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FOR IMMEDIATE RELEASE: April 29, 2004

SCHUMER: NEW PROPOSAL COULD STOP NEW YORK'S MANUFACTURING JOBS FROM FLEEING OVERSEAS

To combat the exodus of NY jobs overseas, Schumer says federal government should permanently cut taxes by 3 percent for companies that produce goods in the US

Schumer: We must provide incentives for companies to keep jobs in the US

New Schumer report details NY's manufacturing job loss over last 3 years; Capital Region has lost an estimated 5,990 manufacturing jobs; Central NY 10,700; Rochester/Finger Lakes 19,590; Hudson Valley 9,000; North Country 2,540; Southern Tier 9,700; Western NY 18,500

To combat the problem of outsourcing, US Senator Charles E. Schumer today said the federal government should cut taxes on companies that produce goods domestically. Schumer, who released a new report outlining the job losses for each county in the state, said that lowering taxes on US manufacturers will help level the playing field against lower priced foreign goods and could lead to fewer New York workers being laid off.

"We need to fight to keep our manufacturing jobs from leaving New York and we need to wage that fight on two fronts," Schumer said. "One front is to get tougher on other countries like China that give their companies unfair advantages by playing games with their currency. And the other front is to help companies here at home by giving them a break on their taxes. The best way to motivate companies to stay or locate here in the first place is to reward them and provide them with incentives."

Many economists believe that a number of New York's manufacturing jobs have been lost because US manufacturers are finding it difficult to compete against lower priced foreign goods – leading them to lay off workers. Since 2001, an estimated 2.6 million US manufacturing jobs have been lost, including more than 130,000 in New York. Schumer said that one cause is that the undervaluation of China's currency, the yuan, makes China's exports relatively less expensive for foreigners, and makes foreign products relatively more expensive for Chinese consumers and discourages imports. The effective result is a significant subsidization of China's exports and a virtual tariff on foreign imports. This kind of practice has caused companies to locate to other countries like China or India, or lay off its employees here in the US in order to stay afloat.

Schumer today released a report detailing the scope of the problem in New York, specifically finding that:

• Since 2001, the Capital Region has lost an estimated 5,990 manufacturing jobs;
• Since 2001, Central New York has lost an estimated 10,700 manufacturing jobs;
• Since 2001, Rochester/Finger Lakes has lost an estimated 19,500 manufacturing jobs;
• Since 2001, the Hudson Valley has lost an estimated 9,000 manufacturing jobs;
• Since 2001, the North Country has lost an estimated 2,540 manufacturing jobs;
• Since 2001, the Southern Tier has lost an estimated 9,700 manufacturing jobs;
• Since 2001, Western New York has lost an estimated 18,500 manufacturing jobs.
[For county-by-county breakdowns, please see attached report.]

Schumer said that one way to keep jobs in New York and the US is to reward manufacturers who produce their goods domestically. Schumer said he is pushing Congress to pass the bipartisan JOBS bill written by Senators Max Baucus and Charles Grassley that would provide a 3 percent tax cut for New York manufacturing companies. The bill would allow New York companies to deduct up to 9 percent of their production income, and effectively lower the corporate income tax rate by 3 percent. The 3 percent tax reduction would be effected through a deduction equal to 9 percent of a company’s domestic manufacturing income and would be phased in over 5 years (2004-2008). Deductions would begin in 2004 and increase until the 9 percent amount is reached in 2009.

"It's no secret that the manufacturing industry's been getting killed throughout the country and our state has been no exception," Schumer said. "The bottom line is simple: Cutting taxes for domestic manufacturers will help New York companies stay competitive against international competitors, and provide extra dollars for them to absorb rising costs. Those factors are vital for keeping and growing jobs."

Last year, Schumer introduced legislation that would apply a "symmetrical" tariff of 27.5 percent in line with China's currency undervaluation that would be applied across the board to products from China. It would allow the President to remove sanctions once he certifies that China has moved to a market-based currency. The tariffs would kick in after a grace period of 180 days to ensure that Treasury officials have adequate time to work with the Chinese government to institute reforms.

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