Labor and Employment

A group of former political and military leaders is urging the Senate to ratify the United Nations’ Convention of the Law of the Sea to kickstart U.S. deep-sea mining efforts, The Wall Street Journal (subscription) reports.

What’s going on: A draft letter seen by the Journal and signed by 331 individuals, including former Secretary of State Hillary Clinton and former Secretary of Homeland Security Michael Chertoff, calls “on Senate leaders to ratify the treaty in a bid for the country to stake its claim over areas of international waters where minerals such as cobalt and nickel, considered critical for the energy transition and in defense applications, can be sourced.”

• The treaty, which the U.S. recognized after it went into effect in 1994 but never ratified, is an international agreement governing the use of ocean resources.

Why it’s important: The treaty’s governing body, the International Seabed Authority, meets next week in Jamaica to determine “the final parts of the mining code—the set of laws and regulations that will eventually govern seabed mining. … As a nonvoting member, the U.S. has no say on laws pertaining to the seabed and also can’t be awarded exploration contracts to mine the seafloor in international waters. China currently has five.”

A groundswell: Deep-sea mining is gaining political support.

• Earlier this month, Reps. Carol Miller (R-WV) and John Joyce (R-PA) introduced a measure in support of it.
• “It’s vital to our security and economic interests that the [China]-controlled monopoly on these materials is broken,” Rep. Joyce said.

Manufacturers are committed to providing employer-sponsored health insurance to their workers, the NAM told Congress late last week—and that’s why any changes made to the Employee Retirement Income Security Act of 1974 should facilitate rather than hamper those offerings.

What’s going on: “ERISA underpins manufacturers’ ability to provide health insurance to their employees,” NAM Vice President of Domestic Policy Charles Crain said in response to a call by the House Committee on Education and the Workforce majority for comments on how to improve ERISA as the law’s 50th anniversary nears.

• “The law allows manufacturers to provide uniform benefits to workers located across multiple states, and to tailor those benefits to meet the unique needs of their workforces.”

​​​​​​​Why it’s important: Manufacturers have continued to offer high-quality health care plans to their employees—even absorbing cost increases in recent years to keep premiums affordable—but they “increasingly find their efforts to be responsible stewards of their health plans undermined by the complexities, bureaucracy and ineffective design of the broader health care system,” Crain told the committee.

What should be done: It is ERISA’s federal preemption of state and local laws that allows manufacturers to offer uniform health benefits, Crain continued, and that preemption must be preserved.

• “Eroding or eliminating preemption would make it significantly more difficult for manufacturers operating in multiple states to offer their employees health insurance because the manufacturer would be forced to comply with cumbersome and potentially conflicting state-based rules, a costly and untenable situation,” he said.
• In addition to maintaining ERISA preemption, Congress should seek to “make health care data more accessible and user-friendly for employer plan sponsors,” and reduce regulatory burdens on employers.
• Given that pharmacy benefit managers contribute to the increasing costs of providing employer-sponsored health care, the NAM also continues to call for PBM reform to increase transparency into these underregulated actors.

In his State of the Union address Thursday, President Biden rightly celebrated manufacturing’s accomplishments—but he “missed the mark in several key areas,” according to NAM President and CEO Jay Timmons.

What happened: President Biden has reason to be proud when it comes to certain manufacturing-critical pieces of legislation, Timmons said, and the president touched on these in his speech.

• “On my watch, federal projects like helping to build American roads, bridges and highways will be made … creating good-paying American jobs,” President Biden told the audience, referring to the NAM-supported Bipartisan Infrastructure Law. And “[t]hanks to my CHIPS and Science Act, the United States is investing more in research and development than ever before.”
• The NAM has been a vocal supporter of CHIPS, which has supported large and small businesses all along the supply chain through an infusion of funds to boost much-needed domestic semiconductor production.
• And the president stood strong with the people of Ukraine and in defense of democracy, two areas in which the NAM has been consistent and unwavering in its own support. “Overseas, Putin of Russia is on the march, invading Ukraine and sowing chaos throughout Europe and beyond. … But Ukraine can stop Putin if we stand with Ukraine and provide the weapons it needs to defend itself. That is all Ukraine is asking.”

No new taxes: But the president also laid out some wrongheaded plans for America, manufacturers and the economy, the NAM said, such as his push to raise taxes on manufacturers.

• “If the cost of manufacturing in America is driven up by his agencies’ continued regulatory onslaught and a successful push to raise taxes, investment will be driven overseas and Americans will be driven out of work,” said Timmons, who appeared on Bloomberg’s “Balance of Power” ahead of the speech to discuss manufacturing priorities.

Protect U.S. innovation, competitiveness: In addition, the Biden administration’s push to invoke so-called “march-in” rights—which would allow it to seize the patents of any innovations it deems too highly priced in the event those patents had been developed in any part with federal money—would “rob Americans and the world of future cures and chill research into new breakthroughs across the manufacturing industry,” Timmons continued.

• “And if President Biden continues to heap blame on pharmaceutical manufacturers, rather than reining in pharmacy benefit managers with cost-saving reforms, Americans and their employers will continue to endure rising health care costs.”

What should happen: The president and manufacturers in America “share a profound commitment to democracy and to the values that have made America exceptional,” Timmons went on.

• A surefire way to restore faith in the democratic system is for Democrats and Republicans to prove it still works—“by delivering smart policies for the American people and by bolstering the industry that is the backbone of our economy and improves lives for all.”

The Securities and Exchange Commission has approved new climate disclosure requirements that have been in the works for the past two years. Changes made to the rule represent progress for manufacturers—though the industry will still face new cost burdens, the NAM said Wednesday night.

What’s going on: The SEC voted Wednesday in favor of requiring public companies to disclose greenhouse gas emissions and other climate-related information. Thanks in part to ongoing NAM advocacy—which Law360 (subscription) covered this week—the agency dropped its onerous, unworkable Scope 3 emissions mandate.

• That provision would have forced public companies to divulge information about emissions coming from anywhere in their supply chains—including from small and family-owned businesses.

Heeding the NAM: “The NAM demonstrated for the SEC the practical realities of such a sweeping proposed rule, encouraging the SEC to make significant changes to remove inflexible and infeasible mandates, require disclosure only of material information and protect small manufacturers from the impact of these requirements,” NAM President and CEO Jay Timmons said following the vote.

Key changes: In addition to the Scope 3 change, the SEC exempted smaller public companies from Scope 1 and Scope 2 emissions reporting and delayed the rule’s effective dates. The final rule also is more narrowly focused on so-called “material” information (data investors need to make informed decisions) than what had been proposed previously.

Keeping a close watch: The final rule “remains imperfect,” Timmons continued. “[A]nd it remains to be seen whether the rule in its entirety is workable for manufacturers.”

• “The NAM remains committed to ensuring the SEC acts within its statutory authority, prioritizes flexibility and provides much-needed guidance—just as we are committed to providing leadership in addressing environmental challenges. This is why the NAM is keeping all options on the table as we evaluate the rule’s potential impacts on the manufacturing sector.”

The NAM and seven association partners have filed suit against the Environmental Protection Agency to challenge the office’s overly stringent, recently finalized rule on particulate matter, or PM2.5, the NAM said Wednesday.

What’s going on: The eight groups filed suit in the D.C. Circuit to push back on the EPA’s National Ambient Air Quality Standards rule, which last month it lowered from 12 micrograms per cubic meter of air to 9, a 25% reduction and a stifling burden on manufacturers, the NAM said.

• “In pursuing this discretionary reconsideration rule, the EPA should have considered the tremendous costs and burdens of a lower PM2.5 standard,” said NAM Chief Legal Officer Linda Kelly. “Instead, by plowing ahead with a new standard, the agency not only departs significantly from the traditional NAAQS process, but also gravely undermines the Biden administration’s manufacturing agenda—stifling manufacturing investment, infrastructure development and job creation in communities across the country.”
• Participating in the suit with the NAM—which has repeatedly urged the EPA against overtightening the standard—are the American Chemistry Council, the American Forest & Paper Association, the American Petroleum Institute, the American Wood Council, the U.S. Chamber of Commerce, the National Mining Association and the Portland Cement Association.

Why it’s important: If it’s enacted, the stricter PM2.5 standard would cost businesses and the U.S. economy huge sums, hampering company operations and job growth and forcing tough choices on states and towns nationwide.

• The total cost of complying with the new acceptable concentration level could be as much as $1.8 billion, according to the EPA’s own estimates—and that number could go up.
• What’s more, it would make the U.S. less competitive globally. “Europe’s current PM standard is 25; China’s is 35,” NAM Managing Vice President of Policy Chris Netram told the House Energy and Commerce Subcommittee on Environment, Manufacturing and Critical Materials last month. “If we want the next manufacturing dollar to be spent in America rather than abroad, a standard of 9 is simply not feasible.”

NAM in the news: The New York Times (subscription) covered the lawsuit.

In the heat of Arizona’s “Silicon Desert” and surrounding communities, the future of America’s global competitiveness and climate goals aren’t just being forged—they also hang in the balance.

Last week for the first time in 2024, the NAM brought its Competing to Win Tour to Arizona, and that stark contrast between the status quo and the probable future was on display in Phoenix at global semiconductor equipment manufacturer Benchmark and small manufacturer Valley Forge & Bolt and at Resolution Copper in Superior.

• NAM President and CEO Jay Timmons, Manufacturing Institute President and Executive Director Carolyn Lee—who leads the NAM’s 501(c)3 workforce development and education affiliate—and Arizona Chamber of Commerce & Industry President and CEO Danny Seiden met with local manufacturers to gain their perspective and insights.

Why it matters: The Biden administration and Congress have secured key measures to bolster manufacturing in the U.S., including the NAM-championed CHIPS and Science Act and tax credits in the Inflation Reduction Act to manufacturers investing in advanced production and energy projects. But raw material, workforce and tax and regulatory policy challenges threaten to undermine policy aspirations.

Silicon Desert expansion: With the CHIPS and Science Act poised to transform the sector, Benchmark President and CEO Jeff Benck and Executive Vice President and Chief Operating Officer Dave Valkanoff led the tour of their state-of-the-art Phoenix facility.

• In a good spot: Benchmark is well-positioned for the coming growth in semiconductor equipment demand. It is focused on securing its workforce and navigating a complex regulatory landscape to maximize the opportunity.
• Workforce woes: Even with the NAM and the MI’s Benchmark-supported Creators Wanted campaign boosting the industry’s image and the MI’s FAME initiative training thousands of technicians, finding skilled labor remains the top challenge. Benchmark advances earn-and-learn programs and partnerships with Arizona State University and community colleges to help fill the pipeline, actions that, according to Lee, “can help change the game.”
• Red tape delays: Regulatory hurdles pose obstacles. Benchmark seeks streamlined permitting and sensible rules to maintain their global edge.
• Bullish outlook: Benck is optimistic about the future of U.S. manufacturing and semiconductor demand. Investments in people and technology position the company well to deliver the next generation of innovation.

Taxes and immigration: The NAM’s return visit to Valley Forge & Bolt, after a stop last year with Sen. Kyrsten Sinema (I-AZ), shone a spotlight on the real-world impact of stalled tax policy and the urgent need for reform. 

• Valley Forge & Bolt saw record sales in 2023 thanks to 2017 tax reforms boosting its equipment upgrades. Now, with provisions like full capital investment expensing stalled in Congress, orders have slowed.
• CEO Michele Clarke and COO Bret Halley made the case for R&D expensing, interest deductibility and a return to full capital investment expensing. Without these, they said, job growth and America’s manufacturing competitive edge are at risk.
• Skilled workers needed: Despite its success, Valley Forge says finding skilled workers is a constant struggle. Immigration reform is a must to secure the right talent pipeline, said Clarke. “Did you notice our engineers? Most of them are under 30 because we’re snatching them right out of college,” added Clarke. “The engineering talent in this country is dwindling, and we’re not authorizing enough green cards. I, myself, was a green card holder before I became a citizen.”

Policy roadblocks: The NAM’s visit to Rio Tinto’s Resolution Copper site highlighted the urgency of permitting reform in the face of critical mineral needs.

• Copper’s critical role: Copper is essential for clean energy. Electric vehicles, solar power grids and wind turbines all demand huge quantities. Yet, the U.S. remains heavily reliant on imported copper, jeopardizing progress.
• Massive potential: The domestic solution lies within the stalled Resolution Copper mine. With its potential to supply 25% of U.S. copper demand, it’s poised to be a key piece of the puzzle.
• Project in limbo: Despite a 350-strong workforce modernizing and maintaining the mine, permitting delays stifle the project’s full impact.
• Sustainable practices: “Resolution Copper is the future of eco-conscious mining,” said NAM Managing Vice President of Brand Strategy Chrys Kefalas, who toured the site. “Their team innovates sustainable practices, leads in water conservation and even supplies 7 billion gallons of water to Arizona farms. And what is more, it isn’t just the facts of the matter or what you saw that drives this point home, but the people who have worked on the site for years make all that clear with the pride they have about the project and their determination to see Resolution Copper through to making lives better for everyone.”
• Jobs and growth: Led by President and General Manager Vicky Peacey, the project promises to contribute $1 billion annually to the economy and more than 1,500 Arizona jobs. “This is about people, jobs and supply chains; and it’s also about realizing clean energy ambitions at the speed and scale that climate goals demand,” said Kefalas.

The bottom line: “The future of U.S. manufacturing might hinge on these contrasting stories. Are we a nation that champions innovation, attracts and keeps the brightest here, supports our manufacturers and tackles climate goals with homegrown solutions, or one that stalls progress in its own backyard,” said Timmons.

• “Arizona is at the epicenter of American manufacturing’s next chapter, and with smart policies and fewer unforced errors at the federal level, we can clear the runway for growth,” added Seiden.

Obesity is costing U.S. companies and their workers hundreds of billions of dollars a year, according to a new report, the findings of which are in line with those of a 2023 NAM report on employer-sponsored health care.

What’s going on: “Obesity and overweight are estimated to have caused a staggering $425.5 billion in economic costs to U.S. businesses and employees in 2023, according to a report released by GlobalData Plc, a leading data and analytics company,” MarketScreener reports.

• The findings of the GlobalData report, “Assessing the Economic Impact of Obesity on Employers: Identifying Paths Toward Work Force Health and Well-Being,” are consistent with those of a recent NAM report, “ Manufacturers on the Front Lines of Communities: A Deep Commitment to Health Care ,” which notes significantly higher health care costs for individuals who are obese or carry excess body weight.
• “These additional costs account for $170 billion to $200 billion in annual spending in the U.S., making [these conditions] a significant cost for employers,” according to the NAM report.

Why it’s important: Obesity can make workers more prone to absenteeism (taking time off) and presenteeism (being less productive while on the job), both of which come with a significant price tag, according to the reports.

• Some 46.1% of manufacturer respondents to an NAM survey said obesity affected their workplace productivity and employees’ ability to complete their job functions.
• Absenteeism costs employers $82.3 billion each year, with presenteeism accounting for an additional $160.3 billion, according to the GlobalData report.

Impact on manufacturing: The economic impact of excess body weight on manufacturing is the fourth highest of the seven industries examined by GlobalData, at $44.5 billion annually.

What can be done: Manufacturers care deeply about ensuring their employees have access to high-quality, affordable primary care providers who can help employees manage their weight through personalized interventions like diet, exercise, behavior modification, medications and surgery.

The last word: “Manufacturers support efforts to continue to destigmatize these chronic health challenges and approach them like any other condition so that workers and their families feel comfortable choosing from the full suite of available treatment options in order to live healthier and more productive lives,” said NAM Vice President of Domestic Policy Charles Crain.

Washington, D.C. Today, the National Association of Manufacturers kicked off its 2024 Competing to Win Tour in South Carolina. NAM President and CEO Jay Timmons and NAM Board Chair and Johnson & Johnson Executive Vice President and Chief Technical Operations & Risk Officer Kathy Wengel visited Milliken & Company and Springs Creative Products Group to hear from team members on the shop floor on the issues impacting their businesses.

“Manufacturers are fueling the U.S. economy and driving innovation to create a better future for everyone. We’re here in South Carolina to showcase the people and stories behind our industry, and to translate their perspectives into action that will make our industry and country stronger. Building these strong relationships beyond Washington, D.C., in the cities and states driving our sector deepens our understanding of regional challenges and reinforces the NAM as the leading voice representing all manufacturers, large and small,” said Wengel.

Tomorrow, Timmons will deliver the 2024 NAM State of Manufacturing Address, in which he will provide the industry’s assessment of manufacturing in the United States, as candidates from all sides work to claim the manufacturing vote in the 2024 election.

“For more than a decade, the annual NAM State of Manufacturing Address has focused the nation’s attention on the industry that is the backbone of the American economy, and we are on this tour to hear from the people making decisions on how to grow their businesses every day. Lawmakers from all parties want to claim they stand with manufacturers, but we judge them not by their words but by their deeds. So manufacturers across America have a message for Washington: we are here to hold all candidates and leaders accountable. It takes leadership from both parties to ensure manufacturers have the conditions to thrive and invest in communities across the country. If they fail to act, they will fail the 13 million people who make things in America,” said Timmons.

Timmons will also highlight the challenges facing manufacturers in America and the urgent need to enact a competitiveness agenda that addresses pressing issues, including the looming tax hikes on small manufacturers, the need to expand trading opportunities, the regulatory onslaught from federal agencies, the failure of Congress to address immigration reform and the threats to our energy security and supply chains.

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.85 trillion to the U.S. economy annually and accounts for 53% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.

Washington, D.C. – Following House passage of the Tax Relief for American Families and Workers Act of 2024, National Association of Manufacturers President and CEO Jay Timmons and Ketchie President and Owner and NAM Small and Medium Manufacturers Group Chair Courtney Silver released the following statement:

“Manufacturers thank Speaker Johnson and Chairman Smith for their leadership in passing the Tax Relief for American Families and Workers Act—and the bipartisan work in the House and Senate to secure progress for America’s manufacturing workers,” said Timmons.

“Manufacturers are now counting on the Senate to act quickly to restore these provisions that are absolutely critical to strengthening America’s competitiveness and growth of manufacturing in America,” Timmons added. “We cannot afford to wait. The cost of delay or inaction will be measured in lost jobs and slower wage growth, along with investment ceded to other countries. Passing this legislation, however, will ensure that small manufacturers, who are the backbone of communities and foundation of America’s supply chain, can continue driving our nation forward.”

“When key tax provisions expired, it wasn’t just businesses like Ketchie that felt the pinch—it was our ability to support and create jobs that took a hit,” said Silver. “I thank Speaker Johnson and Chairman Smith for their efforts to ensure passage of the Tax Relief for American Families and Workers Act. This isn’t just about numbers on financial statements; it’s about taking care of people who make things in America and work at small manufacturing companies across our country.”

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.85 trillion to the U.S. economy annually and accounts for 53% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.

Washington, D.C. – Ketchie President and Owner and National Association of Manufacturers Small and Medium Manufacturers Group Chair Courtney Silver released the following statement calling on Congress to advance key tax priorities included in the Tax Relief for American Families and Workers Act of 2024.

“There is so much at stake for small and medium-sized manufacturers as Congress debates pro-growth tax policy, which is why I strongly support the Tax Relief for American Families and Workers Act,” said Silver. “When Congress allowed immediate R&D expensing, interest deductibility and full expensing to expire, it created a higher tax bill and tremendous uncertainty for businesses like mine. The loss of these provisions directly impacts our ability to invest in new technology, to purchase equipment and to create jobs. Nearly 90% of manufacturers share similar concerns about their higher tax burden, and if left unaddressed, our companies and our teams will have a harder time securing an edge over our global competitors.

“This legislation restores those commonsense provisions, which would be a big jolt for manufacturers of all sizes. Passing this law would give companies like ours the certainty needed to plan for growth and more investments in our future.”

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.85 trillion to the U.S. economy annually and accounts for 53% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.