Since the end of 2007, 1.4 million waiter and bartender jobs have been added to the national economy, while 1.4 million manufacturing jobs have been lost.
This is just another example of how digging past the surface level economic indicators like the low unemployment rate and high stock market levels unearths a completely different economic picture.
Manufacturing, which comprises 12.1 percent of gross domestic product and provides millions of good jobs, appears to be in a recession. Key indicators like the Empire State manufacturing index and ISM index are at lows that collectively point to the worst manufacturing climate since March 2009. Recent job reports show monthly shedding of tens of thousands of manufacturing jobs lost and a significant decline in the average length of the workweek.
The $150 billion aluminum industry, which supports 670,000 jobs in the U.S., is also at lows not seen since the Great Recession. The industrial company Caterpillar, considered a bellweather for industrial performance, has just posted its 35th straight month of sales decline, even longer than during the Great Recession.
On a recent conference call with investors, Dan Florness, the CEO of Fastenal, an industrial supplies and manufacturing company, said, “The industrial environment is in a recession — I don’t care what anybody says, because nobody knows that market better than we do.”
Part of this manufacturing recession is due to the regulatory and tax burdens that job creators in this sector face. A report by NERA Consulting finds that the regulatory burden on manufacturers has more than doubled over 10 years. And the nation’s 35 percent corporate tax rate, the highest in the industrialized world, hits domestic manufacturers particularly hard because they are being punished for not moving their factories oversees.
When discussing the state of the economy, policymakers should confront the climate that is actually facing job creators and be aware that each regulation and tax they pass negatively affects the hard working taxpayers who depend on manufacturing employment.
Alfredo Ortiz is President and CEO of Job Creators Network