SLOW GAINS

Rollback of corporate income taxes needed to recover manufacturing jobs lost during recession, analysts say.

WASHINGTON — President Barack Obama loves to talk about bringing manufacturing jobs back home.

“Our first priority is making America a magnet for new jobs and manufacturing,” Obama declared.

But the question is whether both political parties can make it happen. So far, the nation’s lawmakers have largely been AWOL.

Business leaders, consultants and most economists say the United States must slash the corporate tax rate to start recovering lost industrial jobs.

America’s 35 percent rate — highest in the industrial world — puts the United States middle-ofthe-pack among other nations after deductions and tax breaks are factored in.

U.S. manufacturers have enjoyed a nice bounce since the end of the recession, adding nearly a half-million jobs. The industry now employs almost 12 million workers and is increasing employment for the first time since the mid-1990s.

Yet those gains pale in comparison to the nearly 6 million U.S. jobs that vanished from 2000 to 2010, when manufacturing employment shrank to 11.4 million from 17.3 million. Many of those jobs ended up in China or other lowcost countries.

Can some or all of those jobs return? Right now the evidence is thin. Most manufacturing jobs created in the past three years are the result of a recovering economy. Companies that slashed payrolls in the Great Recession have been beefing up to handle rising demand.

At the same time, reams of anecdotal evidence suggest employment in the manufacturing sector is getting a boost from U.S. companies returning operations back home. And foreign firms increasingly see America as a good place to establish deeper roots.

The hard proof, however, is lacking.

“Unfortunately there’s not a lot of hard numbers,” said chief economist Chad

Moutray of the National Association of Manufacturers.

The Reshoring Initiative, an organization that encourages U.S. businesses to return manufacturing back home, estimates 50,000 manufacturing jobs have returned to the U.S. in the last three years.

If so, that would account for a solid 10 percent of the manufacturing jobs created since 2010.

Henry Moser, Reshoring Initiative founder, came up with the estimate by tallying the numbers from news reports of companies returning jobs to America and extrapolating from the data. Yet he admits he doesn’t know how many jobs have left the U.S. during the same span.

So what will take to turn the trickle of in-shoring into a flood? A lower tax rate would reduce the advantage held by foreign rivals.

Moutray of the National Association of Manufacturers said U.S. manufacturing costs are about 20 percent higher compared to the nation’s biggest trading partners.

“Washington can create an environment to make the industry more robust,” concurred Karen Kurek, who heads the manufacturing practice at Chicagobased McGladrey, a global business-consulting firm. “President Obama has to take a hard look at taxes.”

However, Democrats and Republicans have been talking about reforming the tax code for two years with nothing to show. Getting less in taxes from corporations means taking more from someone else.

Industry insiders also say the government has to get smarter about regulation, push for more freetrade deals and improve math and science skills of U.S. students so they can fill open manufacturing slots. Companies frequently complain they can’t find enough skilled workers.

Moser of the Reshoring Institute says education should be a huge part of the discussion.

“Kids think manufacturing is dead,” he said. “We need more people to become machinists and technicians. Everybody thinks they need to go to college.”

AllianceBernstein economist Joseph Carson lists several reasons America is a much better place for manufacturers compared to a decade ago. The cost of labor, logistics and key raw materials such as natural gas have fallen. U.S. workers are the most productive in the world. The quality of craftsmanship is unparalleled. Manufacturers that remained stateside have been forced to become incredibly innovative to stay competitive globally.

Perhaps just as significant, experts note, wages in China and other far-away countries have surged in the past decade to narrow the gap with U. S. workers. Costs to ship goods back to the U.S. from China, especially bulky items, are another formidable expense.

“There are a lot of posi- tive trends in place, but it may take a while to show,” Carson said. Whether lawmakers cement those trends in place remains to be seen. The White House has pushed small initiatives such as worker retraining and matching manufacturers with skilled employees — goals applauded by industry.

Yet excessive regulation, industry people say, and higher tax rates hurt midsize firms whose owners file as individual taxpayers.

“The U.S. is really at a crossroads right now,” Kurek said.