‘Buy American’ policies are good for Pennsylvania | Opinion
American manufacturing has been in decline for decades, with the federal government playing a frustrating role in its demise.
“Buy American.” It sounds like a familiar bumper sticker, like a sign you see in store windows.
Until now. Five days into his term, President Joe Biden signed an executive order requiring federal contracting and procurement come from “American made goods by American workers and with American-made component parts.” The executive order takes substantive steps to close loopholes in existing trade agreements that have long rendered so-called “Buy American” provisions ineffective, while strengthening cross-agency oversight and enforcement.
How well this all works hinges on the enforcement, which is long overdue.
American manufacturing has been in decline for decades, with the federal government playing a frustrating role in its demise. The federal procurement process often leans to the lowest bidder, regardless of country of origin or quality of product. Americans pay the price when this happens. According to an Economic Policy Institute study, every $1 million spent on the manufacturing of durable goods — products that bring value over a long period as opposed to single-use or consumable goods — creates 1.8 direct jobs and 16.5 indirect jobs, one of the highest multipliers of any industry.
Indifference to enforcing Buy American policies has a substantial impact on the industry in which I work: U.S. hydropower manufacturing, which has historically played an important role in Pennsylvania’s economy and arguably powered the industrialization of the United States. The federal government owns and operates the dams that generate approximately half of the country’s hydroelectric power; its purchasing decisions shape the present and future of an industry that produces critical infrastructure.
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Today, the power-generating machinery in dams owned by the American taxpayer are often built by workers in the lowest-cost manufacturing regions in the world. When turbines and generators need upgrades or full replacements, many of these multi-million-dollar contracts do not benefit highly skilled welders and machinists in the United States. President Biden’s executive order, if strictly enforced, would begin to roll back decades of bad policies.
Congress should strengthen the executive order by including Buy American provisions in infrastructure or other legislation.
Last week, a bipartisan group of Senators reintroduced the Build America, Buy America Act. This legislation requires that federal infrastructure projects source products made in the United States. Bill sponsor Senator Sherrod Brown (D-OH) said, “It’s simple: American tax dollars should go toward American-made projects that support American jobs. Period.” Enacting such a bill or including it in the infrastructure package currently being debated in Congress would sharpen the teeth of existing Buy American laws.
Building for and buying from America can have ancillary benefits — ideally, employing the skilled workers who build these cutting-edge machines in the United States and so earn good middle-class wages while contributing to the clean energy economy.
Pennsylvania stands to benefit from Buy American laws because our commonwealth has been a hotbed for manufacturing, especially hydropower, for 150 years. At my company, Voith Hydro, our York-based U.S. headquarters traces its roots back to the 1870s, when S. Morgan Smith began producing hydraulic turbines not far from where my office currently sits. Today, we build hydroelectric turbines and generators installed nationwide.
However, decades of failure to follow the principles of Buy American has whittled the U.S. hydropower industry to relying on us — one company with a U.S.-based engineering and manufacturing facility capable of building the turbines and generators required for projects large and small. Put simply, America has abandoned its leadership in a vital component of the global clean energy economy.
President Biden won Pennsylvania — and the presidency — on a message of building back better. It’s a recognition the country must rebuild after the pandemic. It cannot do so by going back to a status quo that left many Americans behind. The Buy American executive order is a strong start, alongside the investments in clean energy outlined in Biden’s infrastructure bill. The President – and Congress - need to follow through so Pennsylvania’s workers reap the benefits.
No more bumper stickers. We need “Buy American” policies that actually work.
Stanley J. Kocon is president and CEO of Voith Hydro Inc., based in York, Pennsylvania. Voith Hydro designs, manufactures and installs turbines, generators and automation technology for hydropower facilities.