Make manufacturing great again? Easier said than done, and maybe not necessary in Iowa, experts say

DES MOINES - Citing massive job losses, Donald Trump during the 2016 campaign and since being elected president has pledged to make U.S. manufacturing great again by bringing back jobs that have moved out of the country.

Manufacturing in Iowa may not need the help, industry and economic development officials say.

Trump made restoring manufacturing jobs one of the staples of his campaign speeches, especially as he toured states such as Iowa, Wisconsin, Michigan, Ohio and Pennsylvania.

He continues to make that promise as president, including during a meeting last week at the White House with CEOs of some of the nation's largest manufacturing companies.

'My administration's policies and regulatory reform, tax reform, trade policies will return significant manufacturing jobs to our country,” Trump told the business leaders at the meeting, according to a White House transcript. 'Everything is going to be based on bringing our jobs back, the good jobs, the real jobs. They've left, and they're coming back. They have to come back.”

There were more than 12 million U.S. manufacturing jobs at the end of 2016, according to federal statistics. That's 5 million fewer than 2000 and 7 million fewer than the industry's peak in the late 1970s.

At its peak, manufacturing provided nearly 1 out of every 4 U.S. jobs; now it provides less than 1 in 10, according to federal figures.

That downward trend has occurred in Iowa as well. There were more than 254,000 manufacturing jobs in Iowa in the summer of 1999; by December of 2016, there were 48,000 fewer manufacturing jobs in the state, according to state figures.

Still, manufacturing remains important to Iowa's economy. The sector in 2014 contributed $31.2 billion to the state's economy and nearly one-fifth of the state's Gross Domestic Product, according to a 2016 report by Iowa State University's Center for Industrial Research.

Although manufacturing jobs again have been dropping since the summer of 2014 following a brief, post-recession rebound, state industry and economic development officials say Iowa manufacturers have been doing well in 2016 and 2017.

'We're in a pretty good spot with manufacturing in Iowa,” said Mike Ralston, president of the Iowa Association of Business and Industry.

Ralston said manufacturing members of his organization say 2016 ended on a positive note and 2017 looks even better, with a possible exception for manufacturers that are tied to a sluggish agricultural economy. For others, orders are up and inventory is down, and that's a good thing, Ralston said.

'That means they have to go back to work manufacturing stuff,” Ralston said.

Market is healthy

Economic development officials across the state were similarly bullish on the state of manufacturing in Iowa.

'It's been very positive with all our local (manufacturers). We've seen and are working with several of them on some expansion projects,” said Chad Schreck, president and CEO of the North Iowa Economic Development Corp. Some of the area's top manufacturers include Winnebago, Curries, Graham, Serta and Kraft Heinz. 'By and large, our groups have been really strong and growing.”

Manufacturing is similarly healthy in the Quad-Cities, said Liz Murray Tallman, chief economic development officer for the Chamber of Commerce that represents an area that includes manufacturers such as John Deere, Alcoa and 3M and recently was chosen for new plants by Kraft Heinz and Sterilite.

Kraft Heinz is relocating its Davenport facility; its new plant calls for 475 jobs to be retained, while its old plant employed 1,200.

Tallman said Quad-Cities manufacturers have adapted to meet the industry's challenges.

'What we're actually seeing is a lot of growth in manufacturing, and it's pretty incredible,” Murray Tallman said. 'And a lot of it, I think, is because of the technology and retooling of traditional manufacturing and looking at more opportunities for technology within their manufacturing.”

Little effect

If Trump or other elected officials wish to help manufacturers create more job opportunities, the best ways are through tax and regulation relief and education and training programs to prepare workers. And local governments can create communities that are attractive to businesses and potential workers, industry and economic development officials said.

But economists and other experts are skeptical government - from the president to city councils - can have much of an impact on manufacturing employment, in part because of the complexities of the manufacturing economy, both in the U.S. and worldwide.

Campaign promises, no matter who makes them, seldom are likely to impact manufacturing jobs, experts said.

'Things from the far left and the far right might sound good, but the reality is the world and the economy are complex. You can't just have magic happen,” said Ron Cox, the director of Iowa State University's Center for Industrial Research and Service and an associate dean in the university's engineering school. 'I like to say if it was so simple, people would have done it before.”

Cox said any policies that affect manufacturing in one positive way also may have negative effects. For example, Cox said, a trade policy may bring back jobs to the U.S. but may, in turn, increase the cost of imported goods.

'There is no one silver bullet that's going to dramatically change things,” Cox said.

Political limits

David Swenson, an economist at Iowa State University, said he thinks there are limits to the influence the Trump administration and Congress can have on U.S. manufacturing, even via renegotiated trade deals.

'Trump and many restricted-trade advocates treat the issue in a simplistic binary fashion - U.S.-made or not. U.S. jobs or not. But production is much more complicated than that,” Swenson said in an interview conducted over email. 'Automobiles assembled in Mexico link very strongly to U.S., European, and Asian parts suppliers as well as Mexican parts suppliers. Their U.S. content is nebulous. A U.S. made automobile transmission might contain parts from several countries, for example.”

Swenson said tax reform proposed by congressional Republicans may encourage manufacturers to increase the amount of U.S. content in their manufactured goods and produce more exports. However, Swenson said, there is no guarantee that will yield long-term job increases, and the net effect could be that the value of the dollar will rise to offset any changes and any tax on imports would be minimized because the imports would be cheaper because of the higher dollar.

'And round and round we go,” Swenson said.

Cox said the conversation should not necessarily be about bringing back manufacturing jobs but connecting U.S. workers with better, higher-paying manufacturing jobs. He said that with Iowa's stagnant population, adding manufacturing jobs may just shift workers from one company to another.

'I'm not really in favor of having a jobs conversation,” Cox said. 'I'd rather have the conversation in Iowa, where the population is pretty flat, about higher-quality jobs.”