COLLINS QUESTIONS FED CHAIRMAN ABOUT LOSS OF MANUFACTURING JOBS

Washington, D.C. -- Senator Susan Collins today questioned the Federal Reserve Chairman, Alan Greenspan, about his outlook for the American manufacturing sector in light of the trend of manufacturing job losses that are being experienced in Maine and across the nation. Greenspan testified before the Joint Economic Committee that includes members of the Senate and the House of Representatives and of which Senator Collins is a member.

The U.S. Treasury Secretary yesterday predicted robust job growth between now and November, including the addition of 180,000 new jobs per month. But Senator Collins pointed out to Chairman Greenspan today that the number of jobs in the U.S. manufacturing sector has fallen each year since 1997.

"The recent surge in jobs growth is very encouraging, but it is unlikely to help a lot of the people in Maine who were laid off after dedicating many years of their lives working in our paper mills and other factories," said Senator Collins. "I am also concerned that many of the new jobs being developed in Maine pay far lower wages and offer far fewer benefits than the relatively high wage manufacturing jobs that the state is losing."

Chairman Greenspan avoided providing his expectations for the future of manufacturing jobs, but said the U.S. is beginning to see significant improvement in the economy and that "things will improve in the long run."

He also pointed out that there has been an extraordinary advance of productivity in manufacturing, saying, "The regrettable secondary collateral damage of that process is that they need fewer and fewer people to produce any particular level of output."

Senator Collins also asked Chairman Greenspan whether there may be a public policy solution.

"Chairman Greenspan indicated that he has some ideas about what may be done legislatively to address the problem and I am looking forward to discussing those with him," said Senator Collins.

Senator Collins recently introduced the Growing Our Manufacturing Employment Act that would help to create and retain American manufacturing jobs. The legislation would provide tax incentives to companies that hire dislocated manufacturing workers who are eligible for Trade Adjustment Assistance and tax incentives to companies who keep their operations in the U.S.

A recent study by the National Association of Manufacturers found that Maine lost 18,000 manufacturing jobs in the past three years, the greatest loss of all states in terms of percentage of the workforce.