Critical Review of President Obama's 2014 State of The Union Address

United States Specialized Workforce

On January 28, 2014, President Barack Obama gave his State of the Union Address in which he drew attention to many of the issues he would seek to resolve as president. He was able to do this by highlighting many issues currently facing the American people including the Medicare Bill as well as reducing the national deficit. However, perhaps the most critical point President Obama would make in his speech would be in regards to the creation of manufacturing innovation institutes within the United States. These plants would be learning institutes which would teach those within the manufacturing industry certain skills which would set them apart from foreign competition. According to President Obama, this would greatly decrease the deportation of manufacturing jobs and dramatically lower the unemployment rate in the U.S. However, the plan of the Obama Administration will not be able to use these plants to significantly lower the unemployment rate because; the additional training given to workers by these plants raises their earning potential making them less desirable to manufacturing companies and these plants would provide an influx of specialized workers into certain industries thereby saturating the market leading to even higher unemployment. Therefore, an attempt to lower unemployment rates in the United States would be better served by a plan in which sanctions were places on industries which ship their manufacturing labor to oversea plants.

In order to fully understand this issue it is important to closely analyze the text of President Obamas address and make evident his reasons for approving said plan. President Obama began this portion of the speech by providing some groundwork in regards to the importance of lowering unemployment in the manufacturing industry when he stated, “Listen, China and Europe aren't standing on the sidelines; and neither should we. We know that the nation that goes all-in on innovation today will own the global economy tomorrow. This is an edge America cannot surrender. Federally-funded research helped lead to the ideas and inventions behind Google and smartphones. And that's why Congress should undo the damage done by last year's cuts to basic research so we can unleash the next great American discovery.” (State of the Union, 6) Obama used this vague statement to relay the importance of his upcoming message, however much more important were the strategic points of action he espoused upon which would help these manufacturing institutions to grow and prosper. One important aspect of this plan that President Obama addresses is his hope to partner these plants, like the newly opened one in Youngstown, Ohio, with certain federal industries in order to provide business to the newly opened plants. President Obama and these supporters feel that this would allow substantial support to the industry of these plants, thereby enabling their success. Another important tenant of this aspect of President Obama’s State of the Union is a networking plan which would allow these plants to work together to achieve common success. These are just a few factors which the Obama Administration believes will allow these plants to be successful and rejuvenate industrial manufacturing in the United States.

Following the State of the Union Address President Obama gained a wide variety of support for this plan. Supporters of the plan include Senator Sherrod Brown from Cleveland who claims this plan will “put jobs back in America” (Carpenter, 3). Other supporters of this plan have cited its ability to create jobs by coupling it with the manufacturing needs of industries such as the Department of Defense. In addition, President Obama and his supporters have often cited the Youngstown, Ohio plant and its momentous success as justification for the opening of several of these plants throughout high unemployment areas in the U.S. In response to the State of the Union Address, Pennsylvania Legislator Martin Causer explained his delight about the possibility of one of these manufacturing plants being built in his congressional district when he stated “rural areas have the opportunity to be brought back to life by these plants, an influx of manufacturing jobs can do wonders for an area.” (Carpenter, 4). Though correct in their assumption that the opening of these manufacturing plants could have dramatic economic repercussions for an area, the Obama Administration and others who support this plan overlook the extreme ineffectiveness of this plan on a national scale.

Despite the many advantages of the Obama Administration’s aforementioned manufacturing recovery plan highlighted by liberals such as Causer, this plan will not lead to a significant decrease in unemployment rates. The reason for this is that though President Obama's plan has the potential for making the industrial plants successful, this will not correlate to success in decreasing unemployment for U.S. workers. One major reason for this is that the additional training given to workers by these plants raises their earning potential making them less desirable to manufacturing companies. Though the plant in itself provides jobs to those currently employed by the plant, the plants main value according to President Obama lies in its ability to provide skilled American laborers. This comment explains the main issue with this plan as allowing those at the plant to become skilled manufacturers would absolutely not lead to less deportation of manufacturing jobs as most manufacturing jobs are performed by unskilled laborers. Thus the plan of the Obama Administration would not alleviate the deportation of manufacturing jobs as those jobs being outsourced are much more likely to be jobs which could be completed by unskilled workers. Rather, a dramatic increase in skilled laborers would actually lead to an increase in industrial jobs being sent to other nations.

This irony arises from the fact that the most common reason industrial jobs are sent overseas is not because the foreign workforce is more skilled, but rather that they are paid cheaper wages. Therefore, by creating a larger skilled workforce, which according to U.S. laws has to increase their earning potential, President Obama’s main goal in using these plants actually has an opposite effect. Congressmen Tim Ryan expressed his own doubts about the effectiveness of this plan when he stated “by increasing the earning potential of the United States industrial workforce, President Obama is handicapping them” (Skolnick, 2). He would then continue to state “if these plants are to continue to be built and churn out skilled workers jobs will continue to be deported overseas at an alarming rate”. (Skolnick, 2). Congressman Ryan’s fears regarding whether this plan will actually have a negative impact on unemployment rates due to the creation of a large skilled workforce are especially troubling. For example, the United States Department of Labor’s recently released “National Current Employment Statistics” outline a disturbing trend which helps to explain the worries of those such as Congressman Ryan. One such statistical trend is the fact that almost 60% of able unemployed workers towards the end of 2013 were unskilled workers. (DOL) This is important as it shows how a large portion of the unemployment issue arises from the lack of jobs for unskilled workers. This would obviously not be resolved by plants such as that in Youngtown as they hope to introduce a class of skilled workers into an environment which does not need them.

In response to this claim, supporters of the Obama Administration’s plan regarding these factories would argue that by creating this class of skilled workers, they would be providing them with a set of skills which would allow them to escape the 60% unemployed figure of unskilled laborers. However, another set of statistics from the Department of Labor shed a revealing light on whether this method of thinking is actually beneficial to these unemployed workers. For example, another portion of the Employment Statistics shows that less than 4% of skilled labor jobs in the United States were available at any point during the 2013 fiscal year (DOL, 1). This is critical as it shows how plants like the one in Youngstown are creating a class of skilled workers in a market where the need for their labor simply does not exist. Furthermore, the Obama Administration would surely site the plants themselves as an available source of jobs for this newfound skilled labor; however these plants with these government contracts are simply taking business and therefore jobs from other skilled labor factories which currently held these government contracts. This is one issue surrounding the Obama Administration’s plan for factories such as the one in Youngtown, Ohio that is especially troubling.

Another troubling issue which could arise as a result of President Obama’s plan to institute more of these government institution plants is that these plants will provide an influx of specialized workers into certain industries thereby saturating the market leading to even higher unemployment amongst unskilled laborers. That is to say, the increase of skilled workers created by these manufacturing institutions will actually hurt the nation’s economic recovery as far too many skilled manufacturers will be vying for a much larger number of skilled manufacturing jobs. Thereby, by assisting these workers to become better trained this would also allow them to price themselves out of work. Therefore while Obama’s plan would most likely succeed in creating a new class of skilled workers, there are other possible options which could better ensure that this class of skilled workers is able to find consistent work.

Though it is easy to decipher issues within the labor plans of the Obama Administration, a much more challenging task arises from developing a plan which would be effectively in significantly lowering unemployment rates in the United States. One plan of action which would have a significant effect in lowering unemployment rates in the U.S. would be to place monetary sanctions on industrial organizations which ship their manufacturing labor to over sea plants, thus making it cheaper to hire U.S. workers than to outsource labor with the possibility of sanctions. An example of these type of sanctions being effective on a smaller scale is found in the attempts of the state of Pennsylvania to prevent jobs from being sent not only overseas but also to other states. Starting in 2008, the Pennsylvania State Legislator enacted a plan which would not only provide rewards to companies providing manufacturing jobs within the states, but even punishing those who chose to transfer their manufacturing plants outside of the U.S. (Jamieson, 2) This plan is extremely effective in its ability to provide monetary incentives are even sanctions to companies depending on where they choose to place their manufacturing plants. Since its inception, this plan has reached some measure of success, its success being somewhat limited to due to the “lack of sanctioning power available to state legislators.” (Jamieson, 3) This issue however would be severely nullified were it employed by a federal government which carries much more available sanctioning powers.

One major issue which has been raised in response to proposals of these type of sanctions is that it does not acknowledge the difficulties these sanctions would cause to business owners. The major reason business owners seek to higher foreign workers is that they can do so at a considerably cheaper price than that of U.S. workers. Thus many business owners, especially those who own smaller businesses, would argue that this type of plan would levy unfair sanctions on them despite the fact that their business would not be able to survive if they were forced to hire U.S. workers. Therefore while this plan could possibly temporarily alleviate the unemployment problem in the U.S., it could lead to the closure of many small businesses which would eventually lead to even higher unemployment rates. Though this is a major flaw in my proposed plan, it can be easily alleviated by focusing the sanctions on larger corporations which can afford to higher U.S. workers while allowing small business to continue their usual practices. This easy remedy highlight another advantage of my proposed plan as it can be changed or altered according to unforeseen issues or a change in the economic climate. The plan of the Obama Administration meanwhile seeks to flood the workforce with thousands of newly skilled workers without any method of calling them back.

Despite his best efforts, President Obama’s plan to use manufacturing institutions such as the one in Youngstown, Ohio will not significantly decrease unemployment rates in the United States. Though the plants may themselves experience a large measure of success, due to the fact that it is mostly unskilled manufacturing jobs that are being sent overseas, an increase in skilled U.S. workers will not help to effectively end this practice. In fact, if these manufacturing plants are allowed to continue unabated they may even oversaturate the skilled labor market causing even more labor issues within the United States. For these reasons, it is important to remove the focus from short term fixes such as manufacturing institutions and begin to place sanctions on major U.S. industries who continue to have their products made in other countries. This will not only significantly increase the gross national product but also will greatly lower unemployment rates among unskilled workers. Until a presidential administration comes into power who understands the labor needs of the United States large unemployment rates will continue to become a perennial problem.