Posted 10:09 pm Thursday, February 09, 2012
Make It Easier To Make It At Home
You won’t find many references to reality television in this space, but a fascinating exchange took place on the program “Shark Tank” recently. An inventor chose to miss out on investments in his company, rather than to “outsource” the jobs overseas.
What this says about the larger question of employment — particularly in the manufacturing sector — is that it will take much more than right-to-work laws to bring those jobs home. It will take corporate tax reform and regulatory reform, as well.
As the Washington Times reported, “Donny McCall is an American entrepreneur who firmly believes in the patriotic principle of ‘Made in the United States.’ Mr. McCall developed a product called Invis-A-Rack, a detachable folding cargo rack system for pick-up trucks. Donny McCall scored an opportunity to appear on ABC’s ‘Shark Tank,’ a purported reality television series, where entrepreneurs present their business or product ideas to a panel of five venture capitalists, competing for funding from one or more of them. Mr. McCall was seeking $100,000 in capital in exchange for a 10 percent stake in his company.”
What this says about the larger question of employment — particularly in the manufacturing sector — is that it will take much more than right-to-work laws to bring those jobs home. It will take corporate tax reform and regulatory reform, as well.
As the Washington Times reported, “Donny McCall is an American entrepreneur who firmly believes in the patriotic principle of ‘Made in the United States.’ Mr. McCall developed a product called Invis-A-Rack, a detachable folding cargo rack system for pick-up trucks. Donny McCall scored an opportunity to appear on ABC’s ‘Shark Tank,’ a purported reality television series, where entrepreneurs present their business or product ideas to a panel of five venture capitalists, competing for funding from one or more of them. Mr. McCall was seeking $100,000 in capital in exchange for a 10 percent stake in his company.”
But the panelists urged him to manufacture his product where labor costs (and taxes) were cheaper. It was the most business-savvy move, they said.
“Each of the five venture capitalist passed on the Invis-A-Rack, claiming he did not want to do what it took to take his business to the next level,” the Times reported.
The sad fact is that McCall was completely honorable in wishing to keep jobs in his home state of North Carolina, which suffers from a 10 percent unemployment rate.
McCall can and should be proud of the stand he took: “I take great pride in my country and fellow Americans, whatever their background and history. If you are here in America, I want you working.”
But here’s the other sad fact. The panelists were right, too.
“Each of the five venture capitalist passed on the Invis-A-Rack, claiming he did not want to do what it took to take his business to the next level,” the Times reported.
The sad fact is that McCall was completely honorable in wishing to keep jobs in his home state of North Carolina, which suffers from a 10 percent unemployment rate.
McCall can and should be proud of the stand he took: “I take great pride in my country and fellow Americans, whatever their background and history. If you are here in America, I want you working.”
But here’s the other sad fact. The panelists were right, too.
Companies outsource to improve their bottom line. For many startups (and established companies, as well), this can mean the difference between solvency and bankruptcy.
Labor costs are certainly a part of this, but by no means the only factor. The availability of raw materials (at or closer to their source), freedom from regulation, and access to workers with skills many Americans no longer possess are also factors.
But even if Invis-A-Rack production was moved overseas, jobs would still be created at home (installation, warehousing, marketing, shipping).
But the real answer, of course, is to make America more manufacturer-friendly.
Labor costs are certainly a part of this, but by no means the only factor. The availability of raw materials (at or closer to their source), freedom from regulation, and access to workers with skills many Americans no longer possess are also factors.
But even if Invis-A-Rack production was moved overseas, jobs would still be created at home (installation, warehousing, marketing, shipping).
But the real answer, of course, is to make America more manufacturer-friendly.
To begin with, American companies pay the highest corporate tax rate in the world. That must be fixed.
“The goal of comprehensive tax reform should be to renew economic growth through lower marginal tax rates on individual and corporate income, eliminating taxes on saving and investment, and getting the tax code out of the business of picking winners and losers in the market,” says Curtis DuBay of the Heritage Foundation. “Tax reform should pay particular attention to reducing the corporate tax rate significantly and switching to a system that taxes businesses only on the income they earn in the U.S.”
And regulatory reform should follow.
There must be a balance, of course, between workplace and environmental safety, and the freedom to do business. But for far too long the federal government has erred on the side of regulation, rather than freedom. The EPA classifying milk as “oil,” and therefore a toxic substance in the case of spills, is just one example.
We can do better than that. We can do better for would-be manufacturers such as Donny McCall. We can make it easier for him to do business at home.
“The goal of comprehensive tax reform should be to renew economic growth through lower marginal tax rates on individual and corporate income, eliminating taxes on saving and investment, and getting the tax code out of the business of picking winners and losers in the market,” says Curtis DuBay of the Heritage Foundation. “Tax reform should pay particular attention to reducing the corporate tax rate significantly and switching to a system that taxes businesses only on the income they earn in the U.S.”
And regulatory reform should follow.
There must be a balance, of course, between workplace and environmental safety, and the freedom to do business. But for far too long the federal government has erred on the side of regulation, rather than freedom. The EPA classifying milk as “oil,” and therefore a toxic substance in the case of spills, is just one example.
We can do better than that. We can do better for would-be manufacturers such as Donny McCall. We can make it easier for him to do business at home.
