STEVE INSKEEP, Host:
Some of the nation's manufacturers hope they have passed the worst phase of the late recession. Factories are hiring again. But they remain a much smaller part of the economy than in decades past, which is why President Obama is promoting a manufacturing partnership with businesses and universities.
NPR's Scott Horsley reports on the president's trip to Pittsburgh today.
SCOTT HORSLEY: Coming from the industrial Midwest, President Obama knows the value of factory jobs. From his first days in office, he's been talking about lighting a fire under the nation's factory boilers. Here he is at Georgetown University in the spring of 2009.
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BARACK OBAMA: And, by the way, one of the changes that I would like to see - and I'm going to be talking about this in the coming weeks to come - is once again seeing our best and our brightest commit themselves to making things.
HORSLEY: The president's keen interest in making things is more than just smokestack nostalgia. Economist Jared Bernstein - who until recently led the administration's Middle Class Task Force - notes, on average, pay and benefits in factory jobs are 20 percent higher than those in the service sector.
JARED BERNSTEIN: There's no question in my mind that a stronger manufacturing sector with more employment opportunities is really important for loosening the middle class squeeze and just providing people with better access to better jobs.
HORSLEY: Manufacturers are bouncing back from the recession. Over the last year and a half, factories have recovered nearly 240,000 jobs, making the sector one of the brighter spots in the still-sluggish recovery. But over the longer term, manufacturing's role in the economy has shrunk, from one in four jobs in 1970, to less than one in 10 today.
That's partly the result of foreign competition, and partly the result of productivity gains, which allow modern U.S. factories to churn out more goods with ever-fewer workers.
No one expects to reverse those trends entirely. But Bernstein, who is now with the Center on Budget and Policy Priorities, says the U.S. can support more factory jobs with a little government encouragement.
BERNSTEIN: The government can help plant important seeds to help grow the industry. If you think back to railroads or transistors or the Internet, the government's always played a role in early innovation.
HORSLEY: And that's the goal of the Advanced Manufacturing Partnership that Mr. Obama will announce today. Along with businesses such as Dow Chemical and Proctor and Gamble and universities like Carnegie Mellon, the government hopes to identify opportunities and remove roadblocks to help small and mid-sized factories grow.
The administration wants to channel some $500 million into the effort, with most of that money coming from existing government programs. White House technology adviser Eric Lander insists the administration is not getting into the business of picking winners and losers.
ERIC LANDER: We are not endorsing industrial policy. What this is all about is creating the ecosystem in which private entrepreneurs, private innovators can flourish. That kind of ecosystem, though, does need some public support.
HORSLEY: Proctor and Gamble, for example, has agreed to share software it developed with help from the Los Alamos National Laboratory to reduce manufacturing costs. The partnership also hopes to foster more efficient factory processes and to cultivate advanced materials.
Mr. Obama will continue his push for advanced manufacturing next week when he visits an Alcoa plant in Davenport, Iowa. The plant supplies aluminum to both Boeing and Airbus. And spokesman Michael Belwood says the 123-year-old company has been developing new alloys to make planes lighter, more durable and more fuel-efficient.
MICHAEL BELWOOD: The company is built on the ability to make aluminum and aluminum products better than anyone else, and Davenport's a great example of how we do that.
HORSLEY: Innovation's been good for business. The Davenport plant now employs some 2,000 people, which is more than it had before the recession. Alcoa expects to hire about 80 more within the coming months.
Scott Horsley, NPR News, Washington.
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