[House Hearing, 115 Congress] [From the U.S. Government Publishing Office] BUILT IN AMERICA: JOBS AND GROWTH IN THE MANUFACTURING SECTOR ======================================================================= HEARING BEFORE THE SUBCOMMITTEE ON DIGITAL COMMERCE AND CONSUMER PROTECTION OF THE COMMITTEE ON ENERGY AND COMMERCE HOUSE OF REPRESENTATIVES ONE HUNDRED FIFTEENTH CONGRESS SECOND SESSION __________ SEPTEMBER 26, 2018 __________ Serial No. 115-167 [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] Printed for the use of the Committee on Energy and Commerce energycommerce.house.gov __________ U.S. GOVERNMENT PUBLISHING OFFICE 36-617 WASHINGTON : 2019 -------------------------------------------------------------------------------------- For sale by the Superintendent of Documents, U.S. Government Publishing Office, http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, U.S. Government Publishing Office. Phone 202-512-1800, or 866-512-1800 (toll-free). E-mail, [email protected]. COMMITTEE ON ENERGY AND COMMERCE GREG WALDEN, Oregon Chairman JOE BARTON, Texas FRANK PALLONE, Jr., New Jersey Vice Chairman Ranking Member FRED UPTON, Michigan BOBBY L. RUSH, Illinois JOHN SHIMKUS, Illinois ANNA G. ESHOO, California MICHAEL C. BURGESS, Texas ELIOT L. ENGEL, New York MARSHA BLACKBURN, Tennessee GENE GREEN, Texas STEVE SCALISE, Louisiana DIANA DeGETTE, Colorado ROBERT E. LATTA, Ohio MICHAEL F. DOYLE, Pennsylvania CATHY McMORRIS RODGERS, Washington JANICE D. SCHAKOWSKY, Illinois GREGG HARPER, Mississippi G.K. BUTTERFIELD, North Carolina LEONARD LANCE, New Jersey DORIS O. MATSUI, California BRETT GUTHRIE, Kentucky KATHY CASTOR, Florida PETE OLSON, Texas JOHN P. SARBANES, Maryland DAVID B. McKINLEY, West Virginia JERRY McNERNEY, California ADAM KINZINGER, Illinois PETER WELCH, Vermont H. MORGAN GRIFFITH, Virginia BEN RAY LUJAN, New Mexico GUS M. BILIRAKIS, Florida PAUL TONKO, New York BILL JOHNSON, Ohio YVETTE D. CLARKE, New York BILLY LONG, Missouri DAVID LOEBSACK, Iowa LARRY BUCSHON, Indiana KURT SCHRADER, Oregon BILL FLORES, Texas JOSEPH P. KENNEDY, III, SUSAN W. BROOKS, Indiana Massachusetts MARKWAYNE MULLIN, Oklahoma TONY CARDENAS, California RICHARD HUDSON, North Carolina RAUL RUIZ, California CHRIS COLLINS, New York SCOTT H. PETERS, California KEVIN CRAMER, North Dakota DEBBIE DINGELL, Michigan TIM WALBERG, Michigan MIMI WALTERS, California RYAN A. COSTELLO, Pennsylvania EARL L. ``BUDDY'' CARTER, Georgia JEFF DUNCAN, South Carolina Subcommittee on Digital Commerce and Consumer Protection ROBERT E. LATTA, Ohio Chairman GREGG HARPER, Mississippi JANICE D. SCHAKOWSKY, Illinois Vice Chairman Ranking Member FRED UPTON, Michigan BEN RAY LUJAN, New Mexico MICHAEL C. BURGESS, Texas YVETTE D. CLARKE, New York LEONARD LANCE, New Jersey TONY CARDENAS, California BRETT GUTHRIE, Kentucky DEBBIE DINGELL, Michigan DAVID B. McKINLEY, West Virgina DORIS O. MATSUI, California ADAM KINZINGER, Illinois PETER WELCH, Vermont GUS M. BILIRAKIS, Florida JOSEPH P. KENNEDY, III, LARRY BUCSHON, Indiana Massachusetts MARKWAYNE MULLIN, Oklahoma GENE GREEN, Texas MIMI WALTERS, California FRANK PALLONE, Jr., New Jersey (ex RYAN A. COSTELLO, Pennsylvania officio) JEFF DUNCAN, South Carolina GREG WALDEN, Oregon (ex officio) C O N T E N T S ---------- Page Hon. Robert E. Latta, a Representative in Congress from the State of Ohio, opening statement..................................... 1 Prepared statement........................................... 3 Hon. Frank Pallone, Jr., a Representative in Congress from the State of New Jersey, opening statement......................... 4 Hon. Greg Walden, a Representative in Congress from the State of Oregon, opening statement...................................... 6 Prepared statement........................................... 7 Hon. Janice D. Schakowsky, a Representative in Congress from the State of Illinois, prepared statement.......................... 8 Witnesses Nikki Moyers, Vice President, Operations, Jerl Machine, Inc...... 10 Prepared statement........................................... 12 Edward Paradowski, President, Apache Stainless Equipment Corporation.................................................... 18 Prepared statement........................................... 20 Andrew Stettner, Senior Fellow, Century Foundation............... 26 Prepared statement........................................... 28 Eric Anderberg, Vice President, Dial Machine, Inc................ 35 Prepared statement........................................... 37 Submitted material Blog entitled, ``How do we know the tax cut isn't working to boost wages? Investment, investment, investment,'' Economic Policy Institute, August 3, 2018............................... 73 Report entitled, ``A Federal Agenda for Revitalizing America's Manufacturing Communities,'' Andrew Stettner and Joel S. Yudken 78 BUILT IN AMERICA: JOBS AND GROWTH IN THE MANUFACTURING SECTOR ---------- WEDNESDAY, SEPTEMBER 26, 2018 House of Representatives, Subcommittee on Digital Commerce and Consumer Protection, Committee on Energy and Commerce, Washington, DC. The subcommittee met, pursuant to call, at 10:00 a.m., in room 2123 Rayburn House Office Building, Hon. Robert Latta (chairman of the subcommittee) presiding. Members present: Representatives Latta, Kinzinger, Burgess, Lance, Guthrie, McKinley, Bilirakis, Bucshon, Mullin, Costello, Duncan, Walden (ex officio), Schakowsky, Cardenas, Welch, Kennedy, Green, and Pallone (ex officio). Staff present: Melissa Froelich, Chief Counsel, Digital Commerce and Consumer Protection; Ali Fulling, Legislative Clerk, Oversight and Investigations, Digital Commerce and Consumer Protection; Elena Hernandez, Press Secretary; Paul Jackson, Professional Staff, Digital Commerce and Consumer Protection; Bijan Koohmaraie, Counsel, Digital Commerce and Consumer Protection; Tim Kurth, Senior Professional Staff, Communications and Technology; Austin Stonebraker, Press Assistant; Madeline Vey, Policy Coordinator, Digital Commerce and Consumer Protection; Greg Zerzan, Counsel, Digital Commerce and Consumer Protection; Michelle Ash, Minority Chief Counsel, Digital Commerce and Consumer Protection; Lisa Goldman, Minority Counsel; Tiffany Guarascio, Minority Deputy Staff Director and Chief Health Advisor; Carolyn Hann, Minority FTC Detailee; Caroline Paris-Behr, Minority Policy Analyst; Andrew Souvall, Minority Director of Communications, Outreach and Member Services; and C.J. Young, Minority Press Secretary. OPENING STATEMENT OF HON. ROBERT E. LATTA, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OHIO Mr. Latta [presiding]. Good morning. I would like to call the Subcommittee on Digital Commerce and Consumer Protection to order this morning. At this time I recognize myself for 5 minutes for an opening statement. Good morning again. I would like to welcome everyone to today's Digital Commerce and Consumer Protection Subcommittee examination of the state of manufacturing in America. Thanks to policies designed to spur manufacturing in our country, we are seeing a revival of the Made in America brand. Factories are expanding, workers are being hired and rehired, and wages are rising. A recent survey of small business owners found optimism at an all-time high. Small businesses are responsible for creating two out of three new jobs. So, when they are raising wages, growing their businesses, and investing in equipment, it is helpful to the entire economy. In my own congressional district, the 5th District of Ohio, we are definitely seeing a resurgence of optimism. My district stretches from densely populated urban centers like downtown Toledo to small villages on the state line of Indiana, and we probably have over 60,000 manufacturing jobs. In the over 900- plus district meetings I have had since August of 2012, overregulation is one of the most mentioned issues. I never hear that regulation isn't necessary, but I always hear people ask for regulations they can live with and comply with. It is burdensome for businesses to navigate regulatory regimes when they are busy improving operations and products for customers or working to grow to reach more people. Through policies this Congress and the administration advanced, we are witnessing the rebirth of a healthy, strong, and growing manufacturing sector. This includes one of our witnesses today who comes to us representing Jerl Machine, Inc., from Perrysburg. Welcome. And again, we thank you all for being with us today. I look forward to the hearing and hearing from you all. According to the Congressional Research Service, the U.S. is the world's second largest manufacturing nation, having been overtaken by China in 2010. But the competition to regain the crown is very much alive. In recent years, American manufacturing output has risen steadily, this year reaching its highest level in nearly 10 years. Growing production also means growing jobs. Since 2017, over 350,000 manufacturing jobs have been created in America. This is a sharp reversal over the previous 2 years when the Bureau of Labor Statistics was regularly reporting job losses. The increasing demand for workers is creating new opportunities across our country. Importantly, for the first time in a long time, prosperity and opportunity are reaching into rural areas that have long been left out of the recovery. As a recent report by Brookings Institute notes, the growth of the employment rate in small and rural communities has outpaced that of large cities and other larger metropolitan areas. A large part of the success is due to the return of manufacturing jobs. Restoring America's manufacturing sector has been a priority of this Congress. Tax reform focused on lowering the burdens for employers which they face in order to spur production and job creation has helped fuel the manufacturing boom. Perhaps that is why the National Association of Manufacturers' Outlook Survey reports an all-time high in manufacturer optimism for the second quarter of this year. They also reported record or near-record highs when it came to their expectations about hiring workers, raising wages, and making investments. Our manufacturers know that opportunity is greater now than it has been in many years. Again, I look forward to hearing more about these trends from our witnesses, as well as any ideas you have for how policymakers can help remove barriers and further promote manufacturing in America. We are grateful for the time that you are here with us today, and we appreciate your testimony. At this time, I would like to recognize the vice chairman of the subcommittee, the gentleman from Illinois. Mr. Kinzinger. Thank you, Mr. Chairman, for yielding. And I thank all of you for being here today. I especially want to welcome Mr. Anderberg. He is my constituent. He is the vice president and co-owner of Dial Machine, which is a great American manufacturing company located in Rockford, Illinois. Mr. Anderberg helps run this family-owned business that has been around for more than a half a century. He has a wealth of experience in the industry and is a student of the history of manufacturing and trade. It is not his first rodeo, either. He was here back in 2003 in front of the Small Business Committee talking about the state of manufacturing then. Mr. Anderberg, thank you for making the trip to Washington to give us all your unique perspective on the manufacturing sector. It is definitely an honor to represent you in Congress. With that, Mr. Chairman, I yield back. [The prepared statement of Mr. Latta follows:] Prepared statement of Hon. Robert E. Latta Good morning, I'd like to welcome everyone to the Digital Commerce and Consumer Protection Subcommittee's examination of the State of Manufacturing in America. Thanks to policies designed to spur manufacturing in our country we are seeing a revival of the Made in America brand. Factories are expanding, workers are being re-hired and wages are rising. A recent survey of small business owners found optimism at an all-time high. Small businesses are responsible for creating 2 out of every 3 new jobs so when they are raising wages, growing their businesses, and investing in equipment, it's helpful to the entire economy \1\. --------------------------------------------------------------------------- \1\ https://www.cnbc.com/2018/09/11/small-business-optimism-surges- to-highest-ever.html --------------------------------------------------------------------------- In my own congressional district, the 5th District of Ohio, we are definitely seeing a resurgence of optimism. My district stretches from densely populated urban centers like downtown Toledo to small villages on the state-line of Indiana and we proudly have over 60,000 manufacturing jobs. In the over 900 district meetings I've had since August 2012, overregulation is the most mentioned issue. I never hear that regulation isn't necessary, but I always hear people ask for soft- touch, minimal regulation. It is burdensome for businesses to navigate regulatory regimes when they are busy improving operations and products for customers or working to grow to reach more people. Through policies this Congress and Administration have advanced, we are witnessing the rebirth of a healthy, strong and growing manufacturing sector. This includes one of our witnesses today, who comes to us representing Jerl Marchine Inc. from Perrysburg. Welcome Ms. Moyers, and thank you very much for joining us today, I look forward to hearing from you and our other witnesses today. According to the Congressional Research Service, the U.S. is the world's second-largest manufacturing nation, having been over-taken by China in 2010. But the competition to regain the crown is very much alive. In recent years American manufacturing output has risen steadily, this year reaching its highest level in nearly 10 years. Growing production also means growing jobs. Since January 2017, over 350,000 manufacturing jobs have been created in America; this is a sharp reversal over the previous two years, when the Bureau of Labor Statistics was regularly reporting job losses. The increasing demand for workers is creating new opportunities across our country. Importantly, for the first time in a long time prosperity and opportunity are reaching into rural areas that have long been left-out of recovery. As a recent report by the Brookings Institute notes, the growth of the employment rate in small and rural communities has outpaced that of big cities and other larger metro areas. A large part of this success is due to the return of manufacturing jobs. Restoring America's manufacturing sector has been a priority of this Congress. Tax reform, focused on lowering the burdens employers face in order to spur production and job creation, has helped fuel the manufacturing boom. Perhaps that's why the National Association of Manufacturer's Outlook Survey reported an all-time high in manufacturer optimism for the second quarter of this year. They also reported record or near record highs when it came to their expectations about hiring workers, raising wages and making investments. Our manufacturers know that opportunity is greater now than it has been in many years. I look forward to hearing more about these trends from our witnesses, as well as any ideas you have for how policymakers can remove barriers and further promote manufacturing in America. We are grateful for your time today and appreciate your testimony. Mr. Latta. Thank you very much. The gentleman yields back. And I will yield back the balance of my time, and at this time I will recognize the gentleman from New Jersey for an opening statement. OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY Mr. Pallone. Thank you, Mr. Chairman. A strong manufacturing sector is vital to our identity as a nation, is the source of countless scientific and technological breakthroughs, and it is essential to maintaining our national defense capabilities. Manufacturing serves as an important building block for a strong and stable middle class in this country. Manufacturing jobs have historically paid more on average than jobs in other sectors, and they tend to bring with them strong spillover effects for local and regional economies. In my home State of New Jersey, we have nearly 10,000 manufacturers from large pharmaceutical firms to small machine shops, and these manufacturers employ almost 250,000 people and contribute more than $30.1 billion to New Jersey's economy. And I am pleased we are holding a hearing on the state of U.S. manufacturing. Our communities are stronger when we can develop well-paying and stable jobs. But the Republican majority for two years now has repeatedly prioritized the needs of large corporate interests and the wealthiest few. The American people have not been fooled by Republicans' claims about their giant tax scam. The American people know that the benefits of the tax law overwhelmingly go to the wealthiest few. And congressional Republicans also continue to push harmful regulatory rollbacks that undermine innovation and job growth. Despite all the evidence to the contrary, Republicans are likely to tout the successes of their tax scam today. Yet, repeatedly, we have seen that most companies have not and do not intend to use the money for capital investment. In fact, we remember all too well watching President Trump's former lead economic advisor Gary Cohn's distress when a group of CEOs were asked if they intended to increase their investments when the tax cuts become law, and almost none of them raised their hands. Gary Cohn sent shockwaves asking, and I quote, ``Why aren't the other hands up?'' Their hands did not go up because they intended for most profits from the tax cuts to go to shareholders, and that is exactly what has happened. Contrary to the majority's claims, deregulation has also caused substantial uncertainty and angst for manufacturers. For example, eight years ago the CAFE standards were put into place to increase fuel economy for cars and light-duty trucks by model year 2025. U.S. manufacturers and their suppliers innovated and invested in advanced technologies. CAFE provided certainty to these firms, allowing them to invest in a pipeline of jobs for the long term. And all of that investment and innovation was upended in August when the Trump administration announced a proposal to roll back CAFE. This announcement threw into disarray well-laid plans for innovation and job growth. The Trump administration's efforts to dismantle the Clean Power Act have also created even more uncertainty for the manufacturing sector. And this administration's efforts to abuse emergency authorities to subsidize the coal and nuclear industries threaten to hurt national gas-fired electricity producers and the renewables industry while raising costs for U.S. manufacturers at the same time. So, what American manufacturers need is for the federal government to prepare and implement a coordinated long-term strategy for manufacturing success and job growth. Our key competitors have figured this out already. Since 2015, the Chinese government has invested billions of dollars into the Made in China 2025 campaign, which is their 10-year plan for transforming their economy from commodities to advanced manufacturing. And the Obama administration recognized this need and established the National Network for Manufacturing Innovation, now known as Manufacturing USA. This is a network of industry, academic, and government partners working to increase U.S. manufacturing competitiveness and spur innovation. To date, this network has 14 institutes specializing in a variety of advanced manufacturing sectors such as advanced robotics and lightweight metals. The plan was to open three times as many institutes, and I encourage the current administration to follow through with this initiative. It's time to stop making manufacturing policy on a whim and, instead, to think strategically about the future needs of this country. Mr. Chairman, American manufacturing also needs companies to step up and invest, and not just in their plants, but in their workers as well. Too often, good manufacturing jobs become part-time jobs without benefits, and workers are increasing losing their power to negotiate for better conditions and higher wages. So, the federal government needs the industry to be a partner in creating a vibrant manufacturing economy. And I hope this hearing can explore that partnership. So, I yield back. Thank you, Mr. Chairman. Mr. Latta. Thank you very much. The gentleman yields back. And the Chair now will recognize the chairman of the full Committee of Energy and Commerce, the gentleman from Oregon, for 5 minutes. OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OREGON Mr. Walden. Thank you very much, Mr. Chairman. I appreciate your leadership on this issue and the hearing that we are having today. As our witnesses will know, we have got a couple of these going on today. So, some of us will have to bounce back and forth. I would just say at the beginning, I am glad to stack the Trump economy up against the Obama economy any day of the week. We actually have provided, as a result of Republican majorities, the biggest tax relief since Ronald Reagan. We have had significant regulatory relief, taking the dead hand of overexcessive government regulation off the throats of America's entrepreneurs, and they have responded at record pace to create jobs in America, and to give us the best economy nearly anybody in the working world has seen in their time. And so, optimism is up. Jobs are up. There are more openings than there are people to fill them, and we are moving forward with a robust economy. And this notion from the last President that we should get used to a 1.5 or 2 percent GDP, and that is the new normal, the best America could do, is just garbage. And so, we are seeing it move forward at 4.2 percent GDP growth, and a very, very strong economy, and it is because of the Republican policies we have passed out of this committee and others, and down to the President for signature. But today we are going to hear about manufacturing. It is essential and it is coming back in America. From car parts to industrial equipment, to semiconductors, America's manufacturing sector keeps us on the cutting edge of technology and world leadership. Thanks to historic achievements in tax and regulatory reform, our country is undergoing a manufacturing revival unlike we have seen in a very long time. The latest manufacturing index from the Institute for Supply Management has reached its highest level in 14 years. This number translates into surging growth and increased production of goods made in America. With the resurgence comes the return of manufacturing jobs. And in fact, The Washington Post recently reported, and I quote, ``Jobs in goods-producing industries, mining, construction, and manufacturing, grew 3.3 percent in the year preceding July, the best rate since 1984.'' And with this increase in manufacturing jobs has come rising wages. According to the August Bureau of Labor Statistics quarterly release, compensation for workers has risen to a nearly 10-year high. These are the facts. The latest GDP report shows that our economy has grown at a rate of 4.2 percent, and we anticipate this week's GDP report will show similarly strong results. Further, earlier this month, the National Federation of Independent Business--and my wife and I were small business owners for 21 years--it reported that its small business optimism index has surged to 108.8 percent, the highest level ever recorded in the survey's 45- year history. These are the facts. Of course, all these numbers can seem abstract, but what they represent is not. Our economy is strong and growing. This surge of American manufacturing has come from business, both large and small. Jobs are being created. New products, technologies, and medicines are being invented. And consumers have more money in their pockets to spend, to put away for their children's education, or save toward retirement. Workers are once again able to find solid, dependable jobs with good pay. And it is all the result of this Congress, the Republican Congress, investing in America by reducing the burdens and taxes and unnecessary regulations imposed on job creators. You know America has always been a nation of doers and makers. It has always been a place where anyone with dedication and ambition can start their own enterprise and take the future into their own hands. By any measure, we are witnessing a reinvigoration of that great and proud tradition as Americans. So, I am proud of this committee's work. Most of it has actually been bipartisan. And we are getting pro-growth, pro- innovation policies and we are helping our entrepreneurs do what they do best. That includes we really appreciate our witnesses here today. Thank you all for the help you are doing to grow jobs in America. We know there is a lot more work to be done. We know there are unsettled parts and challenges in the economy. But we are here to be your partner, to help American workers succeed and American businesses grow, and manufacturing get even stronger. So, with that, Mr. Chairman, I yield back the balance of my time. [The prepared statement of Mr. Walden follows:] Prepared statement of Hon. Greg Walden Good morning and thank you to our witnesses for appearing before us today to discuss the state of a quintessential American industry: manufacturing. From car parts, to industrial equipment, to semiconductors, America's manufacturing sector keeps us on the cutting edge of technology and world leadership. Thanks to historic achievements in tax and regulatory reform, our country is undergoing a manufacturing revival unlike any we've seen in a long time. The latest manufacturing index from the Institute for Supply Management has reached its highest level in 14 years. This number translates to surging growth and increased production of goods made in America. With this resurgence comes the return of manufacturing jobs. The Washington Post recently reported, ``Jobs in goods- producing industries--mining, construction and manufacturing-- grew 3.3 percent in the year preceding July, the best rate since 1984. . .'' \1\ --------------------------------------------------------------------------- \1\ ''Under Trump, the jobs boom has finally reached blue-collar workers. Will it last?'' (September 9, 2018)https:// www.washingtonpost.com/business/2018/09/09/under-trump-jobs-boom-has- finally-reached-blue-collar-workers-will-it-last/?noredirect=on&utm-- term=.9c7b28e2a87f --------------------------------------------------------------------------- And with this increase in manufacturing jobs has come rising wages. According to the August Bureau of Labor Statistics quarterly release, compensation for workers has risen to a nearly 10-year high. The latest U.S. GDP report shows that our economy has grown at a rate of 4.2 percent, and we anticipate this week's GDP report will show similarly strong results. And further, earlier this month, the National Federation of Independent Business reported that its ``Small Business Optimism Index'' had surged to 108.8 percent, the highest level ever recorded in the survey's 45-year history. Of course, all these numbers can seem abstract, but what they represent is not. Oureconomy is strong and growing. This surge of American manufacturing has come from businesses both large and small. Jobs are being created. New products, technologies, and medicines are being invented. Consumers have more money in their pockets to spend, to put away for their children's education, or save towards retirement. Workers are once again able to find solid, dependable jobs with good pay. And it is all the result of this Congress investing in America by reducing the burdens that taxes and unnecessary regulations impose on job creators. America has always been a nation of doers and makers. It has always been a place where anyone with dedication and ambition can start their own enterprise and take the future into their own hands. By any measure we are witnessing a reinvigoration of that proud tradition. I am proud that this committee's dedication to pro-growth, pro-innovation policies has contributed to this moment. I am even more proud of America's workers and business leaders. That includes our witnesses for today's hearing. Thank you for all you do to help create jobs and keep America a place where we make things that improve lives and change the world. Please let us know what we in Congress should do to continue supporting American manufacturing and the remarkable economic growth we see today. It's our job to make it easier for you to succeed. Thank you and I yield back the balance of my time. Mr. Latta. Thank you very much. The gentleman yields back the balance of his time. The Chair now recognizes the ranking member of the subcommittee, the gentlelady from Illinois, for 5 minutes. OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS Ms. Schakowsky. Thank you, Mr. Chairman, and I apologize to you, to our witnesses, and my colleagues for being late. I want to thank you, and Mr. Stettner, Mr. Paradowski, Ms. Moyers, and Mr. Anderberg for being here today. Manufacturing helped build the American middle class. Strong wages helped build products that Americans were proud of. And unfortunately, too many misguided policies over the last 30 years have allowed our manufacturing sector to slowly whither away. I am pleased to see that my colleagues invited as witnesses executives from businesses that used the most recent Republican tax cut to invest in their businesses by increasing wages and better training for their workers. However, closer examination of macro-level data, a very different story than the one that we will be told today can be heard. I would like to submit for the record this blog by Josh Bivens from the Economic Policy Institute for the record. I ask unanimous consent. Mr. Latta. Without objection. [The information appears at the conclusion of the hearing.] Ms. Schakowsky. What this will show is that, despite the Republican rhetoric, we haven't seen anything close to an explosion in investment. Examination of the Census Bureau's Manufacturers' Shipments, Inventory, and Orders Data from 1992 until today shows current investment levels far below that of even 2009. We shouldn't be surprised. At the end of the last year, Republicans' political consultants connected business with public relations firms before the tax bill was even signed into law. They touted one-time bonuses as evidence that the tax bill would lead to higher wages in the long term for workers. Today is the next step in that well-orchestrated public relations campaign, and I don't mean in any way to denigrate our great witnesses that are here today. So, where have the $2 trillion gone? Since the tax bill passed, we have seen an explosion of stock buybacks. When companies invest in buybacks, they juice their stock prices in the short term, creating what Senator Warren described as a sugar high, that leads companies to neglect investment in equipment, wages, and worker training. According to a recent report by the Roosevelt Institute and the National Employment Law Center, in the 3 years prior to the enactment of the tax law, public companies across the American economy spent roughly three-fifths of their profits on buybacks. So, what happens when Congress and the Trump administration give corporate Americans more cash? Examining the first half of this year, it is clear corporate America likes to spend on buybacks. Share repurchases surged 43 percent in the first half of this year versus a far less inspiring increase of 27 percent for capital expenditures. Consider Walmart, the Nation's largest employer. Walmart supported the tax bill and claimed it would help workers, but it is not clear how much of that $2.2 billion in annual tax cuts actually helped its more than 1.4 million Americans. Shortly after enactment, the Walmart board authorizes $20 billion in stock buybacks. The Roosevelt Institute released a separate report estimating that, if Walmart had directed half of that toward wages, hours worked compensation could have been increased by more than $5 per hour, which would transform the lives of many of those workers and help provide a living wage. As Members of Congress, wI am looking at the time--as Members of Congress, we are approached by employers all the time who say they can't find qualified workers, that there is a skills gap. I would argue that America's skills gap is really more of a wage gap. The declines in union density and a focus on core competence and executive salaries, instead of training and capital investment, have dried up the private sector's role in workforce development. So, I am going to skip to the end and submit the whole thing for the record. I just want to say that what my Republican friends won't tell you is how the administration's deregulatory agenda, again, makes the wallets of the wealthy fatter while risking health and safety of the middle class and working poor. I hope that we will hear some of the good news today and that what we are going to hear from all of you is that we can do better in this country. Thank you very much, and I yield back. Mr. Latta. Thank you very much. The gentlelady yields back. And that will conclude with our members' opening statements. The Chair would like to remind members that, pursuant to committee rules, all members' opening statements will be made part of the record. And as the gentleman from Oregon stated, the chairman of the full committee, we do have two subcommittees running simultaneously today. So, members will be coming back and forth during each committee hearing. Once again, I want to thank our witnesses for being with us today. We greatly appreciate your taking the time to testify before our subcommittee today. And today's witnesses will have the opportunity to give a 5-minute opening statement, followed by a round of questions from our members. Our witness panel for today's hearing will include Ms. Nikki Moyers, who is Vice President of Operations at Jerl Machine in Perrysburg, Ohio, right up the road from where I live; Mr. Edward Paradowski, the President of Apache Stainless Equipment Corporation in Beaver Dam, Wisconsin; Mr. Andrew Stettner, the Senior Fellow at the Century Foundation, and Mr. Eric Anderberg, the Vice President of Dial Machine in Rockford, Illinois. Again, we want to thank you all for being with us today. And if you would, pull that microphone up close and just press the button. You will see the little red light go on there. And you are recognized, Ms. Moyers, for your opening 5- minute statement. Thank you very much for being with us. STATEMENTS OF NIKKI MOYERS, VICE PRESIDENT, OPERATIONS, JERL MACHINE, INC.; EDWARD PARADOWSKI, PRESIDENT, APACHE STAINLESS EQUIPMENT CORPORATION; ANDREW STETTNER, SENIOR FELLOW, CENTURY FOUNDATION; AND ERIC ANDERBERG, VICE PRESIDENT, DIAL MACHINE, INC. STATEMENT OF NIKKI MOYERS Ms. Moyers. Thank you. Good morning. Thank you, Chairman Latta, and subcommittee members, for inviting me here on behalf of my company. My name is Nikki Moyers. I am Vice President of Operations at Jerl Machine, Inc., in Perrysburg, Ohio. The company was started by my grandfather, Bob Brossia, out of his garage in 1973. Today, Jerl boasts 67 employees and caters a variety of industries. The state of American manufacturing is, obviously, near and dear to us because it is our jobs, but also because it is our family legacy. In the past year, Jerl has seen a production resurgence unprecedented in its 45-year history. Our core customers are sending in more purchase orders than ever. We are hearing from companies that haven't done work with us for over a decade, and more and more new opportunities are surfacing. Our suppliers are just as busy, proving that our good fortune is not unique in this industry. And I attribute much of the upswing to the passing of the tax cuts and JOBS Act late last year, specifically its provision to cut corporate taxes. We are on the right track to have our highest sales and highest profit of year on record for 2018. Jerl has been able to give much-deserved wage raises to our employees, has already paid out two separate bonuses to all of our employees, and has another plan for late November. We have also added three machines to our shop floor to keep up with our orders. But our growth is hindered. We are currently running at 60 percent capacity, despite the fact that our phones are ringing more than ever. We are forced to turn away work because we do not have the skilled labor to meet our deadlines. We cannot fill our open positions, and the looming retirement of 15 percent of our workforce will only worsen this problem. I am confident that the current manufacturing boom is not a fluke, but unless strides are made to fill the skilled manufacturing jobs that nearly every company like ours has, we cannot sustain the growth. It is no coincidence that I am here today as the lone female up here representing my field. In my time at Jerl, we have employed a single female machinist. Our workforce is over 90 percent Caucasian. Not only are we lacking in skilled workers, we are suffering from a lack of diversity in manufacturing. And I think the answer lies in our schools. It is time to fund the industrial arts and practical life skills as part of a core curriculum. Fine arts education can't be allowed to cease either, as so much of what we do requires the craft of an artist's eye. Trade and technical schools must be touted by counselors, teachers, and parents as options equal to traditional 4-year colleges. Students need to know our field and that we offer high-paying careers. We are on the right track. The current administration has shown that it values the manufacturing field and it recognizes its impact on our country as a whole. As long as it continues to facilitate open discussions such as this hearing, manufacturing will endure with continued hard work. We have never feared hard work. Bring on the future. Thank you. [The prepared statement of Ms. Moyers follows:] [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] Mr. Latta. Thank you very much for your opening statement. And, Mr. Paradowski, you are recognized for 5 minutes. STATEMENT OF EDWARD PARADOWSKI Mr. Paradowski. Good morning. Thank you, Chairman Latta, Ranking Member Schakowsky, members of the subcommittee, for the opportunity to testify before you today. My name is Ed Paradowski. I am President of Apache Stainless Equipment Corporation in Beaver Dam, Wisconsin. Apache Stainless Equipment is a manufacturer of capital equipment from high alloys, primarily stainless steel, with annual revenues of approximately $43 million and 171 employees, most of which are skilled trades people. I also have responsibility for a second business, which is a company called Dalton Ag in Lenox, Iowa. We are a manufacturer of agricultural equipment; annual revenues of about $9 million and 43 employees. Both businesses rely heavily on the skilled trades, and that is the pacing item for both of our businesses to grow. Both Apache Stainless and Dalton Ag are part of a holding company, Dexter Apache Holdings, which we have six companies within our holding company, five of which are manufacturing located in Wisconsin and Iowa. The five manufacturing businesses operate in unrelated business segments. We are a 100 percent S corp ESOP. On a daily basis, as an S corp ESOP, we are fulfilling the American dream for our current 897 employee/ owners. That number would be higher if we could find more skilled trades people. My testimony today will reflect my personal perspective on the effects of current economic policy on the health of the U.S. economy with a specific focus on the manufacturing sector. To provide some backdrop for the testimony, I will give a little bit of my personal background. First, I would like to recognize Mr. Walden for acknowledging entrepreneurs and opportunity. I was born on the south side of Milwaukee, raised the youngest of six kids, and I started a manufacturing company at the age of 28 with no money and no real business experience. So, I love the opportunity that this country provides. And the root of my perspective is really based on the experience I have had since then. In the last 10 years, I have really focused heavily on advocacy activities. I work very closely with local and state government, national politicians, events such as this today. We host politicians and anybody who is willing to come visit our facility to educate them on what manufacturing is all about. Our state chamber of commerce, Wisconsin Manufacturers & Commerce, I work closely with them. They are an ally/partner to our business. To work, government needs to be an ally/partner to manufacturing and commerce in general. And they are a great leader in the State of Wisconsin. Most of you, I would suspect, are familiar with the MEP Network nationwide. In the state of Wisconsin, our governing overarching body for the MEP Network is the WCMP, Wisconsin Center for Manufacturing & Productivity. I sit on that board and, actually, I'm chairman of that board. So, the public- private partnerships that the MEP Network provides, I am familiar with that as well. We all talk about education, education reform, and the skills gap. The skills gap is definitely not a wage gap. We could speak later to that. Our Wisconsin Department of Public Instruction, which are the K-12, they are the core of how our children are educated. I have been a member at the very ground level of what we call the Regional Career Pathways Project in the State of Wisconsin. Actually, I was asked by our state superintendent to present for the State of Wisconsin in the grant competition three years ago, which the State of Wisconsin won a $2 million grant for education reform. So, I am deeply involved in education reform. It is one thing to talk about the problem; it is another thing to get in there and to also help solve it. And then, the National Association of Manufacturers was mentioned. Actually, I am out here today for a board meeting, which, unless I say something completely wrong, I will be elected to their board tomorrow. In summary, my perspectives are not just of a manufacturer, but a manufacturer that works closely with other manufacturers, with government, and with education. As I am running out of time here, I will hit just a couple of the high points, and really maybe just one philosophical perspective. I use this as an analogy quite often, the role of government in manufacturing. In a manufacturing business, we make our money on the shop floor. We add value to raw materials and we make goods and services. And myself and others in my office, we are corporate overhead. Our corporate overhead needs to do two fundamental things. We need to make our shop floor more productive, maximize output/efficiency, and there are also some compliance issues, safety and things of that nature. And the second thing is there has to be a sustainable economic balance between the cost of corporate overhead and how much activity is going on on the shop floor. In a soft year where manufacturing might soften a little bit, I don't just put more burden on my shop floor in terms of dollars; I actually have to downsize my corporate overhead. And that is the role of government to the private sector, not just manufacturing. The private sector is really four fundamental things. You mine it; you grow it; you make it; you invent it. And government needs to be an allied partner to that process, so that the private sector can grow. And tax reform is a piece of that, as are tariffs, and there has to be a sustainable economic balance between the cost of government and the size of the private sector. I will make one statement, as I am running out of time here, very quickly. There was a comment that was made--oh, where did it go?--there was a comment that was made regarding Mr. Walden said that the government--no, I'm sorry, I already acknowledged Mr. Walden. There was a statement that was made by Mr. Pallone, actually, that industry needs to be a partner to government. And that exactly is the problem; government needs to be a partner to industry. I think we have got this a little bit reversed. Thank you. [The prepared statement of Mr. Paradowski follows:] [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] Mr. Latta. Thank you very much for your testimony. Mr. Stettner, you are recognized for 5 minutes. STATEMENT OF ANDREW STETTNER Mr. Stettner. Good morning, Chairman Latta and Ranking Member Schakowsky. First, let me commend the committee for holding this hearing. Over the past year, the Century Foundation and its Bernard L. Schwartz Rediscovering Government Initiative sponsored the High Wage American Project, researching and touring the industrial Midwest to understand the future of manufacturing as a provider of good jobs and economic growth. Representative Schakowsky, several of the community leaders involved in the tour had a chance to meet you 2 weeks ago today when they came to Washington to present our findings, which I have submitted for the record. While no one in the Midwest has such rose-colored glass as to believe manufacturing will ever provide 30 percent of the jobs, like it used to, the message was loud and clear. Manufacturing matters to communities. Our research finds that in small towns in industrial states from Michigan to Mississippi, manufacturing still accounts for one in four private sector jobs. Manufacturing brings high-tech jobs to these firms into small towns like Phillips, Wisconsin, where Phillips Medisize has developed from a manufacturer of action figures to a worldwide provider of advanced molding and engineering services. The time is right for Congress to take action to build a proactive national manufacturing strategy. Resilient manufacturers have added back 1.26 million of the 5.7 million jobs lost from 2000 to 2010. But there are serious concerns. Our diminished production capacity has kneecapped our ability to innovate, as America had ceded its edge in high-tech manufacturing to advanced East Asian nations and Germany. And while manufacturing still pays 10 percent more than other jobs, that wage advantage has eroded. Low-paid, temporary help workers represent 11 percent of the manufacturing workforce today, up from just 2.3 percent in 1989. But a national manufacturing strategy must go beyond international trade and tax issues. Rather, Federal policies should focus on investments to create the conditions for manufacturers to compete and thrive in a global marketplace and for the manufacturing workforce to prosper. Communities are taking action. The Federal Government can help by helping them build public-private partnerships and spur high-tech manufacturing, reinvest in the workforce, retain and restore good jobs, and mobilize capital. The future of U.S. manufacturing lies in being the most high-tech, not the lowest cost. In Cleveland, we visited the ArcelorMittal steel mill, the first in the world to create a ton of steel with a single hour of labor, which sees a strategic advantage in environmental regulations that increase demand for high-grade, lightweight steel. Indeed, our ability to be a global leader in the clean economy depends on a robust manufacturing sector to create the next generation of green products. Look at our competitors. The Made in China 2025 campaign is a multibillion dollar effort to take China from a commodity producer to a leader in major advanced manufacturing exports from alternative energy to rail equipment. Manufacturing USA is our response. There are 14 applied research institutes targeting technologies like 3D printing in Youngstown, robotics in Pittsburgh, and super-strong, lightweight metals in Detroit. But, to truly compete, we have to step up Manufacturing USA into its full plan of 45 institutes and provide permanent Federal funding matched by the private sector. Now manufacturing can only grow if it has a workforce for the future. In Chicago, our research found there are nearly twice as many jobs open as workers hired. But manufacturing workforce pipelines, apprenticeship, and vocational education have withered. And a generation who experienced industrial decline tell their children to shun factory jobs. Congress can help by devoting resources that incentivize employers to double the number of apprenticeships in manufacturing in 5 years and provide new, focused resources at the K-12 level. These programs need resources for mentoring and support services to help women and people of color to break into the trades. That is the approach of Manufacturing Renaissance in Chicago to help some of the young people in some of the most violence-prone neighborhoods in the Nation to get industry- recognized credentials they need for high-paying jobs. And surely manufacturers will have more success recruiting when they pay decent wages, respect collective bargaining, and provide safe workplaces. Communities are developing innovative ways to work with local manufacturers to save and grow jobs, relying on smart, more sustainable approaches than simply offering tax giveaways. Pennsylvania Strategic Early Warning Network saves thousands of jobs by providing targeted business turnaround assistance to small and medium-sized companies at risk of closure. Federal policies should give these communities stronger tools by strengthening bedrock programs like the MEP, new initiatives like layoff aversion in WIOA, and the recently- authorized Defense Manufacturing Community Partnership Support Program. Lastly, the Federal Government should incentivize further private investment in manufacturing through an industrial bank focused on national needs and a clearinghouse that mobilizes impact investors to bring sustainable manufacturing jobs back into distressed communities. In conclusion, manufacturing is regaining its footing, but there is much more to be done. I urge the committee to continue its focus on boosting the manufacturing sector, and I welcome the opportunity to work with you in the future. [The prepared statement of Mr. Stettner follows:] [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] Mr. Latta. Thank you, Mr. Stettner, for your testimony. Mr. Anderberg, you are recognized for 5 minutes for your opening statement. STATEMENT OF ERIC ANDERBERG Mr. Anderberg. Thank you, Mr. Chairman, and thank you, Ranking Member Schakowsky, and thank you, Congressman Kinzinger, for allowing me the opportunity to be here today. Dial Machine, we are family-owned for 52 years, a precision contract manufacturer. We make parts for various industries, mining, oil and gas, a lot of fossil fuel. We do work for the government, defense, the national laboratories. And I can tell you today, I don't want to sound like a broken record, but our backlogs are way out and the work is tremendous today. In my 25 years, I have never seen such optimism. My father has been in this industry for 61 years and never seen the optimism and the rate at which we are growing here today. Currently, to give you an idea, our sales, as of the third week of September, we are 30 percent over all of last year, over 50 percent over all of 2016. So, things are on the right track. I think three things have happened in Washington that have helped the manufacturing sector. That is the tax, the regulatory, and the trade policy changes that have been coming forward. Tax, the C corp and the last tax legislation, the C corps got an income tax reduction to 21 percent. That has created incentive for the large corporations to bring work back. And I can tell you personally it has happened; we are benefiting from it. I have been told from companies like Caterpillar that more is coming. Large corporations are also investing in their plant and equipment with that money. S corps, such as ourselves, we didn't get the tax cut that the C corps got. Hopefully, that could be changed. But that extra cash and capital is being put to use. We are putting it to use. And also, along with that is the increase in the expensing in the 179. And, then, increasing the accelerated depreciation back to 100 percent has been a big boost, and it is an extremely useful and important tool for manufacturers such as ourselves to be able to afford to invest in capital equipment. Because of all the increased activity, there is a scarcity of labor. And because of tax--I credit the tax policy--the wages have increased. We have been increasing the wages of our people, in part, because it is a defensive mechanism to keep other people from stealing our people. And also, we are offering higher wages for people to start as applicants at our place. The regulatory environment. Rolling back regulations that were hurting the fossil fuel industry, I will give you an example, coal. We do a lot of work for Caterpillar, and all the large mining bulldozers, we have parts in each machine. Starting in 2013, we went from 2011-2012 we were making about six to eight sets of bulldozers a day. In 2013, one model dropped from 400 a year to 56 per year, and by 2016, we were down to about a half bulldozer shipping a day. We are back to five or six, but we are constrained because of capacity or people. So, the regulatory pushback has been terrific. My family, we also farm. And so, you cannot have a regulatory environment out here that is suggesting we are going to regulate puddles of water on your farm or we are going to tax every head of cattle for flatulence. That sends a terrible message to industry, farming, and ranchers; we are not going to invest. You can't do it. And then, trade. This is probably the most important part and probably the most significant change in 40 to 50 years. It is the first time an administration has acknowledge the problem we have with trade, international subsidized work coming into this country or subsidized product. The Chinese steel industry, the Chinese have been huge offenders, and we just cannot compete. That change and the talk of subsidy, if you come to Rockford, for example, I can point out many industries we have lost over the past several decades. When people talk about we are starting a trade war, well, I am here to tell you we have been in a trade war in this country for over 40 years, and it is the first time it has been acknowledged. It is the first time we are doing something about it. And this has created a level of confidence, too, that has helped to invest in your plant and equipment. The most significant challenge that manufacturing has, you have already heard it, people. We can't get them. We need 10 to 15 more skilled individuals on our floor right now. And I am here to tell you that we are turning work away. If I had the capability, I could double the size of my plant if I had the capacity of people, and we just can't get them. Fingers can be pointed every direction. I think industry didn't do a good enough job marketing ourselves to the students, to parents, to educators, and the vo-tech schools closed years ago, but they are reopening again, and that is promising. Apprenticeship programs. The small guys are training; the large companies are not. And I think we need to enlarge the pool of labor that everybody can work from, and we need to do something to incentivize the large corporations to do so again, because they just won't because it doesn't look good on quarterly numbers, quite frankly. So, anything that could be done with that would be tremendous. There is just too much to talk about to do it in 5 minutes. I hope I get some good questions, that we have good conversation today. Thank you. [The prepared statement of Mr. Anderberg follows:] [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] Mr. Latta. Thank you very much for your testimony and what you say about can't find workers and other folks. I have heard across my district it is the No. 1 issue out there. This is going to conclude our opening statements from our witnesses. And again, we appreciate you all being with us today. We will start the questions from our members, and I will start with my questions for 5 minutes. Ms. Moyers, if I could start with you, Jerl Machine provides precision metalworking products and services in Perrysburg, Ohio. Could you tell the subcommittee what trends you have seen in the marketplace for your products and services, and how that has changed over the last couple of years? Ms. Moyers. Yes. Thank you very much. Up is what we are seeing. In the last 2 years, we have been steadily growing. We actually had, in 2016, one of our lower sales, lower profit margins. It was a little bit, I think, of a trend from the recession. We had gone up a little bit, and then, it went back down. But, since the end of 2017, we have seen nothing but up. We have grown our sales. We have grown our profits. Our profits are nearly 20 percent so far for this year, when we were seeing only single digits back into 2014. And we have also increased our staff as much as we can. Of course, we need to increase it more. But we have our phones ringing off the hook and we are turning down work. Mr. Latta. One of the things I know that has been mentioned already--and I just brought up again--as I have seen across my district, people just can't find folks to work. That is a big issue out there, and it is a very competitive job market out there. What has been your experience with the wage competition in the last couple of years? Ms. Moyers. Well, I think there are two issues. We can't find people to work and we can't find people that are skilled. What we are finding are unskilled who don't necessarily want to come to work every day, who don't want to work as hard as we need them to work. And the other issue is our skilled workers, there are so few workers for the jobs that we need to fill that our competitors, and also our manufacturing that we are friendly with, are stealing our workers, or attempting to. We have had, I believe, three or four in the past year that have said they have gotten offers from companies that we are actually friendly with and do business back and forth, because no one can find the workers. So, they have had to resort to poaching them from other manufacturers. We have raised wages because we have to. So, talk that corporations are not using the tax cuts and the money to raise wages is just simply not true, because we have to. If we don't, someone else is going to and we will lose our workers. Mr. Latta. You bring up the point about finding folks that are skilled out there and bringing them in. I know in some companies they have said, look, if you are willing to work, we will train you. With the legislation that was recently passed on career and technical education here, do you see that is going to be a help? I know in our area, and across Ohio with our high school career centers, and also working with our 2- year institutions out there--are you seeing something we should be doing or do you see something that is bright on the horizon? Ms. Moyers. It is a start. I think that investing in the vocational schools and the trade schools, we are very fortunate to have one in our backyard in Perrysburg, Penta Community College, and they cater to kids for everything from manufacturing to veterinary programs and culinary arts. They do a little bit of everything and it is wonderful, and we get a lot of our young employees from Penta. But it is a single facility and they can only cater to so many people, and we need more. We also need the vocational skills and trade skills exposed to students in regular K-through-12 schools. I think that we need to divert funding to bring back the industrial arts, to keep up fine arts. Even practical life skills, job interviews, balancing budgets, financial things, they need this. We have students who come in to job shadow and some of them we have hired. And our young employees don't know how to fill out forms for health insurance, don't know how to fill out the tax forms. These are vital life skills that they need to have and we need to be teaching them. Mr. Latta. Also, you reference in your testimony the innovation. What is the climate out there and the regulatory changes that could help drive innovations for companies like yours? Ms. Moyers. My grandfather has taught me a lot of things. And one of the things that he told me in the past couple of years, when we were scaling back some of those overhead costs that my colleague here was talking here, one thing he told me we are never able to cut is going to trade shows, going to machine shows, to learn about what they are doing, to see what the new technology is, because that is what is going to keep us in business. He has never been afraid to do that. He started his business with some hand tools and a drill press, and now we are mostly CNC machining. We are breaking into new industries all the time, and I think that is so important. And that is the way that manufacturing is going to survive. We can't be stuck in our old ways. We can't be stuck with old technology. That is why we need new, young blood into the manufacturing, to encourage it. Mr. Latta. Thank you very much. My time has expired. At this time, I will recognize the gentlelady from Illinois, the ranking member of the subcommittee, for 5 minutes. Ms. Schakowsky. Thank you. Thank you very much. So, how many employees do you have, Mr. Anderberg? Mr. Anderberg. We have about 60 right now. Ms. Schakowsky. So, the three of you are small businesses. And so, I think this is a problem, some of the issues of the failure to close the wage gap or to invest in employees. It is probably different, and I think that you referred to that, that the private sector, large businesses, could do more to get involved in training, in being a public-private partnership. And you said, Mr. Paradowski, that your effort was to go to the government and say that there had to be improvements in education, and that it is really about government helping businesses rather than the other way around. I would suggest that your going and saying more tax dollars should be spent in some ways is a copout in what industry ought to do in order to help. Like we have in Germany, there are programs, public- private partnerships with business to invest in the training of workers. I am not really asking a question here. That is my take and you can answer that. You can talk about that later. But I wanted to ask Mr. Stettner on the research that has been done. We have heard promises that the Trump tax cut would lead to increased worker pay and investment in manufacturing. However, we know that in the vast majority of cases--and I think this refers mostly to the larger corporations--that did not happen. In fact, economists analyzing the effect of the tax cuts found no significant sign of boosting investment or increasing wages. So, Mr. Stettner, was there a boom in manufacturing investment after the tax cut went into effect? Mr. Stettner. Manufacturing has been on a rebound, I would say a consistent rebound for the last 6 or 7 years. And the challenge going forward is to increase those investments and for companies to look at the workers as partners. I think a great example that comes to mind is at the ArcelorMittal steel mill they have authorized a strike because the company is doing very well and workers are just asking for their fair share of those profits in terms of wages and healthcare benefits. And so, the move is going to have to be to make sure that workers are treated as partners, so we keep our skilled manufacturing workforce. Ms. Schakowsky. So, is there some way that the tax breaks could have been drafted in a way that would incentivize investment and what might that look like? Mr. Stettner. I am not going to say that I am a tax expert. So, I don't want to get into the details. I do think there are ways in which, in fact, the tax bill made it cheaper for companies to outsource jobs overseas, and we need to really close those gaps, so it is not cheaper to put production and corporate headquarters overseas. Ms. Schakowsky. Thank you. I just want to go back to Mr. Paradowski. Other countries have invested in long-term strategies for their manufacturers. China has been mentioned, the Made in China 2025 campaign. But Germany has what is called the Fraunhofer Society. And both of these countries have retained more production and more jobs than we have. The German plan is a public-private effort. And I am just wondering what you think the private sector could do, the manufacturing sector? Because everyone is talking about we can't find the skilled workers. And if you want to comment on this, and there is time, Ms. Moyers, I would be happy to hear that. Mr. Paradowski. I would love to comment. The way I look at education, and I have stated this many times within the State of Wisconsin, education is the supply chain, the commerce. I don't know of anybody who goes to school to get an accreditation just to have it hang on their wall. They are doing it to ideally get a job. So, within the K-12 space in Wisconsin, I think there is a variety of things that need to happen. Awareness, nobody aspires to---- Ms. Schakowsky. Yes, but I am not asking about what the State of Wisconsin can do. I am asking what the employers can do. Mr. Paradowski. The employers can certainly provide the data as to what jobs are out there, what the makeup of commerce is. There are a lot of kids going through school to get accreditations where there is not a job, and there are a lot of jobs where we don't have workers. Thus, we call that the ``skills gap''. I don't refer to what we offer at Apache Stainless Equipment as jobs. I refer to them as careers. We want people to come in, and it is market-based wages. We will take unskilled people who we offer what we call the welding bootcamp. If you have never welded in your life, if you can come in and meet some basic requirements, passing a drug test, have some work ethic, we will teach you how to weld and we will pay you a market-based wage, which is far north of the minimum wage. We have a hard time finding people to do that. Ms. Schakowsky. OK. Do you mind if I continue for a while? Mr. Latta. Go ahead. Ms. Schakowsky. Thank you. Before I go to Ms. Moyers, I wanted to ask Mr. Anderberg, you mentioned that large corporations could be doing more. What did you have in mind? Mr. Anderberg. Well, I think there is a lot of short-term thinking. And unfortunately for them, I think it is catching up to them; they are realizing it. I go back in the past. Thirty years ago, a lot of large corporations and large manufacturers shuttered their credential programs. They got rid of them. And now, a lot of those people are retiring that went through those programs and there is a big gap. And shame on them, I think. Today, for example, in Rockford, we are fortunate; we have the Rock Valley College, and we have an apprenticeship program through our local Tooling and Machining Association that I am on the board of. We have a very successful apprenticeship program. It wasn't so some years back, but now we have over 120 apprentices for skilled machinists, tool and die trade in the program just in Rockford today. And we are the only ones training. The small manufacturers are really the only ones training. And I think at some point the larger manufacturers will have to train again. It might take some time. But I think if there is something that could be incentivized for them to start apprenticeship programs again--I don't know if it is a tax credit. We talked about this. Actually, I talked about this last week, and we had a board meeting of our Tooling and Machining Association. Maybe a tax credit or something like that. I don't think we need to have taxpayer dollars going to the benefit of companies, but maybe let them keep some of their capital in the form of a tax credit, or something like that, if they have an apprenticeship that is an accredited program. Our apprenticeship program, it is accredited by the Department of Labor. Everyone gets a Department of Labor certificate at the end of their training. And so, maybe something like that could be done, but I just think the only way you are going to get them off the porch now is to incentivize them some way or another. Ms. Schakowsky. If I could? There is hardly anyone here today. So, I wonder if Ms. Moyers could just say a few words? Mr. Latta. Yes. Ms. Schakowsky. Thank you. Ms. Moyers. Thank you. To speak to your question to Mr. Paradowski, I think that what corporations can do is we need to make ourselves seen. One of the things that we are doing at our corporation is, with part of our charitable contributions, we donate to a place called Imagination Station in Toledo, Ohio, which is a science- based museum and activity center that is geared toward children. We have done several activities with them. We have donated for the past 5 years, and we have also been a part of their outreach programs. They do a great STEM for girls program, and we have done that. I was lucky enough to be a participant one year. And so many girls--and I think the ages were 8 to 13--so many girls came up and said, ``I didn't realize a girl could be a scientist. I didn't know I could do this. I didn't know that there were these jobs.'' And that is one of the important things, is we need to just get ourselves out in front of people, so that they can see us and see what we do. Ms. Schakowsky. Thank you. I yield back. Mr. Latta. The gentlelady's time has expired. And just to follow up on Mr. Paradowski, what you said about welders, that is the No. 1 job out in my district, that if you have got that skill coming out of high school, you are hired immediately. The Chair now recognizes the gentleman, the vice chairman of the subcommittee, from Illinois, for 5 minutes. Mr. Kinzinger. Thank you, Mr. Chairman. Again, thank you all for being here today. Mr. Anderberg, should the government mandate wages that you pay? Mr. Anderberg. No. No. Mr. Kinzinger. Give me, if you can, like generally, what is kind of the average, if you kind of put all your employees together, what is kind of an average hourly wage? Mr. Anderberg. I would say the average hourly wage is up into the mid-twenties. Mr. Kinzinger. And has that, you said that is---- Mr. Anderberg. Not including benefits. Not including benefits. Mr. Kinzinger. And you said that has increased over the last few years? Mr. Anderberg. It is increasing, yes. Mr. Kinzinger. And that is because of? Mr. Anderberg. Scarcity. Mr. Kinzinger. What would have happened if, say, 3 years ago, Washington would have mandated the wage you are paying now back when the economy was hurting? Mr. Anderberg. Well, I will tell you, Congressman, as a small manufacturer, we made the decision in the 4-year slump we had between 2013 and 2017 to hold onto our people. We had built enough cash reserves up that we held onto them, gave them 40- hour weeks. And we made it; we ate up all our cash reserves in those years. If we would have come out of that or had that come down, I would have laid off more people. It is just you can't do that. Mr. Kinzinger. And can you think of---- Mr. Anderberg. Go ahead. Go ahead. Mr. Kinzinger. Oh, no, please. Mr. Anderberg. We talked about Germany. I have been in German machine tool plants. I have been in German manufacturing companies, and I don't want any mandates from the government. One thing the Germans have done is they have mandated that, if you are a manufacturing company, you have to have 10 percent of your workforce in an apprenticeship program. That is pretty good, but I think that is incumbent upon the manufacturer to make that decision, not government. Mr. Kinzinger. Yes, and I think there are some things to learn from the German system. I like, in fact, they introduce kids in high school, put them on different tracks, career tracks, past opportunities, show them options. And I think that is something, frankly, we can learn from. Germany has actually been criticized significantly in the EU for what they call keeping wages low. And so, I think to kind of look at the German system and say that is the answer, I don't think it is, even though, again, there are some things we can learn from them. They are very obviously technologically advanced and everything else. But I do think it is important that, since the enactment of the tax cut and the repealing of a lot of the regulations that you talked about that have been stifling, 1.7 million jobs have been created. Wages are up 2.7 percent. More than $4 billion has been paid to employees in terms of bonuses. Just 2 short years ago, three-quarters of manufacturers were saying that the biggest business challenges were our tax and regulatory environment. But, as of June this year, less than 20 percent say that that is a top concern. You look at it, and we should have these good arguments in D.C. That is the point of this place. But, if you look at it and you say, who are we asking, when you ask the people that are actually making the jobs, that are manufacturing, what is it you need and what is it you have seen, and they are telling us I think, by and large, that we are creating a better environment, and you look at the economic numbers, it becomes pretty obvious that it is working. Unemployment is at an 18- year low. It is not perfect. We still have a lot of work to do. We have a lot of issues with training. You said you employ about 60 people, 45 of whom are skilled tradesmen, machinists, and assemblers, but you have a need for another 10 or 15, and you can't fill it. You also mentioned that this is a pervasive problem, not only in the manufacturing sector, but everywhere. Can you give us a couple of examples of other industries? And also, do you attribute the shortfalls to the same factors that have led to the shortfalls in manufacturing? Mr. Anderberg. Yes, I could talk about the construction industry. I know people who are building contractors, excavators; their people are retiring, too, in the next couple of years. I talked to one owner, Northern Illinois Service in Rockford. They can't get anybody. He is really concerned about his business. There are other service industries, everybody, everybody you talk to is having a problem getting people, specifically young people. And this is something I want to speak to. I touched on it a little bit in my writeup. This is a societal issue we are facing. We just can't seem to get young people into the trades. And what I have also found, it is a global issue. Just recently, we had a serviceman over from Germany to work on one of our machines. We have gotten to know these people pretty well. And we had another gentleman in earlier this year. We get into this conversation, and they say--ythese guys fly all over the world. They are in plants in Russia, China, India, everywhere. And they have told me, both of them, that you go to a plant in China or India, they tell us the same thing; they can't get young people into this trade, into this type of work. You walk into the plants; they are all older people. So, it is a unique situation. It is a unique challenge. I don't know if it is because manufacturing is not seen as a technological industry. It is. And maybe it is more of a marketing effort toward, like I said, the students, the parents, the educators. If you were at the IMTS show last week, there was a display where they showed voice-activated commands for making machine tools move. It is fascinating. My father and I were there, and we happened to see a lot of students there that day, and they had lounge couches there; you could sit and watch. It was the only booth that I saw where students sat and were extremely attentive to watching the demonstration. Maybe that is part of the answer. Maybe it is increasing the technology, making it more work like an app on your iPhone or your iPad. I think that has something to do with it. But I don't know. It is strange. I think everybody is experiencing the same thing. You can't get young people in. They last maybe a day and they don't come back. Mr. Kinzinger. Thank you. I have a thousand more questions, but I will just leave it by saying I think this is an area where, frankly, there can be a lot of bipartisan cooperation. We have these deep debates, but, ultimately, how can the government restructure our programs that exist, not new programs, but restructure them to make sure we are turning people onto these opportunities? So, thank you again for being here, all four of you. And I yield back. Mr. Latta. Thank you very much. The Chair now recognizes the gentleman from Texas for 5 minutes. Mr. Green. Thank you, Mr. Chairman. Thank you and the ranking member for having this hearing. And I want to welcome our witnesses. Manufacturing--I come from the Houston area, the industrial part--my companies that are hiring are refiners, chemical plants, service industry, and the oil industry. What we have seen, and I have worked for a number of years because the way I got into college was I also was an apprentice at a newspaper. I learned to print a newspaper in the 1960s. And I asked the owner of the newspaper, I said, ``You hired me as an apprentice. Why didn't you go to the high school we had in the Houston area that had a printing vocational program?`` And he said, ``Their technology is so far behind, we couldn't do it.'' So, over the last decades, we have taken vocational ed out of high schools. And our community colleges have been the one that should be taking it up. I have had a really good community college in my area where we have refineries, chemical plants, essentially, in a college who actually partners with the human resources of these, Shell, LyondellBasell, you name it, and say, what do we need to teach and get these students to have also a 2-year degree? But, then, they can walk onto your plant and work. That has been really successful, and I have been trying to get our other urban areas in Houston, community colleges, to talk with the people who hire the folks. And I have been to the locations and seen the training, and with these manufacturers who are doing that. Is that commonplace, that community colleges have taken over most of the vocational public? The apprenticeship I went through just was not a public one. It was a union, but I ended up being able to manage that newspaper after I got my apprenticeship because I had also gotten my undergraduate degree in business. I was just lucky to be able to have that kind of situation; whereas, so many of our young people coming out of high school, they may want to go to college because that is where everybody says they should, but they don't know how they can afford to get there. And that is why an apprentice program in a community college, where you can earn a living and you can also still go back and get you a 4- year degree in whatever you want to do. Each of you stated you don't have enough younger employees to replace older employees who plan to retire. I have heard that for a number of years. As you said, even nationally, internationally, it is a problem. How can individuals enter the manufacturing industry right now if they don't have access to the educational programs like a community college or Manufacturing USA, or in my case just because the company wanted to hire me, and lightning strikes? What kind of program could do it? And I am real familiar with the German program. I have been to BMW and seen that. I don't know if that structure would fit in our country, but I do know we need to have an apprentice program that is viable, so employers could count on the skills that they are learning there, that they can come on the job and work. Mr. Paradowski? Mr. Paradowski. I would say that it is the awareness. There is certainly a stigma around manufacturing. I know when I was in high school in the early eighties, I went through a technical high school, market trade and technical high school, learned the trade. In school, we were all being told that, if you don't have a 4-year degree, at some point soon you are not going to have a job. So, I think maybe kids have been brainwashed into thinking that they have to go to a 4-year institution. It is the awareness of what manufacturing is about. Our facilities have become very technology-driven. It is not dark, dirty, and dangerous like maybe some people believe. Every single school teacher at the Beaver Dam High School in our community has been through our facility, and most of them have never been through a manufacturing facility prior to coming through. That is our role as the private sector, is we need to really drive the awareness that these careers; they are not just jobs. It is very technology-driven. It is the future. There will always be a sizable place in the economy for manufacturing. It is not going away in its entirety. Anybody who believes that is somewhat naive, I believe, and no disrespect to anybody who might believe that. But we certainly have a role to work as partners with education and K-12 and the tech college system, and any of the institutions out there that are educating our kids. Wisconsin Tech College System is one of the best tech college systems in the country. The average age of a tech college student in Wisconsin is 27 years of age, which would lead me to believe that they were out figuring out other things first before they realized maybe I want to go down the path of a tech school. I would rather that the average age be 18 or 19. That means that the supply chain speeds to the workforce. Mr. Green. Any other response? I thought I had 4 seconds. Mr. Stettner. I just wanted to, when we talked about existing programs, what it made me think of is community colleges don't have an incentive to do technical training. A lot of the Federal student aid programs will not pay for that training, and the companies have to cover all the tuition. So, we have to kind of level that playing field. I think it is one kind of thing that we could do and I certainly support. Mr. Green. Thank you, Mr. Chairman. I know because my first two terms I was on Education and the Workforce, and that committee has prime jurisdiction. But I would sure like to see programs in our Department of Labor that would actually look for those skills training that they can go out and walk onto that job. So, thank you, Mr. Chairman. Mr. Latta. Thank you very much. The gentleman's time has expired. And the Chair now recognizes the gentleman from West Virginia for 5 minutes. Mr. McKinley. Yes, thank you, Mr. Chairman. And you on the panel, you saw an opportunity or you saw earlier today in this hearing why Congress is considered to be so dysfunctional when you saw the attacks that went underway over the tax cut. When we are talking about manufacturing, people want to go back on the other side and talk about the tax cuts and that they haven't been productive. And the fact that one person referenced the fact that they were all used for buybacks, and I am sure there were some. I am sure there were some. But just keep in mind that, according to Fortune magazine, of the Fortune 500, the top S&P 500, they only represent 17--and I shouldn't say ``only''--but they represent just 17 percent of the workforce, the publicly-traded companies. So, we are dealing with 117 million jobs that are in these small and medium-sized companies. They are not doing buybacks. It is just a distraction of what this fight is about. Because we have seen in West Virginia, as a result of the tax cut, what it has done is strengthened our manufacturing. We have had manufacturers that make truck parts, truck bodies, are now going to triple the size of their operation in West Virginia. Toyota that makes engine blocks is going to put $120 million more into it, thanks to the tax cuts, down in Buffalo, West Virginia. ATK was bought by Northrop Grumman, and they are going to expand their operation in manufacturing in West Virginia. Boeing just bought Aurora Space Flight, making aerospace parts, as a result of the tax cuts. So, I am seeing some positive. It is larger companies, but also I just had an opportunity this last weekend to talk with a small manufacturing company, Panhandle, with Bob Contraguerro, out of Wheeling. He didn't use it for buybacks or increased dividends. He hired more people. He has expanded his operation. He is buying more trucks. He is doing all the things he can, but he is facing the same problem that you all have talked about; he can't find qualified people for that. So, my question has to do with the workforce. I think across the country we have gone away from vocational education. We are not making the incentives anymore for apprenticeship programs in our trades. I am chairman of the Building Trades Caucus, and we know desperately we need plumbers, pipefitters, carpenters, and electricians to be able to that. We have got to be able to get that base back again. So, I am curious to see, from your incentives or what you are seeing, how would you suggest that we renew our interest in vocational training and apprenticeship programs? What can we do from Congress to make sure that we have a workforce? What would you suggest, please? Any of you? Mr. Anderberg. I think, for example, in Rockford, I think every district or every area that has manufacturing recognizes that shutting down the vo-tech schools was a big mistake. In Rockford alone, we have had one high school, Jefferson High School, start up their vo-tech training programs; it has been over 5 years ago now. And it has been very successful. There is another high school in Rockford that is starting their vo-tech program again. Across the border in Beloit, Wisconsin, in fact---- Mr. McKinley. We have to overcome a stigma. Mr. Anderberg. Right. Mr. McKinley. Someplace back in the seventies or eighties, there was a stigma about, well, they are in a shop; they are autobodies. How do we get that back and remove that stigma with that? Mr. Anderberg. I think we have to show that, if you are going--I went to college and I have a master's degree--but I think you have to show, if you go to a 4-year school and you come out with a bachelor's degree, you are in debt, and that the wages you are going to make aren't as much as somebody that comes out of high school with math and an aptitude and goes to work in a manufacturing operation, the amount of money they are going to make. The wages that we have in our manufacturing companies today just in Rockford are tremendous. And then, because of the scarcity, they have risen, and it is an attractive wage and it is more than a living wage. The people that work in manufacturing make more than the majority of the middle-class, working individuals. I can't put it all on manufacturing. You can point fingers at everybody. We have to do a better job of marketing and educating the public of what manufacturing is today. I don't know how; maybe that is something Congress can step in and do. Mr. McKinley. I am sensitive to it because my first job was in manufacturing. I was on an assembly line in an ice plant, in a neighborhood ice plant. So, I understand that we worked seven days a week. But, nevertheless, I appreciate your effort with it. I am sorry that some people got distracted in trying to make this an issue over the tax cut program. But, you see, there is a reason they are doing that, and I am sorry. And I yield back. Mr. Latta. Thank you very much. The gentleman yields back. And the Chair now recognizes the gentleman from Kentucky for 5 minutes. Mr. Guthrie. Thank you very much. It is nice to be here. Sorry, there are a couple of other hearings going on, so I have been in and out. I apologize. But this first question is for Mr. Anderberg and Ms. Moyers. As nearly everyone has mentioned this morning, the workforce challenges you are facing are significant. This issue is important to all of us and our districts. Mr. Anderberg, one issue, in particular, you mentioned was the need for increasing apprenticeship opportunities. And some may not be focused on that. I recently started the Congressional Apprenticeship Caucus with my colleague, Susan Davis of California, and we introduced legislation to expand awareness of apprenticeship opportunities by providing funds for the states and the Department of Labor to get the word out about opportunities. There are a lot of challenges, but could you tell us what are some of the biggest challenges that are specific to your apprenticeships or earn-and-learn opportunities? Mr. Anderberg. I think for us, and what we have experienced, what I know my fellow colleagues back in Rockford have experienced, it is simply finding a young individual that wants to come to work every day, wants to do the work. And in our instance, when we have someone come to the door that is interested in a manufacturing job, what we do is we put them into our apprenticeship program. And if they exhibit good attendance, an aptitude, they are a good worker, if we ask them, ``Do you want to become a machinist? Do you want to make a career here?'' If they say yes, we pay for their apprenticeship 100 percent. We pay for all their books, all their costs. And even if they are on a night shift, for instance, while they are at school, because there is some night school and night classes, we pay their wage while they are at school. I don't want to penalize them. So, we bend over backwards to get somebody into our apprenticeship program. The problem is finding individuals to come in that want to do it. That is the biggest problem. Mr. Guthrie. Ms. Moyers, do you have any followup? Ms. Moyers. Yes. We actually at Jerl also offer an apprenticeship through the State of Ohio. We have not completed an apprentice since 2014. We have had a lot of people enrolled. We have put people through programs. And like Mr. Anderberg has said, the young people are either not focused enough to want to continue it--it is a 4-year program with us. And after a year, they drop off, they start missing classes, failing classes. The other issue, I think, that is hindering people from offering apprenticeship programs is no one wants to train an employee that another company is going to poach. So, because the workforce, we have this skilled wage gap, it is really hard to commit to putting the investment into those employees if you are fearful they are going to jump ship and go somewhere else, because, then, you have no return on your investment. Mr. Guthrie. Right. Ms. Moyers. I don't know what the solution is to that, unfortunately. Mr. Guthrie. Well, thanks. And, we are looking at other things and other bills and other issues about getting people into the workforce, and so forth. My argument is that these people are wanted, they are needed, and what you just said, wanted. In particular the farm bill we are debating that. And I really believe this. If somebody is on some kind of benefit and they don't get back into the workforce, then 5 years from now they are going to be in the exact same spot. But what you just described is what my experience is. I am from a manufacturing background. If somebody will come to work and show up every day and do their job, they are going to move up and improve. And I will tell you the difference. If somebody doesn't get back into the workforce, they are going to be in the exact same shape 5 years from now. If they just show up for work with even low skills or no skills, they are going to be where you are talking about 5 years from now through an apprenticeship or some kind of program, and be better off. But I want to get to one other thing. I am changing the subject. So, Mr. Anderberg, this is for you. My colleague Doris Matsui and I are looking to drop a bill to direct the Department of Commerce to establish a working group of Federal and private stakeholders to define blockchain. That is one thing, until we can even deal with policy, get the definition of blockchain and study some of the implications for spectrum policy in potential applications. We have a lot to learn and hope this is a good first step in kicking off significant conversations across the Federal Government. Do you believe innovations in blockchain could be important to your company and the manufacturing sector generally? Mr. Anderberg. Yes. I think anytime Washington wants to talk about manufacturing, it is a benefit. I remember coming out here in the late '90s when it was discussed talking about PNTR and some of the trade agreements. And I came out in small manufacturing groups. They didn't want to hear us. They didn't want to hear what we had to say of what was going to happen. And I think the reality has become reality. Anytime Washington has talked about manufacturing, I think that is important. And we have talked here on the panel before we started. You know, the is the Digital Commerce and Consumer Protection Subcommittee. Yet, we have a USDA. I am not opining for another bureaucracy. But how important manufacturing is to our national defense, our economy. Shouldn't there be some type of subcommittee or committee on manufacturing to keep watch on some of these things? Maybe that is something. But I fully appreciate anytime Washington wants to discuss, to talk about manufacturing, because it is extremely important to our country. Mr. Guthrie. Thank you. I appreciate that. My time is expired and I yield back. Mr. Latta. Thank you very much. The gentleman's time has expired and he yields back. And the Chair now recognizes the gentleman from California for 5 minutes. Mr. Cardenas. Thank you very much. I appreciate the opportunity to talk to some of the practitioners out there in the real world. So, thank you very much for being here. Ms. Moyers, thank you for pointing out in your opening statement about the lack of diversity, even in your own company. And it is good to hear that it sounds like you would love to welcome more diversity. Is diversity good for business, for your business, for your bottom line? Ms. Moyers. Absolutely. It is good for every business. I can't tell you how many times just myself, as a family member, completely accepted in my business, walking in and I can present an idea that I can tell no one at the table has thought of before. And I don't know if it is because I am a woman. I don't know if it is because I didn't stay in my industry; I didn't start there. I have previous experience in other industries. But any time you get someone who is different, they offer a unique perspective. If they have grown up in a different place, if they have experienced different prejudices, experienced different benefits from their race, their religion, their sexual orientation, their gender, it is important because we cannot continue--we have talked about manufacturing as needing to be innovative and needing to progress, and we can't progress if we have the same people making the decisions and deciding to--excuse me; I lost my train of thought--making the same decisions. Mr. Cardenas. Well, Ms. Moyers, you just mentioned something very interesting. That is, you mentioned a whole breadth of different communities. Your product, is it consumed--or who participates in that product? Is it across the board or it is only one kind of community? Ms. Moyers. No, we have a---- Mr. Cardenas. The ones that you just described? Ms. Moyers. Our business is metalworking. Basically, we are not an end product. We provide for other companies that produce other things. Mr. Cardenas. So, all communities that you just described benefit from your product in some way or another? Ms. Moyers. Absolutely. Absolutely. We work in multiple industries, food packaging, automotive, elevator, energy. It is nationwide. Mr. Cardenas. There is another form of diversity---- Ms. Moyers. Right. Mr. Cardenas [continuing]. Diversity of consumers, right? Ms. Moyers. Yes. Mr. Cardenas. OK. In some of the testimony, some of you were talking about how young folks, it is hard to attract them and get them involved in manufacturing, or what have you. My office, my district office, we participate in manufacturing day. We really make it a manufacturing week. And one of the things that I came up with, and we are still trying to tackle this issue--I happen to represent part of Los Angeles. So, it is not uncommon to see an A-list star walking down the street or somewhere in town, and you are like, whoa, that is so-and-so. On that point, I think it is important for everybody, whether it is you, the practitioners, us as policymakers, or what have you, we have got to try to get really cool spokespeople to encourage that manufacturing is cool. Another thing as well that I think is important, I think that, on balance, manufacturing actually pays more on quasi- entry-level skill set jobs than does other quasi-entry-level, not-so-much-skill required jobs, like, say, working at a fast food restaurant, or what have you, where many of our young people end up, if they are determined to actually work, and say, well, that is the only thing I have got. So, I have got to put on this funny, little hat and I have got to punch that cash register. I think it is really important that your industry pay attention to that. I think that you have a higher likelihood of attracting a young person who already went out in the workforce and got tired of working for minimum wage and tired working for a job that requires almost no skills other than showing up for work. I think that you have a higher likelihood that they will actually be more attracted to trying to apply themselves for one of your businesses and in manufacturing in general. That is my take. Since I was 13, I had one, two, three jobs at a time, or what have you. That was my immigrant parent inculcation into my life. So, I think I was a little lucky. So, by the time I got out of high school, I was like it is just natural; I have one, two, or three jobs at any given time. Today's younger folk, they don't seem to have that kind of want for that kind of effort. So, I am just saying that I think that it is important, especially for you practitioners, to just pay attention to what is going on out there in the community. And instead of, unfortunately, seeing them be not attracted for you, maybe after they have already been in the workforce and realize that you do have a better paying, better opportunity, career type of opportunity for them, then maybe you will have a little bit more stick to it from some of these younger folk. I am looking at the clock; I am running out of time--but one thing I definitely want to ask Mr. Stettner is, how can manufacturers better attract and retain their next generations of diverse employees and leaders? Mr. Stettner. One thing I would say in interviewing workforce practitioners who place people in manufacturing, many of the programs only focus on getting the person the first day of the job. They need more resources to help with concrete things like child care and transportation, but also just mentoring and coaching, especially if you have a first Latino kid or the first Black kid going into an all-white workforce. And it is also an educational piece on the manufacturers to learn how are we going to make that person comfortable, how are things people are saying on the floor making that person uncomfortable, how do we change our culture to be more welcoming to women and people of color? And what I have seen is manufacturers are listening and they are working, and look at those programs as a way to learn how to do that a little bit better. Mr. Cardenas. Thank you. I yield back. Mr. Latta. Thank you very much. The gentleman's time has expired. And the Chair now recognizes the gentleman from Pennsylvania for 5 minutes. Mr. Costello. Thank you, Mr. Chair. I would like to point to an example in my home district, in Berks County, in fact, that highlights the success resulting from many of the pro-growth policies such as the tax cuts and JOBS Act. Carpenter Technologies, founded in Redding in 1889, employing 2,000 people at its Berks County facility, produces special alloy-based materials for aerospace, energy, transportation, defense, and consumer electronics markets. Carpenter Technologies recently announced a $100 million investment in its mill in Redding because of the tax savings they recently have found themselves having as a result of the tax bill. Capital investment is a strong signal of entrepreneurs' confidence about the future. We need to focus on marrying those free-market policies with workforce development, training to help minimize the skills gap through apprenticeships, on-the- job training for job seekers, and emphasizing curriculum in schools that can be translated to the 21st century economy. Can all of you talk about some of the training options your potential employees need to be certified and if there are any barriers for them to receive the proper training? The second question, how can the Federal Government be a better partner in fostering more workforce development opportunities to get folks off the sidelines and into good-paying jobs in the manufacturing sector? Ms. Moyers. I think that, with my company specifically, we are offering quite a bit. We offer tuition assistance for anyone that is continuing education. Our apprenticeship is fully paid. And basically, if you are willing to come to work and work hard, we will invest in you and we will make sure that you move up. Just like it has already been said, if you can find someone who is unskilled who will show up to work every day, we are going to train you and we are going to move you up in our fields. I am sorry, what was the second part? Mr. Costello. Federal Government partnering. Ms. Moyers. Yes. Mr. Costello. How do they? How might they do it better? Ms. Moyers. I think we have already covered it a little bit. Mr. Costello. I think so, but---- Ms. Moyers. I think education funding into vocational schools and trade skills and life skills is vital. I think that is the way that the government can help us. Mr. Costello. That second part, maybe add where you may be working with your local or regional workforce development organization and how the Federal Government's role is or is not involved in that, for the next folks. And we can go back to it in a second. Mr. Paradowski. I think the role of government, the K-12 space, we put too much incentive on SAT scores and truancy. I have got four daughters, three in college, one in high school. The mindset is, if you do well on the ACT, there is the center lane that, if you are in it, you are a winner and everything else is kind of a fallback. So, if you find yourself in a skilled trade, it is because you couldn't make it on the main lane. I think that is a challenge where it creates the stigma. I think the things that will help is the awareness of what is out there. I said it earlier; nobody aspires to be that which they don't know exists. So, data in the K-12 space, here are the opportunities that lay out there in the workforce. And they are all equal valued. So that kids aren't conditioned to think I have got to go to a 4-year school and take on that debt, just to find out that what I got trained in isn't something that either (a) has any market demand or (b) is anything I enjoy doing. Getting people off the sidelines is a tricky thing. I have some data. It is a little bit dated. In the State of Wisconsin--this was late last year actually--are unemployment rate at the time was a little bit over 3 percent, which equated to 109,000 people. Right now, the unemployment rate is below 3 percent. At that same point in time--and as everybody would know, unemployment is those out of work looking for work--at that same point in time, there was 1.4 million people in the state of Wisconsin that were out of work not looking for work. Some of those, in all fairness, might be people who don't need to work. But I think it would be naive for us to think that that is all of them. There are a lot of people who are able-bodied that could be additive to the workforce that aren't. Some of that might be a fact that the K-12 system. Current gradation rate of Milwaukee public schools is about 60 percent. So, four out of ten kids, where are they going? I am a graduate of Milwaukee public schools. So, those things concern me deeply because, if they are not going into the workforce, how do we get them into the workforce? Maybe if there are more pathways equal valued, that a 4-year degree is great; trade is great; military is great. They are all equally great. Maybe less people opt out at an early age. There is, obviously, a lot of other complicated parts with opioid addictions and things of that nature. But that is our opportunity to me, the people that are on the sidelines. We have got to find a way to keep them in the game, keep them on a pathway to be added up to the economy. Mr. Stettner. There is obviously formula funding for career technical programs, but they kind of fund the same programs year after year. In the same way some of the programs like the TAACCCT grants incentivize some really innovative activities that led to the current boom in apprenticeship, I think we need a focused program that would spur school districts to do something innovative about the trades, not a big program, but something, a competitive grant program that really got the juices going and kind of show the Nation we can do more. Mr. Anderberg. As far as barriers to training, again, I think it has to do with an educational effort of the educators, the parents, the students, and, obviously, opening the vo-tech schools, which we are seeing in Rockford. In one instance, I have talked to the program administrator in Rockford, and they are looking at, for juniors and seniors that are going through the program. This used to happen years ago, where you have a half-day at a workplace and half-day in class. And so, then, when they are ready to graduate from high school, they are in. And then, from there on, there could be training. As far as what can the Federal Government do, I guess maybe helping create awareness. I don't want to repeat what they said, but it is just helping the community colleges. If there are vo-tech programs--I will step back. Years ago, I was told that part of the problem with Congress is, of the 435 districts, only 35 districts have manufacturing in them of any significance. I think that has been an issue over the years. That is why things have fallen through. So, the recognition here today, having us here today and talking about this is a start, but I think there has to be more awareness. If funding for some of the tech schools or for some of the community colleges, like we have in Rockford, could help, that would be terrific. Mr. Costello. Thank you all very much. I yield back. Mr. Latta. Thank you very much. The gentleman's time has expired. And the Chair recognizes the gentleman from Florida for 5 minutes. Mr. Bilirakis. Thank you, Mr. Chairman. I appreciate it. For Mr. Anderberg, Mr. Paradowski, and Ms. Moyers, I heard from my local manufacturers, the stakeholders in Tampa and the Tampa Bay area, that workforce development is one of the biggest problems in this sector. I know many of my colleagues have already highlighted this. And we have the vocational training, the schools there. We have career academies, which I worked on in the legislature. So, in other words, if there's an area of need in the community, we focus on that particular area of need through the career academies and the high schools. And, of course, we have AMSKILLS. We have P-TECH, and we have Marchman, and all the community colleges. They do an outstanding job, but we need more. This is everywhere I go I hear this. But can you tell me about some of the other impediments, because we did cover this, to growth in the manufacturing sector? So, this is for Mr. Anderberg; you can go first, please. Mr. Anderberg. You said impediments to growth in the manufacturing sector? Mr. Bilirakis. Yes, yes. Well, besides the workforce. Mr. Anderberg. Well, that is our biggest impediment at the moment. Mr. Bilirakis. Yes. Mr. Anderberg. But I think right now it is tough to say there are impediments because of what is taking place the last year and a half, quite frankly, the change in tax policy, the change in regulatory, the trade situation. We are going full blast right now, and I don't see where there is an impediment for manufacturing now solely, except for the lack of people. Mr. Bilirakis. Good. So, you recommend we focus on the workforce issue? Mr. Anderberg. I think the workforce is probably the most important thing that Congress could work on to help us. Again, allowing us to keep our capital, the money we earn--I don't wake up in the morning and think how I am going to spend my money on a boat or something else. I think about how I am going to improve my operation, what I am going to do to help my people, grow my business. That is what we do with our money. And I just want to thank you, thank Congress and this administration for allowing that to happen. Everyone is investing again. It is incredible. Mr. Bilirakis. Very good. Mr. Paradowski, any more besides the workforce issue? Any other impediments? Mr. Paradowski. Absolutely. I often give my four legs of the stool that drive private sector growth speech. So, maybe I will inject it right now. Logistics, energy, workforce, although I wasn't supposed to say that word, and commerce- friendly government. So, it is really the economic, how friendly an environment as far as the government. So, I will use a real-life, real-time example, Foxconn making its investment in the southeastern part of Wisconsin. Their focal points were those three things: logistics, being in proximity to Milwaukee and Chicago, two international airports; energy; workforce is certainly a thing, but the economic environment that the government created in the State of Wisconsin specifically for them to come there and compete. Really, the argument, or maybe the fundamental difference in a lot of the folks in this room is, the sun rises in the East and free markets do what they do. If you can't compete--I will cite something that Mr. Stettner said--highest tech, not the lowest cost. Maybe there are some markets where you can be that, but I know that if I wanted to go into the 4K LED TV market, if I can't find a way to make one for $350 for a 50- inch, I don't have a product. Markets do what markets do. And as a global economy and the U.S. role in that, we have to compete on a cost and performance basis or else we go out of business. Companies go out of business every day. And those are the four key things. The impact of tax reform is a real impact. Look at GDP growth. Anybody who says that tax reform didn't have an impact is denying a key factor of GDP growth. But one of the things that is a parachute on the car right now is certainly workforce, but you asked me not to talk about that. The regulatory environment, government needs to be an allied partner. If government is really focused on helping the private sector, changing the educational system in K-12, so that many pathways are equally valued, that will go a long way. I don't want to go down this rabbit hole, but legalized immigration I think is a big piece. Half of our workforce is in the last trimester of their career, between 50 and 65. And we need to add bodies. GDP is a function of output and efficiency, GDP growth, and we need to add workforce. We need to add efficiency. Mr. Bilirakis. Very good. Ms. Moyers? Ms. Moyers. I think I am going to sound like a broken record, but I think that the bottom line is just that the workforce is our biggest issue. Of course, personally, in our company we have had cash flow issues in the past. We are not having them right now because of the current climate, because of the tax reform, because of deregulation. And I think more of that is going to be helpful. I guess the only thing that I can think of is making it cheaper for businesses to run and do the things they do, so anything that is cost saving to us. One of the biggest expenses we have had in the past few years has been healthcare costs. We cover healthcare for our employees. They pay a very small percentage, and we don't want to make them pay more. And we have no intention of taking it away, no matter what it costs us, because we feel it is very value-added to our employees and it is part of the reason they stay with us. So, that is one of the things, that that rising cost is a big burden for small business owners. Mr. Bilirakis. All right. Thank you. I have a couple more questions, but I will yield back. But thank you very much for that information. Thank you. Mr. Latta. Thank you very much. The gentleman yields back. And looking down the dias here, there are no other members wishing to ask questions. First of all, I want to thank all of the witnesses for being with us today, for giving your testimony, taking your time away from your businesses to be with us. And it is great to know that it is not just an issue in northwest Ohio or Ohio; that the No. 1 issue out there is employees. And all the work that you all are trying to do, from benefits to making sure that you are investing in people out there for 2 to 3 months to get them out there. So, I really appreciate you all being here. Before we do conclude, I want to make sure that the following documents are submitted for the record by unanimous consent: the report by Mr. Stettner; also, the earlier document that the gentlelady from Illinois submitted that was accepted. [The information appears at the conclusion of the hearing.] Mr. Latta. And pursuant to committee rules, I remind members that they have 10 business days to submit additional questions for the record. And I ask that witnesses submit those responses within 10 business days from the receipt of the questions. And so, without objection---- Ms. Schakowsky. Mr. Chairman, if I could say just something? Mr. Latta. Oh, the gentlelady. Ms. Schakowsky. So, Mr. Stettner, in your written statement you talked about apprenticeship and vocational training and how that has dwindled a bit. But you also said--and I think this came up--that there is a generation who experienced industrial decline, who are telling their children to shun factory work. And I agree that, in part, it is a marketing approach to young people. Mr. Paradowski, you talked about careers, that these really are careers. And I also think that we need to encourage women to understand that this is a great opportunity for women to participate and get more money; that more diversity in every way is important. And so, I think that we need to help with the marketing. And maybe, Mr. Stettner, this is part of a manufacturing strategy, that the Federal Government, along with the private sector, can participate in, to make sure. I think some people of a generation ago think about dirty factory floors and kind of nasty work, and we have to help change that image, so people see this as a lifelong career choice. So, I just wanted to add that. Mr. Latta. And again, as we have been hearing from all the members here on the committee and from our witnesses, manufacturing has changed out there. And I know that I was in a plant not too long ago and asked a gentleman running a CNC machine how long it took him to learn it. He said, ``I'm still learning it.'' He had been there a year. A lot of folks don't realize how much computerization is in plants today, and it is. It is looking at everything from guidance counselors to principals---- Ms. Schakowsky. Right. Mr. Latta [coninuing]. To making sure that economic development directors, going right down the entire line, right down to the student, getting them out there to see what is there and making that investment. So, again, we really appreciate you all being here today because this is really important to this economy. It is vital to this nation. So, we appreciate you being here today, and thank you for your testimony. And with that, this subcommittee will stand adjourned. [Whereupon, at 11:45 a.m., the subcommittee was adjourned.] [Material submitted for inclusion in the record follows:] [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] [all]