Inquirer Editorial: Change tax law to entice companies to come home

General Electric has been slowly moving manufacturing jobs from China and Mexico to the United States, and Apple says it will spend $100 million to manufacture Mac computers in this country. That sounds like the beginning of a good trend, but it needs a shove.

Democrats in the last election made campaign promises to pass legislation to eliminate the destructive practice of rewarding businesses for putting Americans on the unemployment line by allowing companies to take a tax deduction for the cost of exporting jobs overseas.

But neither the Senate nor House version of the proposed Bring Jobs Home Act has budged since July. The legislation also gives companies a 20 percent tax break for "inshoring" jobs.

If more companies are going to follow GE and Apple in bringing jobs home, the government must send a clear message that it wants to help them do it.

GE's decision was based on a variety of factors that outweighed the chase for cheap labor, which has sent so many jobs overseas in the last 15 years. The appliance giant found that it could cut shipping time and energy costs while realizing lower labor costs through design efficiencies.

The company was willing to experiment with methods to improve communications among all levels of its production force, from assembly-line workers to engineers. It cut the cost to consumers who buy its water heaters by $300.

GE expects to end this year with 3,600 hourly workers at its Louisville, Ky., facility. Apple's plans are less clear. CEO Tim Cook recently said he would shift $100 million to move Mac computer manufacturing from China to the United States. But he hasn't said where the MAC plant would be located - and this is a small gesture, since most Apple products will still be made in Asia.

Manufacturers, already worried about having their designs stolen, are now seeing their labor costs inch up as third-world economies mature. They're also learning that the American consumer, although wounded by a rough economy, likes to see "Made in America" on products. So U.S. companies already have good reasons to look within.

All those factors make this an opportune time for the government to help with a tax policy that brings jobs home. No doubt this country's 1979 peak of 19.6 million manufacturing jobs is unlikely ever to be seen again, partly because the American worker's productivity keeps getting better.

But if Democrats and Republicans are serious about righting the economy, they need to encourage companies sending jobs offshore to instead expand at home.