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Iron Range mayors are making a mistake: More steelworkers went back to work under Obama

It was the smartly designed, consensus-driven CAFE standards of the Obama-era that created the environment for massive reinvestment in the U.S. automotive industry after 2012.

A steel coil is unrolled on the line
There are now 200,000 fewer manufacturing jobs in America than when President Barack Obama left office.
REUTERS/Aaron Josefczyk

Two months out from the election is an appropriate time to reflect on what Donald Trump has done for American workers. As another American president once asked, “Are you better off today than you were four years ago?”

Here’s how I would answer that question.

Four years ago, 89.7% of Americans had health insurance. By 2019, that number had dropped to 86.3%; then 5.4 million more Americans lost their health insurance in the middle of a pandemic. There were also a half million health care workers on layoff at the end of August, and that’s also happening in the middle of a pandemic.

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Four million hospitality workers haven’t seen a paycheck since March while retail sales jobs are still down by 600,000.

Trump hails his trade war with China and the renegotiation of the North American Free Trade Agreement as his great successes in defending American manufacturing workers, but what has he actually accomplished? On Aug. 31, the last employees of the Melt Shop and Rolling Mill at Gerdau Ameristeel in St. Paul were permanently laid off. I started my career in the United Steelworkers there 45 years ago. Just last year, Vice President Mike Pence bragged at that mill about how the “new NAFTA”will finally allow American workers to compete and win on a global stage as never before.”  

Employment in manufacturing at the end of August was still down over 700,000 jobs. In fact, there are now 200,000 fewer manufacturing jobs in America than when President Barack Obama left office. In his eight years, Obama put more than 12 million Americans back to work, inheriting a labor force of 139 million and leaving with 151 million. At the end of August 2020, Trump shrank the workforce he inherited from Obama by 10 million, to 141 million. 

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Closer to home, the Trump tariff theatrics with China had nothing to do with the resurgence of the U.S. steel and iron ore industries in 2017-18, which was directly linked to the nine product-targeted tariffs levied by the Obama administration during the previous five years. These smartly designed but not well-publicized enforcement moves laid the basis for a resurgence in steel prices, particularly for the high-end products that need to be made with iron ore instead of scrap steel.

David Foster
David Foster
Higher steel prices in 2017 and 2018, prompted by these Obama measures, brought the U.S. industry back from the brink along with a robust motor vehicle industry. But once again it wasn’t Trump’s tariff toys or his fiddling with NAFTA that created the rebirth of America’s automotive industry. It was the smartly designed, consensus-driven CAFE standards of the Obama-era that created the environment for massive reinvestment in the U.S. automotive industry after 2012, adding more than 200,000 new manufacturing jobs in that industry alone.

When the industry, federal and state regulators, and the United Autoworkers stood together to announce the first change in fuel efficiency in the industry in over 30 years, capital investments poured in, innovation accelerated, and new technologies like lightweight, high strength steel reinvigorated supply chains and increased demand for Minnesota’s iron ore. Well-run companies succeed when government, labor, and private capital are all aligned.

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Today, the global steel industry is in crisis because of massive overcapacity. In 2016 world steelmaking capacity was 663 million metric tons greater than demand or almost 30%. By comparison, the U.S. only produces 80-85 million metric tons of steel in the U.S. As a result, global prices have collapsed. 

We went through this same phenomenon in 1998-2000 with over 300 million tons of overcapacity in the world, three times what the U.S. could produce. Forty-eight American steel companies went into bankruptcy — including LTV Steel Mining, which had 2,000 employees and three times that many retirees on the Iron Range. I remember standing in the Hoyt Lakes hockey arena with Sen. Paul Wellstone, meeting with those steelworkers, planning our strategy to protect America’s steel industry and the pensions and health care of its retirees.

But that strategy was based on a clear-eyed vision of how America needed to engage with the world and solve the problem of oversupply before it destroyed the industry in multiple countries, including our own. Wellstone fought for that principle under Republican President George Bush and eventually multiple, product-targeted tariffs were implemented by that administration, providing the industry with the breathing space it needed to reorganize. As a result, only two of those companies, with blast furnaces — Acme and Geneva Steel — went out of business.

What is worrisome about the Trump administration’s embrace of thoughtless chaos is that no rational, sensible business can plan and execute without a clear sense of the future. Already, we’ve seen U.S. Steel announce the permanent closure of its Great Lakes Division blast furnaces in Detroit. This is extremely dangerous for the Iron Range. Blast furnaces are the only customer for taconite pellets. Each one that closes has a long-lasting ripple effect, not only in its own community but all through the supply chain, ending in communities like Keewatin, Minnesota.

So, this September, less than two months from a presidential election, it’s important to take stock of the qualities of leadership that matter. One of Obama’s weaknesses was his failure to articulate, publicly and clearly, his strategy on trade and to take credit for his successes. Trump has no strategy to deal with the global steel oversupply. Since he’s alienated America’s closest allies, no one will work with him on this problem.

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Workers have never profited in this country by simply being pawns in the game. That’s how you get stiffed. You get yourself organized, you pick leaders who will represent you and will tell the truth. To this date, I’ve never seen workers benefit from someone, like Donald Trump, who doesn’t know how. Just ask the workers at Gerdau Steel in St. Paul.

David Foster is a retired United Steelworkers director, District #11, and former Obama administration senior adviser to the secretary of energy.

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