CRI Focus Areas

Reviving Delaware Manufacturing

Dace J. Blaskovitz & Dr. John E. Stapleford | 10/12/2015

This article originally appeared on on October 11, 2015, and in the News Journal October 12, 2015.
Despite their coordinated public relations splash on The News Journal’s Opinion pages, both Sen. Coons and Gov. Markell demonstrated a surprising lack of knowledge on the subject of manufacturing.
Current currency challenges aside, America can be attractive when competing for global manufacturing jobs.
The country-decision, where to place a world-class manufacturing facility, is most times driven by energy costs and labor.
These days, the United States is energy independent. Although, Uncle Sam does not offer the cheapest workers, we do bring some economic certainty and a deep talent pool. In turn, auto plants do get built in the U.S.
Made in America is a value-added sales tool.
But at the state level, it’s a story of the Haves and the Have Nots. Right to Work laws are a prerequisite to attracting manufacturing jobs. Virtually all of the 25 states with competitive worker rules are growing.
Delaware is not a Right to Work state. The Boxwood site continues to sit empty. Our growth remains weak, below most in the region.
Of particular note, Right to Work does more than demand market rates on wages. It also eliminates work stoppages, caused by labor, which are the biggest single fear to most manufacturers.
Delaware also can not compete on the price of energy. Logically, many businesses that actually produce something are energy eaters. Delaware's green initiatives, like the half-billion-dollar gift to Bloom Energy mandated by state government and paid for by Delmarva Power customers, has helped raise First State industrial electric rates 35 percent above the nation, and even higher than those pro-manufacturing states in the south.
Furthermore, any entity considering relocation completes a rigorous due diligence process. In the somewhat recent past, the business friendly CATO Institute moved its rating of the Markell Administration from a "D" to a "F." The downgrade from bad to worst ties directly to Dover raising taxes in a recession, when businesses were openly struggling.
History suggest, government that fails fiscal common sense is another deal-killer.
So will that hypothetical company that might come to Delaware be able to hire and grow?
The federally required NAEP test shows roughly two-thirds of the Delaware public school graduates are functionally illiterate. And yet, Delaware is the 10th-highest spender on education.
Looking forward, an enlightened campaign from the elected that embraces Right to Work, a balance to environmental issues, financial responsibility and a public school overhaul would be more in line with the data and the wonderful opportunity that manufacturing represents.

Dace J. Blaskovitz & Dr. John E. Stapleford are the directors of the Center for Economic and Policy Analysis at the Caesar Rodney Institute.


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