Let's make it in America

"Cloud services." "Global delivery." This is the soft terminology of the next frontier for America's economy-killers, brought to you by the International Association of Outsourcing Professionals. It means only one thing: more jobs lost. The organization's Web site says it straight: "There has never been an outsourcing event of this caliber!"

Isn't it time to halt the hollowing of our economy and employ smart policies to rebuild American manufacturing and keep good jobs here? For three decades, American laws that govern business have followed the lure of ever-lower labor costs, cheap debt, weak environmental regulations, and lobbyist-written free-trade pacts. It's the result of a profits-over-people strategy that has caught on like a fad.

It's the underlying contributor to our Great Recession. But it turns out that cheap offshore labor makes for lousy consumers, because people without good-paying jobs can't support our consumption-driven economy.

In Ohio, the effects are well known. Since 2000, our state has lost 391,800 manufacturing jobs to outsourcing. The outsourcing CEOs have made clear that without deliberate action, a steady current of jobs - all kinds of jobs - will continue to stream away from our shores.

In the 1980s and 1990s, we were told that only machining and assembly jobs were heading offshore. Yet in the past five years alone, we lost the jobs of 1 million scientists, software developers, and high-tech researchers.

Those were the jobs we were supposed to keep. But research and development follows the factory floor. In the long term, no economy of our size can be sustained if we don't invest in jobs, build things here, and insist on a level playing field.

The Obama Administration should reject trade pacts - such as those supported by Ohio candidates John Kasich and Rob Portman during their time in Congress - with countries that thumb their noses at workers' rights. It should challenge dangerous currency manipulation wherever it occurs. Both undermine any hope of economic recovery.

America needs a strong industrial policy to rebuild, strengthen, and modernize our manufacturing capacity. We need to get rid of the notion that we can't compete in the global economy. We can compete, and we can win, but we need to think big and act boldly. The future of working people in Ohio depends on it - but businesses do, too.

The Obama Administration has taken steps in the right direction with investments in green technology, an outline of a new manufacturing strategy, and a goal of doubling exports in the next five years. But we need to do more.

We need to double our net exports. If exports rise but imports rise more, as occurred during the past 20 years, our trade deficit and our nation's economic problems will worsen. Congress must come up with the tools and resolve to address China's manipulation of its currency, which is estimated by many economists to be undervalued by about 40 percent.

It would be one thing if China beat U.S. manufacturing on a level field. But the currency imbalance means their products enjoy a 40 percent discount. Mr. Kasich and Mr. Portman haven't helped with their support of trade deals that let companies ship jobs overseas.

We need to pursue with urgency opportunities in green technologies, high-end manufacturing, and infrastructure. Such projects create a virtuous chain of innovation by spurring private investment and spinoff benefits. A relatively small, but key, federal investment in these projects makes the difference. This route to good jobs will rebuild America's middle class.

It's not guesswork. Which countries have fared best in the recession? Germany, which has a strong industrial base and strong exports. And China, which is investing in the technologies of the future. Without massive, immediate U.S. investment to create jobs, according to the Center for Economic and Policy Research, it may take as long as 11 years for the economy to recover the jobs necessary to reduce unemployment to prerecession levels.

Other world powers aren't waiting for us. Last year, China invested $34.5 billion in developing low-carbon energy technology - nearly twice America's level of investment. While we're planning 500 miles of high-speed rail, China has begun construction of 5,000 miles.

Unless something changes, the next big innovations will be made on someone else's workbench in someone else's laboratory, in a place such as China or India. Let's make it happen here instead.

Richard Trumka is president of the AFL-CIO. Joe Rugola is president of the Ohio AFL-CIO.