It's not too late to stop the bleeding

The Midwest has lost more than 1.2 million manufacturing jobs since the year 2000, according to Workforce Development figures.

That bloodletting has hit Iowa's rural communities especially hard.

Last month's Pella Corp. announcement that the company would be laying off 198 workers - including people at its plants in Carroll, Sioux Center, Shenandoah and Pella - is just one recent reminder that despite more than a decade of losses, and despite some notable successes (especially in green energy), we haven't found a way to truly stop the bleeding.

But that's no reason to throw up our hands and give up on this vital sector; one we still can stimulate if we're smart about it.

According to a 2011 Structural Cost Study conducted by the Manufacturing Institute, a Washington, D.C.-based think tank affiliated with the National Association of Manufacturers, raw production costs are actually cheaper now in the United States than they are in the countries that represent our nine largest trading partners.

It's our significantly heavier corporate tax burden and the cost of employee benefits that throws total U.S. manufacturing costs up nearly 10 percent over those of those nine other countries.

The problem is getting worse, according to the institute's annual study. Or, as former Pennsylvania Sen. Rick Santorum put it when he met with our editorial board members Tuesday: “We're being handed our lunch.”

Republican presidential hopefuls have been stumping for months about the aid they'd minister to the ailing sector.

When Minnesota Congresswoman Michele Bachmann visited with us last week, she called for the election's favored cure: a mix of tax breaks, regulatory reform and repeal of recent health care and financial reforms.

Santorum, no fan of ObamaCare, proposed an even more elegant cure: He'd eliminate the corporate income tax for manufacturers to keep plants here and woo them home from overseas.

It's a simple solution, but not altogether simplistic: According to the Manufacturing Institute, tax disadvantages are the single largest factor in our manufacturing non-competitiveness.

They say even taking into account favorable depreciation schedules and deductions, taxes collected on new business investments remain among the highest in the world.

Zeroing out that tax for manufacturers might even be enough to even out the playing field for America's manufacturers.

It's one campaign-trail trial balloon that deserves a closer look.

Comments: (319) 339-3154; jennifer.hemmingsen@sourcemedia.net