every day, we see the painful downward spiral of an economy that has been dominated for the last quarter of a century by an ethos of speculation and paper profits designed to maximize short-term return at the expense of the long-term health of our nation. In the current global financial crisis, we are feeling the effects of that economic vision in ways that threaten to completely destabilize the economy. Current headlines from Chicago to Iceland prove that we need a new direction for our economy, one which restores our country to a position of global economic leader, not global economic basket-case. We must rebuild what 25 years of failure has taken from us: a vibrant, healthy middle class that honors labor and creates real wealth while growing strong communities and helping to lift our fellow citizens out of poverty. We must rapidly implement new and innovative solutions to heal our environment rather than hasten its demise. With the election of President Barack Obama and the ratification of his message of change, Chicago has captured the attention and hopes of the world. But Chicago is also the birthplace of a successful recipe for socio-economic change that can fulfill those hopes in ways that are real and lasting. The emergence of the Chicago Manufacturing Renaissance Council (CMRC), along with its partnerships and programs, herald the arrival of one model that can be replicated in cities and communities throughout the country. This model is based a social partnership between business, labor, government, community, and educators united under a shared vision for a new productive economy based on advanced manufacturing. Why Advanced Manufacturing? The CMRC believes that the foundation of an economy as large and multifaceted as the United States’ must be advanced manufacturing: the production of complex, high-tech goods. Advanced manufacturing has the greatest potential for ensuring our long-term economic growth because it represents our society’s most dynamic intersection of science, technology, research, innovation, 1
entrepreneurial spirit and human talent. It is the incubator where new ideas for products and processes occur and where solutions to our environmental crisis will be found. Advanced manufacturing is the high road out of our current economic straits. Advanced manufacturing is a perhaps the most critical element of our economy because: • • It represents the highest possible fusion of public and private interest, generating real wealth for investors and owners while providing competitive wages and generous benefits for employees. Advanced manufacturing has the single greatest payroll out of all other industries. Nearly 13 million American are employed in manufacturing, earning an average wage of $58,000 a year including benefits.1 Manufacturing accounts for half of all exports from the United State--more than $600 billion a year.2 American manufacturing has moved beyond dreary assembly line work to a highly technological, team-oriented enterprise that requires a skilled workforce. The industry offers exciting career paths that lead into engineering, research, design, management, and even company ownership.
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As the global economy worsens, chasing short-term profits at the expense of our long-term national health is no longer an option. As we look towards the future, we see that societal investment in advanced manufacturing represents the single best strategy for long-term economic health because: • The economic multiplier of manufacturing is greater than for any other sector of the economy. For every new job in the manufacturing sector, three more are created in other sectors of the economy.3 Because it offers high wages and ample opportunities for career advancement, an expanded and modernized advanced manufacturing industry can build a strong middle class and open doors to the middle class for those in poverty;
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US Census Bureau. Annual Survey of Manufacturers, 2006. US Census Bureau. County Business Patterns, 2006. US Bureau of Economic Analysis. Regional Input Output Modeling System
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World leadership in the emerging industries of the future--renewable energy, nanotechnology, biotech, etc--require not only technological leadership, but also leadership in the advanced processes and capabilities necessary to build these technologies and foster innovation. Expanding advanced manufacturing is the surest way to cement our position in these areas. A Fork in the Road
The United States still enjoys a competitive advantage in advanced manufacturing because of past investments in infrastructure and education, but we are quickly falling behind. American advanced manufacturing faces acute challenges, and without swift and decisive national leadership, we will lose this vital sector of the economy to developing countries that have a competitive advantage in products that can be made by unskilled and low-cost labor--but not yet in the production of complex goods. In order to ensure the long-term vibrancy of advanced manufacturing, we as a society must invest in creating: • A world-class education system from preschool to grad school to ongoing, life-long skills training that meets the needs of a dynamic workplace, which would offer profound benefits to the young people of our society; A cutting-edge transportation, technology, and research infrastructure that serves the whole society; and Social partnerships that allow business, labor, government and educators to work together nationally and locally to ensure the success of this sector, create new opportunities and leverage resources.
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The Chicago Manufacturing Renaissance Council has been working to accomplish this on regional level. We are working to not only strengthen the manufacturing sector, but also to help build the leadership and vision to move an advanced manufacturing economy forward. Since 2005: • The Illinois Manufacturers’ Association, the Center for Labor and Community Research, the Chicago Federation of Labor, a number of departments in municipal government, the Chicago Urban League, the Chicago Jobs Council, Instituto del Progreso Latino, and others have formed an unlikely working partnership united under our mission to establish Chicago as the world leader in advanced manufacturing. The CMRC is already shaping policy and programs throughout the region; 3
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The CMRC has launched Austin Polytechnical Academy, an inner city public school specifically designed to train the next generation of leaders in advanced manufacturing. With the support of almost 50 local manufacturing companies, students will have access to paid internships and summer jobs in manufacturing. This is the school that President-elect Obama has highlighted as an innovative educational model that must be replicated nationally. This replication is already underway in Chicago, with the new Chicago Academy for Advanced Technology (CAAT) opening in the fall of 2009; Under the framework of the CMRC and in partnership with Instituto del Progreso Latino, the Mayor’s Office of Workforce Development has created ManufacturingWorks, a program that effectively links skilled Chicago workers with careers in local companies, boosting employees’ competitiveness, their pay rates, and their economic impact on the city; The CMRC has worked with the City Colleges of Chicago to bring their manufacturing programs to higher, industry-based standards, an effort reflected in their commitment to become fully accredited by the National Institute for Metalworking Skills. The CMRC is working with other community colleges in the region to set a high standard for post-secondary education and to provide the resources for schools to reach those standards; Anticipating a multi-billion dollar market linked to restoring our environment, the CMRC, in partnership with the Great Lakes Wind Project, is building the capacity of local manufacturing companies to become the supply chain for international wind turbine producers. Additionally the CMRC is seeking to create an industrial research park for renewable energy technology. These activities will help local advanced manufacturing companies grow and provide excellent jobs for the Chicago area as we address the environmental crisis. Repeating our Success
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Now is the moment to come together as a nation and build our future on a solid economic foundation of advanced manufacturing, restoring hope and confidence to our society. We can show the world, yet again, the vitality and power of the American economy as it leaves behind the low road policies and practices that have wreaked such havoc here and abroad. Accomplishing this mission requires a mutual commitment from government, business, labor and educators to build a partnership that recognizes the need for all stakeholders to be active in meeting the demands of the global economy. We must act now. Our economic survival depends on it. 4
Government: Government both locally and nationally must take a more activist and entrepreneurial stance in economic development in promoting and assisting the further expansion of advanced manufacturing. It can convene all the stakeholders in manufacturing and use its resources and policies to reward highroad businesses. In the current crisis, interventions in particular sectors should be part of an overall strategy to build our advanced manufacturing sector not a band aid for a sore that won’t heal, not narrow protectionism for a domestic company that made poor decisions. Business: Must embrace the High Road, the old fashion way of doing business, when companies where stewards, when what was good for GM really was what was good for the country, as well as recognize the importance of collaborating with labor—both organized and unorganized—to create an environment where business can excel and workers have career opportunities. In this environment, labor becomes a key source of innovation and strengthens our competitive advantage in the global economy. Business associations must recognize that support for advanced manufacturing and innovation is not solely the interest of owners and managers or a particular political party and must contribute to the building of broad and inclusive partnerships with new friends. Labor: When working at a company committed to the high road, labor must contribute to assisting the company to be even more competitive and efficient in the context of seeking legitimate improvement in compensation and working conditions. Organized labor must embrace an active role in helping to shape policy that is focused on wealth creation as well as wealth re-distribution. Like business, labor must become inclusive in building high road partnerships. Educators: In the knowledge economy, education is key. We must have a world class system at all levels. In turn, public and private support for education will increase. School administrators and leaders must embrace major change. Teachers’ unions can play a major leading role in the development of our productive capacity in promoting reform of our public schools. Advanced manufacturing is the path to end poverty which is the source of the greatest difficulties in many of our nation’s schools. Communities: Communities need to be active in promoting advanced manufacturing as part of their future, not something of the past. If we are to solve the problems of the environment, it must happen in production. Industrial developers will be the ones who create new processes and products that can sustain or even restore our environment…it won’t be lawyers. Poverty can be solved in the context of a robust advanced manufacturing economy not an economy that is based on retail, services, or real estate. Advanced manufacturing careers offer high wages and benefits—the kind that can truly provide security and a future for a family, for home ownership, for vacations, for a pension, and jobs that are truly interesting.
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Conclusion In this moment of difficulty, is an opportunity to embrace an economic development vision that embraces partnership and innovation—setting the stage for decades of sustainable development in our communities. It requires new thinking and boldness. It requires unlikely alliances. It’s within our reach as we have models in Chicago and throughout the country that have already suggested the power of such an approach. It really is up to us.
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