Supply Chain Resiliency and the Role of Small Manufacturers
Summary
The printed record of a hearing held April 29, 2021 by the Subcommittee on Economic Growth, Tax, and Capital Access of the House Committee on Small Business, published as Small Business Committee Document Number 117-010. Chairwoman Sharice Davids presided over the remote hearing; she states that nearly 80 percent of U.S. businesses experienced a disruption in their supply chain and describes her Supplies Act, a $100 million grant program for domestic manufacturing of medical supplies. Ranking Member Dan Meuser states that Pennsylvania manufacturers employ nearly 600,000 individuals directly. The witnesses are the president of DenTec Safety Specialists, a co-founder of Holleway Capital Partners, LLC, and the presidents of the National Council of Textile Organizations and the Pennsylvania Manufacturers' Association. The appendix lists their prepared statements and additional material.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Full text
[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
SUPPLY CHAIN RESILIENCY AND THE ROLE OF
SMALL MANUFACTURERS
HEARING
BEFORE THE
SUBCOMMITTEE ON ECONOMIC GROWTH, TAX, AND CAPITAL ACCESS
OF THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
APRIL 29, 2021
__________
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 117-010
Available via the GPO Website: www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
44-563 WASHINGTON : 2020
-----------------------------------------------------------------------------------
HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA VELAZQUEZ, New York, Chairwoman
JARED GOLDEN, Maine
JASON CROW, Colorado
SHARICE DAVIDS, Kansas
KWEISI MFUME, Maryland
DEAN PHILLIPS, Minnesota
MARIE NEWMAN, Illinois
CAROLYN BOURDEAUX, Georgia
JUDY CHU, California
DWIGHT EVANS, Pennsylvania
ANTONIO DELGADO, New York
CHRISSY HOULAHAN, Pennsylvania
ANDY KIM, New Jersey
ANGIE CRAIG, Minnesota
BLAINE LUETKEMEYER, Missouri, Ranking Member
ROGER WILLIAMS, Texas
JIM HAGEDORN, Minnesota
PETE STAUBER, Minnesota
DAN MEUSER, Pennsylvania
CLAUDIE TENNEY, New York
ANDREW GARBARINO, New York
YOUNG KIM, California
BETH VAN DUYNE, Texas
BYRON DONALDS, Florida
MARIA SALAZAR, Florida
SCOTT FITZGERALD, Wisconsin
Melissa Jung, Majority Staff Director
Ellen Harrington, Majority Deputy Staff Director
David Planning, Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Sharice Davids.............................................. 1
Hon. Dan Meuser.................................................. 3
WITNESSES
Mr. Claudio Dente, President, DenTec Safety Specialists, Lenexa,
KS............................................................. 6
Mr. Wes Hampp, Co-Founder & Managing Partner, Holleway Capital
Partners, LLC, Overland Park, KS............................... 7
Ms. Kimberly Glas, President & CEO, National Council of Textile
Organizations, Washington, DC.................................. 9
Mr. David Taylor, President & CEO, Pennsylvania Manufacturers'
Association, Harrisburg, PA.................................... 10
APPENDIX
Prepared Statements:
Mr. Claudio Dente, President, DenTec Safety Specialists,
Lenexa, KS................................................. 21
Mr. Wes Hampp, Co-Founder & Managing Partner, Holleway
Capital Partners, LLC, Overland Park, KS................... 26
Ms. Kimberly Glas, President & CEO, National Council of
Textile Organizations, Washington, DC...................... 34
Mr. David Taylor, President & CEO, Pennsylvania
Manufacturers' Association, Harrisburg, PA................. 43
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
Alliance for American Manufacturing.......................... 47
American Fashion Network (AFN)............................... 50
CATO......................................................... 53
Job Creators Network (JCN) Statement of Carlos Ruiz.......... 120
Job Creators Network (JCN) Statement of Guy Berkebile........ 121
Manufactured Housing Institute (MHI)......................... 123
National Waste & Recycling Association....................... 125
SUPPLY CHAIN RESILIENCY AND THE ROLE OF SMALL MANUFACTURERS
----------
THURSDAY, APRIL 29, 2021
House of Representatives,
Committee on Small Business,
Subcommittee on Economic Growth,
Tax, and Capital Access,
Washington, DC.
The Subcommittee met, pursuant to call, at 1:00 p.m., via
Zoom platform. Hon. Sharice Davids [chairwoman of the
Subcommittee] presiding.
Present: Representatives Davids, Newman, Evans, Andy Kim,
Meuser, Van Duyne, and Donalds.
Chairwoman DAVIDS. Good afternoon, everybody. I call this
hearing to order.
Without objection, the Chair is authorized to declare a
recess at any time.
I want to thank everyone, especially our witnesses for
joining us today for our Subcommittee's remote hearing. I want
to make sure to note some important requirements.
Let me begin by saying that the standing House and
Committee rules and practice will continue to apply during
remote proceedings. All members are reminded that they are
expected to adhere to these standing rules including decorum
when they are participating in any remote event.
With that said, the technology we are utilizing today
requires us to make some small modifications to ensure that the
members can fully participate in these proceedings. House
regulations require members to be visible through a video
connection throughout the proceeding, so please keep your
cameras on. Also, if you participate in another proceeding,
please exit and log back in later.
In the event a member encounters technical issues that
prevent them from being recognized for their questioning, I
will move to the next available member of the same party. I
will recognize that member at the next appropriate time slot
provided they have returned to the proceeding.
Should a member's time be interrupted by technical issues,
I will recognize that member for the next appropriate spot for
the remainder of their time once their issues have been
resolved. In the event a witness loses connectivity during
testimony or questioning, I will preserve their time as the
staff addresses the technical issue. I may need to recess the
proceedings to provide time for the witness to reconnect.
And finally, remember to remain muted until you are
recognized to minimize background noise.
In accordance with the rules established under H.R. 965,
staff have been advised to mute participants only in the event
that there is inadvertent background noise. Should a member
wish to be recognized, they must unmute themselves and seek
recognition at the appropriate time.
All right. Well, the COVID-19 pandemic has exposed
longstanding weaknesses in global supply chains. As countries
around the world shut down to slow the spread of the virus,
entire sections of the domestic and global economies were
brought to a standstill. In the United States, businesses
across every sector suffered supply shortages. Gaps in supply
chain had a substantial impact on our fight against COVID. The
scarcity of personal protective equipment forced medical
professionals on the frontlines to fight the virus with garbage
bags as gowns and coffee filters as masks.
At the same time, we saw insufficient supply in critical
industries like clothing manufacturing, electronic components,
and agriculture. In total, nearly 80 percent of U.S. businesses
experienced a disruption in their supply chain. These
disruptions often hit small businesses the hardest. Small firms
regularly have limited inventory, depend on lower costs from
overseas suppliers, and do not have the margins to sustain
extended product shortages.
While small businesses are uniquely vulnerable to
disruptions, they also play a pivotal role in building more
resilient supply chains. Small firms are agile and adapt to
changing market conditions more quickly than large
corporations. Small manufacturers can also quickly adapt their
business models to meet changing demands. As we saw last year
when small distillers began producing hand sanitizer,
independent manufacturers can shift operations to meet the
needs of their communities. These small domestic manufacturers
will play a critical role as we seek to strengthen our supply
chains and prepare for future economic disruption.
That is why we have to recognize the significant obstacles
that these enterprises face in a post-COVID world and work to
address those. The overall manufacturing sector could take
longer than 5 years to recover to the pre-crisis GDP levels. To
return to pre-pandemic output, factories are going to need to
address various challenges related to meeting new health and
sanitation requirements. This will require the implementation
of new systems, the adoption of digital technologies to protect
their workers, and modernization in the wake of the pandemic.
To meet these challenges, small manufacturers will need
reliable access to affordable capital. Unfortunately, these
firms traditionally have a much harder time obtaining funding
than their larger counterparts. This leads many to rely on
antiquated equipment and facilities with lower productivity.
Without increased access to affordable capital, small
manufacturers will find it difficult to find the upgrades
necessitated by the pandemic further weakening America's
manufacturing base.
Fortunately, the Small Business Administration has several
programs in place that small manufacturers can take advantage
of. Every year, the 7(a) loan guarantee program, the 504/CDC
loan guarantee program, and the Small Business Investment
Company Program supply small manufacturers with billions of
dollars in capital on favorable terms. This money helps these
businesses pay for fixed assets, purchase new equipment, access
venture capital, and finance a variety of other expenditures.
We must utilize these programs and others to strengthen our
manufacturing base and avoid future supply chain disruptions.
That is why I fought to secure $10 billion for the Defense
Production Act in the American Rescue Plan, to ramp up domestic
production of critical supplies. It is also why I recently
introduced the Supplies Act, a bill that would create $100
million grant program to increase domestic manufacturing of
medical supplies by our small businesses. I hope that today's
hearing gives us a chance to find more ways to empower small
manufacturers and improve the SBA lending program to serve
them.
I now yield to the Ranking Member for his opening
statement.
Mr. MEUSER. Thank you, Madam Chairwoman. I appreciate it
very much. I certainly appreciate our witnesses appearing with
us today.
Am I coming through okay, Madam Chair? Okay, great.
Coming from a manufacturing background, I am very much
looking forward to this hearing and hearing from all on some
ideas, suggestions that the Federal Government and the U.S.
Congress can engage in to improve our strength and ability for
small manufacturers, and all manufacturers for that matter. And
I thank you, Madam Chairwoman. I appreciate your convening
today's hearing on this very important topic. Given the great
influence these businesses have on our national economy, I
think it is particularly appropriate that we dedicate the
Subcommittee's first hearing for one of America's most vital
industries. In fact, it is difficult to overstate the
importance of manufacturing to our economy. At a microlevel,
manufacturing is a significant job creator, reaching higher
than average salaries, raising the standard of living for
millions of Americans across the country. Pennsylvania
manufacturers account for over 12 percent of the total output
in the state, employing nearly 600,000 individuals directly and
10 percent of our workforce. Pennsylvania manufacturers help
sustain millions of additional jobs up and down the supply
change. Prior to the pandemic, total manufacturing was almost
$100 billion in 2019.
Manufacturing is also a most significant of a multiplier
effect. It generates more economic activity than any other
economic sector. For every dollar spent in manufacturing from
the private sector, another $1.89 is added to the overall
economy. At a microlevel, manufacturing drives productivity
growth which drives R&D growth.
Productivity growth is the lifeblood of technological
development. The bulk of innovation happens in manufacturing
growth from other sectors and springs from innovation within
the sector. Given its significance, this hearing should help us
understand top concerns threatening the industry. The workforce
crisis in manufacturing in Pennsylvania, and I am sure in most
states, is exasperated by the gradual retirement of an aging
workforce and negative perception of manufacturing by the
younger generation. That is why we need more tours and more
career technical investments because these manufacturing
facilities are far cleaner and they are not the traditional
manufacturing of our fathers' days. A skills gap resulting from
declining science, technology engineering in the U.S. and the
inability to recruit qualified candidates in skilled production
line positions. These struggles are only one piece of the
broader picture.
Outsourcing of U.S. manufacturing to foreign nations, from
China, most of Southeast Asia and down the list, we have driven
supply chains vulnerable to failure and exploitation by foreign
actors weakening our national position in defense, health, and
all other sectors. The aggressive economic tactics by
competitive Nations creating global market distortions which
will depress competition.
On top of all this, the maze of Federal acquisition
processes, like the contract timelines and emergency clearances
and accounting requirements creates significant hurdlers for
U.S. manufacturers and all businesses for that matter seem to
grow and thrive in the Federal marketplace, as well as a
tendency for the U.S. not to create the most competitive
atmosphere and truly appreciate that is what draws
manufacturing to the U.S. from other countries who compete on a
global scale. All manufacturers in particular hit hardest by
such challenges.
Even though the overall picture might seem quite
challenging, the silver lining in this is the power of the
small manufacturers will reshape our Nation. Many small
manufacturers do not make finished products but are a source
for many domestic manufacturers of finished products. From my
business career in manufacturing, close to 25 years, I know
firsthand the importance of reliable, quality, cost-effective,
financially solvent supply chain.
Given any impact to small manufacturers, positive or
negative that can cause a significant ripple throughout the
rest of our economy, we as members of Congress need to consider
carefully our policies and their impact on these essential
businesses, especially now as we are recovering from the
pandemic. In short, manufacturing matters. I look forward to
the testimony of the witnesses today and I yield back. Thank
you.
Chairwoman DAVIDS. Thank you, Mr. Meuser. The gentleman
yields back.
I would like to take a moment to explain how this remote
hearing will proceed. Each witness will have 5 minutes to
provide a statement, and each Committee member will have 5
minutes for questions. Please ensure that your microphone is on
when you begin speaking and that you return to mute when you
have finished.
I would now like to introduce our witnesses.
Our first witness is Mr. Claudio Dente. Mr. Dente is the
president of Dentec Safety Specialists, a manufacturer of
personal protective equipment located in Lenexa, Kansas, which
is in my home district. His business had to pivot at the height
of the pandemic in order to meet the sharp increase in demand
for PPE and face severe supply chain management challenges. I
am looking forward to hearing about how Dentec adapted to the
market conditions brought on by the pandemic. Welcome, Mr.
Dente.
Our second witness is Mr. Wes Hampp. Mr. Hampp is the
cofounder and managing partner of Holleway Capital Partners, an
SBA-licensed small business investment company (SBIC) located
in my district that targets small manufacturers in the Greater
Midwest and Southern U.S. His insights are critical for us to
learn how SBA's capital programs, such as SBIC, can play a role
in helping finance the future of our domestic manufacturing
base. Welcome, Mr. Hampp.
And then our third witness today is Ms. Kimberly Glas,
president and CEO of the National Council of Textile
Organizations. NCTO represents and advocates for domestic
textile manufacturers, the vast majority of whom are small
businesses. Prior to joining NCTO, Ms. Glass held positions at
the Department of Commerce as the deputy assistant secretary
for textiles, consumer goods and materials, and led the Blue
Green Alliance. Your long history and expertise in this
industry will certainly help us craft a path forward for small
business manufacturers. Welcome, Ms. Glass.
And I would like to now yield to our Ranking Member, Mr.
Meuser, to introduce our final witness.
Mr. MEUSER. I thank you, Madam Chairwoman, very much.
I would like to welcome our final witness who is from the
great Commonwealth of Pennsylvania, Mr. David Taylor. Mr.
Taylor is the president and chief executive officer of the
Pennsylvania Manufacturers' Association (PMA), the century-old
statewide trade organization representing the hardworking
manufacturers throughout the Commonwealth. PMA is the official
Pennsylvania state partner of the National Association of
Manufacturers (MAN), the Nation's foremost advocate for
manufacturers representing 14,000 member companies across the
country in every industrial sector. Mr. Taylor brings with him
a wealth of knowledge and experience having spent over 2
decades with PMA as its spokesman in the state capitol and as a
leader. Mr. Taylor is a frequently sought-after guest and
commentator by media outlets across the Commonwealth, and we
are fortunate to have him here with us today.
In addition to his role at PMA, Mr. Taylor serves as
Chairman of the Pennsylvania Leadership Council. He is a member
of the American Institute's Leadership Network. He currently
serves as a member of the Executive Committee of the Conference
of State Manufacturers' Association. He is on the Board of
Directors of the Pennsylvania Steel Alliance, Foundation for
Free Enterprise Education, Business Industry Political Action
Committee, the Lincoln Institute for Public Opinion Research.
He serves as the board president of REACH cyber charter school,
an online public school providing a broad range of science,
technology, engineering, and math enrichment of students. Prior
to joining PMA, Mr. Taylor worked for the United States Senate
and the Senate of Pennsylvania. He is a native of Huntington,
Pennsylvania where I was just last weekend and a graduate of
Dickinson College.
Mr. Taylor, thank you for all that you do for Pennsylvania
and for your participation today. We look forward to your
testimony and I yield back.
Chairwoman DAVIDS. Thank you for doing that introduction.
Mr. Dente, we are going to go ahead and get started. You
are recognized for 5 minutes.
STATEMENTS OF CLAUDIO DENTE, PRESIDENT, DENTEC SAFETY
SPECIALISTS; WES HAMPP, CO-FOUNDER & MANAGING PARTNER, HOLLEWAY
CAPITAL PARTNERS, LLC; KIMBERLY GLAS, PRESIDENT & CEO, NATIONAL
COUNCIL OF TEXTILE ORGANIZATIONS; DAVID TAYLOR, PRESIDENT &
CEO, PENNSYLVANIA MANUFACTURERS' ASSOCIATION
STATEMENT OF CLAUDIO DENTE
Mr. DENTE. Sorry about that. Wrong button.
I appreciate it very much, Madam Chair. I appreciate the
opportunity to participate in this conversation.
I would like to let you know first that I am a 41-year
veteran of personal protective equipment and manufacturing,
distribution, and design. I know nothing but this industry. I
am going to share with you my journey through this experience.
I purchased a respirator manufacturing operation located in
the Kansas City, Kansas area called U.S. Safety. That company
had been manufacturing reusable respirators, filters, and
cartridges for some 40-plus odd years. My interest in the
business was because respiratory protection is a critical
product in our industry and because I have been through all the
viruses, and I wanted to be able to bring a product to market
that was manufactured and assembled in the United States.
The effect of COVID, what happened, I was in New York when
it first hit. I was traveling on business. It was in February.
The news started to spread. From New York I went to Kansas and
then, of course, COVID blew up. It was like something I have
never seen or experienced, all of us have. Quickly, the supply
or disposable N95 respirators, surgical masks from overseas,
and also from domestic supply completely collapsed. Nothing was
available.
Fortunately for us and our business, we manufacture
reusable rubber half masks and an N95 filter in our facility.
We quickly deployed a marketing campaign to the marketplace,
and it became an incredible success because we were able to
help not only healthcare workers but general industry for those
that could keep working. However, folks, the orders were
overwhelming for a company of our size. They were massive. They
continued to hit us with orders every single day.
My team worked 6-, 7-day weeks, 2 shifts, 10-12 hour days.
I do not know how they did it and I do not know how they still
do it. God bless them. We experienced everything that you could
imagine--raw material shortages, equipment breakdowns,
employees coming and going. Very, very difficult. So, in
summary, surge demand orders, which I had been through in the
past unlike what I have seen here during COVID, are absolutely
enormous. Not only for a small business but also for a big
business.
And the challenges that when you have to set up and get
going are equipment, which are molds. Everything I make is
plastic or rubber, so we are dependent on molds and injection
molding machines. We are dependent on cycle time. My product
has a lot of hand assembly to it. So, you have to make
arrangements to acquire those goods in a fashionable time.
Fortunately, we received a grant and funding from the CARE/
SPARKS program, and we have modernized our facility in a manner
that I did not dream was possible in the next 10 years. The
next time you come, Ms. Davids, I think you will be quite
impressed.
We also had enormous space challenges, as you can
appreciate. When you have to make product of this magnitude, it
is absolutely incredible. So, all of these are expenses that we
have to incur. And as an entrepreneur and an owner of a
business, you are fearful of committing yourself beyond when
the pandemic resides.
So, a couple of recommendations that I would like to pose
to the Committee are that instead of not only subsidizing
people during a time, critical businesses like ours, help us
hire people by subsidizing an additional wage to them, an
hourly wage. Rather, this would create tax income as well and
not just debt.
Staffing, of course, was a challenge to hire people. What I
ask, when you identify critical businesses such as ours,
perhaps we could have access to some military personnel to help
us ramp up. They are process oriented, great workers, wonderful
personalities, and if we could have access to people like that
for a short period of time while we ramp up it would make an
enormous difference for us as a business.
And then finally, financing. We want to be careful again as
an entrepreneur and an owner, I do not want to extend myself
beyond because it as quickly as COVID came upon us, all of a
sudden it will stop and then you are stuck with the overhead,
capital investment and so forth and loans. So, my suggestion
would be to--of course, grants are fantastic for those that are
worthy of it, but also loans in a manner that are not as
challenging and maybe recognize the concerns of when the event
subsides. Thank you very much.
Chairwoman DAVIDS. Mr. Hampp, you are now recognized for 5
minutes.
STATEMENT OF WES HAMPP
Mr. HAMPP. Thank you, Chair Davids, Ranking Member Meuser,
and members of the Subcommittee. Thank you for inviting me to
testify at this important hearing.
My name is Wes Hampp. As Chair Davids said, I am a
cofounder and managing partner of Holloway Capital Partners. We
are a small business investment company (SBIC). We are
headquartered in St. Louis but we have an office in Overland
Park, Kansas where I sit. We focus on investing in small
manufacturers throughout the Midwest.
I am going to highlight several challenges with the U.S.
supply chain we are experiencing in our portfolio companies and
suggest a few solutions.
Challenge 1. COVID-19 exposed our country's massive
reliance on China and our supply chain across nearly all
industry sectors. While U.S. businesses compete successfully in
a global economic environment, there are positive economic
arguments for global supply chains but COVID-19 exposed an
urgent need for more domestic manufacturing to reduce our
reliance on imports.
Manufacturing is an interconnected ecosystem where the
impacts on any one business can affect other associated
businesses. The Paycheck Protection Program (PPP) was a
lifesaver and helped stabilize the financial uncertainty many
small businesses faced in the early days of the pandemic.
Today, however, domestic supply chains are in a state of chaos.
Prices are rising, in some cases 25 percent week to week, and
lead times have been extended in some cases four times longer
than pre-pandemic levels. PPP allowed many small businesses to
surge back but many of their larger company suppliers lost
their workforces and were unable to quickly restart and return
to pre-pandemic production levels which has led to domestic
supply chain disruptions.
After COVID-19 hit last year, some large companies that
supply products to smaller manufacturers stopped making growth
investments, shuttered capacity, and even laid off employees.
As demand rebounded in late 2020 and so far this year, these
larger suppliers are now struggling to hire and train employees
to ramp output to meet demand. In some cases, it appears that
supply chain disruptions may have been an unintended
consequence of limiting PPP to small businesses.
Challenge 3, our biggest challenge facing small
manufacturers is labor supply. Small manufacturers are unable
to find employees to fill open positions which is hindering our
growth. In some cases, our companies have raised starting wages
20 percent but positions remain unfulfilled. This issue is
currently more acute for unskilled entry-level positions but is
a challenge for skilled labor as well.
These are the key challenges. Let me offer a few solutions.
Solution 1. Access to patient capital is critical for
domestic small businesses in order to keep the U.S. competitive
and strengthen supply chains. Since SBICs invest exclusively in
domestic companies, and heavily in manufacturing, they are an
excellent vehicle to get capital to small manufacturers.
Congress should support policies that reward and encourage SBIC
investments and not do anything to hinder the program's
success. Particularly, lawmakers should support more equity
investing in U.S. small businesses that otherwise need to rely
on debt financing where in some cases equity is more
appropriate.
Congress should write tax policies that encourage, not
discourage, long-term investing in America's small businesses.
Before Congress doubles the capital gains rate, I would implore
you to consider what doing so would do to small business owners
across the country, especially older entrepreneurs that are
beginning to explore retirement. Small business owners build
their businesses over years, even the majority of a lifetime.
They typically get to sell that investment once. And when the
entrepreneur sells their business it is commonly going to
generate more than $1 million in income but that nest egg kind
of becomes what they expect to live on for the rest of their
lives. If capital gains taxes are raised, there should be
serious consideration given to investments in American small
businesses.
Solution 3. Our leaders in government, business, and
education should work together to promote and provide
opportunities to learn skilled trades through apprenticeships
and technical education. Finding workers is one of the biggest
problems in the manufacturing sector and it is holding back
small business growth and national economic growth. Four-year
college degrees are not for everyone and people can make good
livings working in the trades and support manufacturing. And
these types of careers should be supported and encouraged.
Thank you again for the opportunity to testify before the
Subcommittee, and I welcome your questions.
Chairwoman DAVIDS. Thank you, Mr. Hampp.
Ms. Glas, you are now recognized for 5 minutes.
STATEMENT OF KIMBERLY GLAS
Ms. GLAS. Thank you so much for the opportunity to testify
before you today. I am the president and CEO of the National
Council of Textile Organizations and I represent the domestic
textile industry and the 539,000 workers it employs. We are
predominantly comprised of small businesses.
Today's focus on supply chains and bolstering our small
businesses is an incredible opportunity. There are immense
challenges faced by our industry as a result of this pandemic.
Literally, overnight, billions of orders were canceled. And I
was looking out at an industry that was really confronting
bankruptcy.
In the spring of last year when PPE shortages were hitting
every front line, and workers were wearing garbage bags as
gowns or reusing N95 masks, our industry really stepped up. But
it is important for me to highlight that the reason that these
supply chains broke down was that our predominant supply for
these items was in China. And Chinese subsidies, coupled with
significant global demand, exacerbated by export controls
placed by the Chinese on certain products and raw materials,
had a cascading impact that we were reading on the front pages.
Simply put, it was like fighting a fire with a garden hose
on every front. U.S. textile manufacturers quickly mobilized.
Virtually overnight, our members were able to retool supply
chains to make over a billion face masks, isolation gowns, and
other textile components. In fact, I am in New York's garment
district right now and this garment district played a
significant role in retooling their supply chain.
In order to help the Nation's PPE crisis, manufacturers
retooled overnight, but they had to purchase expensive
equipment at a time when capital was really uncertain and at a
considerable expense. In addition, industry needed to expend
significant resources to ensure safe workplaces to get workers
back to work and purchase the raw materials necessary to making
lifesaving PPE. Please note that while PPE was important for
our frontline workers, it did not make up for the significant
loss of orders of normal business in our industry. Industrial
expenses were vast and wide-ranging, including everything from
health and safety measures, to thermometers, to more pay for
workers, to bringing them back on the job. We appreciate that
there are many solutions necessary for small textile
manufacturers to weather the challenges of the pandemic and the
crisis that we are still confronting.
For many of our small businesses, SBS programs serve an
important role. Many of our companies take advantage of
everything from the Paycheck Protection Program to Main Street
lending, 7(a) loans and 504 loans. Our members really
appreciate the aspect of the SBA loans, including the lower
down payment and extended payment term. These advantages,
however, are sometimes offset by other factors that
disincentivize their use. And I have several key solutions to
project for the Committee, and for you all to consider moving
forward.
First, we think that we need to reform our domestic
procurement rules for federal purchases of PPE. Right now, we
need to extend the Berry Amendment rules for our military for
PPE items that are purchased by other agencies across the
Federal Government. We appreciate the president's ``Build Back
Better'' initiative to strengthen our supply chains, but we
need legislation to move forward. We want to highlight that
Congressman McHenry from North Carolina and Congressman Bill
Pascrell from New Jersey have co-sponsored the American PPE
Supply Chain Integrity Act which does just that.
In addition, we believe that there needs to be more tools
and investments in small businesses to manufacture these
products moving forward. We appreciate the support for the
Defense Production Act, but we also need Federal protection
grants and tax credits to ensure manufacturing capacity.
Chairwoman Davids, I want to highlight your bill as well.
The $100 million fund set aside for small businesses is an
important tool moving forward, but we need more tools moving
ahead.
Further, private sector investment is important to U.S.
supply chains and can be bolstered by contracting reforms that
promote long-term contracts for U.S. suppliers. We need a
demand signal. In fact, our industry is starting to see orders
dry up for PPE. We have had 60-day contracts and 90-day
contracts. We need certain set-asides for small businesses, but
we should ensure that when we are providing contracts to small
businesses, those companies can deliver and have the capital
necessary to help the U.S. Government.
And the last recommendation I had is to ensure that the SBA
loan process is streamlined and that communication is better
with borrowers. During the height of the pandemic, it was
difficult for some of our manufacturers to tap into the
resources because they simply did not know where the paperwork
trail would eventually begin.
Our industry is ready to work with this Committee. I want
to amplify the comments made about workforce. We really do need
more funding to help bring workers back on the job, and our
industry stands ready to help this Committee in any way
possible.
Chairwoman DAVIDS. Thank you, Ms. Glas.
And Mr. Taylor, you are recognized for 5 minutes.
STATEMENT OF DAVID TAYLOR
Mr. TAYLOR. Thank you, Chairwoman Davids and Ranking Member
Meuser and members of the Subcommittee, thank you for the
privilege of testifying today.
As Congressman Meuser was so kind to introduce me, I am
David Taylor. I am the president and CEO of the Pennsylvania
Manufacturers' Association. We are the statewide not-for-profit
group representing the people who make things and
Pennsylvania's public policy sector. I also want to thank
Congressman Evans from Philadelphia, my great friend. It is
good to see you, sir.
I want to express three important points. First, the
workforce crisis is real and is a hard cap on America's
economic growth. Second, the Federal Government becomes a
competitor to employers when it pays people more to stay home
than they would earn at work. And third, Congress can help
address the workforce crisis by working with the states to
reinvent the existing tangle of taxpayer-funded workforce
development and job training programs. And I will expand on
each of those points as I go on.
Manufacturing is the sector of our economy that adds the
most value, pays the highest wages and benefits, and has the
strongest multiplier effect on job creation. No matter what
product is being made, manufacturing takes raw materials or
component parts and goes through a multi-stage process to yield
a finished good, almost always consuming a large amount of
energy and usually deploying some kind of chemical process.
Because of that multi-stage process of adding value,
manufacturing sustains not only the jobs on the plant floor but
also jobs through supply chains, distribution networks, and
vendors of industrial services. In that way, the major
manufacturer is often the small business owner's best customer.
I know the Subcommittee is looking to examine the supply
chains for small business, however the most critical input that
is lacking for manufacturers today is the supply of qualified
workers. Nationally, manufacturers are facing an alarming
problem: our workforce is aging and retiring and there is a
shortage of skilled hands to succeed them. Pennsylvania is no
exception to this problem. According to our sources at the
Manufacturing Institute, at any given point in time there are
about 6,000 open manufacturing positions in Pennsylvania. When
you couple the current shortage with the fact that some
companies have more than half of their current workforce within
just a few years of retirement, then we could consider this
workforce problem a workforce crisis. The manufacturing sector
and the workforce at large face an increasingly pressing
problem: the glut of unfilled jobs due to a skills gap. As a
result of employers' inability to find enough qualified new
hires, businesses are not able to grow to meet current levels
of customer demand. Those employers are ``leaving money on the
table'' because they cannot find the quality employees they
need to increase production capacity to be able to bid on new
work, which is available. This is what I am trying to express
when I say that the workforce crisis is a hard cap on growth.
Of course, to get people into the workforce, they first
have to want to work. This is one of the problems of the
current moment because of Congress's policy of subsidizing
state unemployment compensation payments. The Federal
Government was correct to respond to the needs of our citizens
caused by the economic shutdown triggered by the pandemic. Many
people are still dealing with both the health crisis and the
economic consequences of the shutdown. The impulse to be
generous is understandable, but regrettably, the Federal
taxpayer subsidy to state unemployment benefits is keeping many
employees out of the workforce.
One final thought that I want to share with you concerns
the efficacy of the Nation's job training and workforce
development programs. In Pennsylvania, roughly $2 billion
dollars in state and Federal taxpayer money is spent annually
on more than four dozen programs that run through at least five
different state cabinet agencies. Following a 2019 audit of the
state's workforce development system, Pennsylvania's Auditor
General at the time, Democrat Eugene DePasquale said, and I
quote, ``I think it needs to be restructured entirely. You have
to envision nothing exists right now and how you would create
it. None of us would have it look the way it does today.''
I am convinced that there are hundreds of millions of
dollars in efficiencies that could be realized if Pennsylvania,
working in partnership with Congress and the respective Federal
departments, could realign, rework, and move dollars between
programs. The existing waiver process has been used to great
effect by the state of Indiana, and I would recommend using
their experience as a model for future reforms.
So thanks again for the great honor of speaking with you
and I will do my best to answer your questions.
Chairwoman DAVIDS. Thank you, Mr. Taylor. And thank you to
all our witnesses. We appreciate your expertise and everything
you have shared today.
We will go ahead and get started with the questions. I will
begin by recognizing myself for 5 minutes.
Mr. Dente, in your testimony you gave both recommendations
and a bit about the story of the difficulty that you faced in
pivoting and transitioning. I am wondering if you could speak
specifically to the challenges that Dentec faced while
searching for capital to produce the N95s during the height of
their shortage here domestically.
Mr. DENTE. Thank you. Please understand, I do not
manufacture disposable N95s. We manufacture reusable product.
Right? So again, when the volume of orders which were massive
came to us, right now I am self-funded but I was at a point
where I was saying, what the heck am I going to do? We were
fortunate when the CARES Act grant program came out, we
qualified for that. We also qualified for a loan from the
Department of Commerce for Kansas as well. Had I not qualified
for those programs I would have had to go to the street, but
the problem is the speed, trying to get things accomplished
during a chaotic time like that, I do not know how we would
have done it. Do not know how we would have done it. I hope
that answers.
Chairwoman DAVIDS. Thank you, Mr. Dente.
I am going to switch over. Mr. Hampp, I know that a lot of
manufacturers had to reassess their supply chains following the
pandemic-related disruptions and realized that there was a lot
of risk and vulnerability in the supply chains that they were
making use of. I am wondering if you could tell us a little bit
about the role that SBICs can play in establishing a more
stable supply chain for our small and mid-size domestic
manufacturers.
Mr. HAMPP. Sure. I will talk about, you know, we focus on
manufacturing. And you know, as the supply chain stretched out
and it became very difficult, prices are increasing regularly.
Sometimes products that we would get come just in time basis
were not even available. What we did was we encouraged our
portfolio companies to invest in inventory. To take down as
much inventory as they could as quickly as they could to get
through what was an uncertain time. Again, the PPP program
helped. But what happens in those situations where we have a
company that needs capital to address a short-term issue, the
SBICs would typically stand behind those portfolio companies
and inject capital if needed. But all of our companies were
able to, through the PPP loan, keep employees employed and then
they had capacity to buy the inventory more than they would
normally hold to get through the situation. But knowing that
you have got a financial partner in an SBIC makes making that
investment easier unlike Claudio. You know, it is not all on
the individual to source that capital when you have an
institutional investor alongside as an investor.
Chairwoman DAVIDS. I appreciate that.
I guess in the remaining time, Ms. Glas, I would love to
hear from you. You mentioned quite a bit in your testimony, and
as you know, last year I introduced the Supplies Act which
would provide grant funding to small manufacturers who are able
to produce PPE and other emergency medical items during the
crisis. I am curious if you see a role for the SBA and other
Federal agencies to support domestic PPE manufacturing in the
long term.
Ms. GLAS. Absolutely. In fact, our industry collectively is
really seeking a long-term Federal Government plan associated
with onshoring PPE production. Our industry responded, provided
materials for the Strategic National Stockpile, FEMA, and
Defense Logistics Agency. And with the kind of investment that
you are talking about in your bill--about people being able to
invest in manufacturing equipment--we can be a globally
competitive industry. There is no doubt our industry has become
much more efficient since March of last year when they were
making products for the first time. They want to invest in
equipment in their manufacturing facilities to be more globally
competitive, but they also want a strong demand signal. We
think working with the Small Business Committee here; the SBA
leveraging those loans or grant opportunities; and working with
your agency partners across the Federal Government on
procurement policies and long-term contracts will ensure that
this small business community is supported in the long term, so
that we are bringing these supply chains home and reshoring
essential production like PPE.
Chairwoman DAVIDS. Thank you, Ms. Glas.
And thank you to everyone who answered my questions. My
time is now expired.
The Ranking Member, Mr. Meuser, is now recognized for 5
minutes.
Mr. MEUSER. Thank you again, Madam Chair.
Pennsylvania, my home state, the great Commonwealth of
Pennsylvania, is known as a manufacturing state. We have a long
history of coal, steel, garments is mentioned. Concrete,
masonry, fabricators, candy, beer, crayons, guitars, batteries,
airplanes to name a few. We have, however, suffered over the
last several years or over the last we will say 40 years and
for the last several years we made somewhat of a comeback.
Mr. Taylor, you and I both know well the statewide burdens
that exist in Pennsylvania related to taxes and regulations.
Can you speak about the importance of natural gas on how
natural gas creates competitiveness for our small and large
manufacturers?
Mr. TAYLOR. Yes, sir. I will be glad to.
Mr. MEUSER. As well as provides what is necessary for
manufacturing?
Mr. TAYLOR. Yes, sir. I will be glad to do my best with
that.
So in 2005, the Marcellus Shale Play was discovered and
starting 2008, production began in earnest. And the discovery
really is world historic. We are talking about trillions of
recoverable feet of natural gas. And so this has helped very
much to power our economy, but in thinking about what the other
testifier said about the need to reshore supply chains, that
Pennsylvania, along with having the methane, the natural gas
that is used for fuel and for electricity generation and
industrial furnaces, that we also have abundant natural gas
that comes with natural gas byproducts--ethane, butane,
pentane, propane, and natural gasoline and that there has been
an $8 billion investment by Royal Dutch Shell in Western
Pennsylvania for a facility to produce polyethylene, which
again is at the top of a value chain that can derive every kind
of plastic, Styrofoam and rubber and every kind of coating in
the marketplace. So that domestic source of this industrial
input I think is critical to making our supply chains resilient
and price competitive domestically.
Chairwoman DAVIDS. Thank you, Mr. Taylor. It appears as
though our Ranking Member might have had a technical difficulty
and dropped off. I think that we will probably come back with
approximately 2 minutes 40 seconds remaining for the Ranking
Member's questioning and then hopefully he will get to get back
on this so he can finish his questions.
So I think what we will do is go next to Rep. Marie Newman
from Illinois. You are recognized for 5 minutes.
Ms. NEWMAN. well, thank you, Chairwoman. And thank you,
Ranking Member. I hope you come back soon.
So thank you to all our guests this afternoon. It has been
great hearing your testimony. And thank you for offering
solutions. We love it when guests come with both problem and
solution, so thank you for that.
I am going to I think start with Ms. Glas because I think
she is the logical person to ask this question. But I would
open it to others if they have commentary.
In Illinois 3, we have an unusually high concentration of
manufacturers, and I work with a partner organization called
IMEC here in Illinois. And I think it is well-known in the
industrial Midwest, we have a lot of micromanufacturers. So in
my district, about 70 percent of all manufacturers are under 20
employees. And what that means is that that is a huge
employment base but we are particularly productive. And so with
that I have a couple of questions around that.
Those are the types of manufacturers that have kind of
suffered the most around things like reshoring. What I mean by
that is that I am a fan of bringing everything back here and
making sure our workforce and our production process, our
supply chain and our partners stay here. Some of the things
that I think are helpful in that mix are incentivizing business
partners. And so I guess I wanted to hear what your thoughts
are on incentivizing the customers of our micromanufacturers so
that they buy here, stay here, workforce is here, all of those
good things. So I will put myself on pause and I would love for
you to give us your thoughts.
Ms. GLAS. Congressman, thank you so much for that question.
You know, it is clear to me that you are very proud of the work
that is being done in your congressional district and the
ingenuity that exists with a lot of those small manufacturers
in a really dynamic period of time.
When you look at the customers for PPE, the biggest buyer
is not the U.S. Government. It is an important buyer, okay, and
we need to make sure we get all those roles right and help
reshore production. But I think a lot of our manufacturers,
similar to yours, are looking to sell their products in the
private marketplace--to hospitals, to other kinds of customers.
And are there ways that Congress can incentivize the customers
or even incentivize the actual manufacturers to produce these
products or purchase these products. We, as an industry, have
all collectively been talking about the fact that there may be
unique arrangements that can be made with hospitals and nursing
homes and others that would get an incentive for buying Made in
the USA product or get a better Medicare-Medicaid reimbursement
rate as a result. I think this is a time for creative thinking,
similar to the micro-manufacturers in your district who all
probably came together in unique partnerships during this
period; to think about what it would take to actually bring
some of these production teams on shore and how to incentivize
the private marketplace.
Ms. NEWMAN. And if any of our other guests have any
suggestions, I am all ears.
If you would like to go, Claudio, that would be great to
hear from you.
Mr. DENTE. I am sorry; I keep pressing the button up there,
not down there. I apologize for that, Representative Newman,
thank you. Great comments there, Kim.
The issue is not the end user. And I hope there are no
distributors on this call. Distribution is what I sell through,
and they are the people, the carrier to move product to the
end-user. The distributors are the challenge because they are
the ones that do not want to disrupt their current supply chain
which may be overseas. Right? So, your idea, Kim, about
incentivizing the end-user is great.
So, think about it like this: in our industries, in all
industries, there are buying groups. And buying groups create
and collect rebates. So why not create some type of rebate
program, some type of funds that go back to the end-user that
rewards them for working with American made manufacturers. That
is my comment.
Ms. NEWMAN. Great. Any of our other guests like to share
any thoughts?
Mr. TAYLOR. Yes, if I may.
Ms. NEWMAN. David.
Mr. TAYLOR. Thank you very much.
The kind of smaller companies that you are describing, very
important job creators, very important part of the overall
ecosystem of manufacturing. The smaller companies are more
vulnerable to disruptions and to pitfalls. One of the things
about the pandemic that has been hard to see is that you had
companies that really stuck their necks out by retooling to go
from the product that they knew to do something different that
was needed to cope with the pandemic, whether it was the
distillers putting out hand sanitizer or there was a company in
Pennsylvania that would make airplane parts and they converted
over to make ventilator parts. These companies took a risk and
one of the things that they really need from Congress is some
kind of safe harbor for protection against predatory lawsuits.
And that is something that in good faith I would like to see
Congress take up.
Ms. NEWMAN. When you say ``predatory lawsuits,'' give me an
example, David.
Mr. TAYLOR. Well, I mean, just being exploited----
Chairwoman DAVIDS. The gentlelady's time has expired.
Ms. NEWMAN. Oh, okay.
Mr. TAYLOR. Okay. Well, I will do my best to respond just
to say that opportunistic, inevitably when you are doing
something new you do not get it 100 percent right the first
time.
Chairwoman DAVIDS. Mr. Taylor, thank you for the follow up.
Thank you.
Ms. NEWMAN. Thank you, Chairwoman. Thank you, Chairwoman.
Chairwoman DAVIDS. Thank you. And we are actually going to
go back to Ranking Member Meuser who has returned. I believe
you had about 2 minutes and 45 seconds left.
Mr. MEUSER. Thank you, Madam Chair. I apologize about that
operational difficulty.
So Mr. Taylor, thanks for your answer related to natural
gas. Obviously, very important from a competitive standpoint as
well as manufacturing via the packer plants.
At the Federal level, what can we do? You brought up
workforce development. On a Federal level, what are your
suggestions providing for a stronger, more available workforce
availability, as well as comment on do you believe that
manufacturers who are not being able to bring their workforce
into their operation today will invest in robotics and other
machines so as those manufacturing jobs could be done forever
if they do not get fulfilled within the next year?
Mr. TAYLOR. Okay, Congressman, I will try to respond to
that. Certainly, the trend towards automation continues at
pace. And new technologies enable manufacturers to innovate and
increase their operational tempo. And so as a result of those
technology efficiencies that you see the manufacturing
workforce tighten but that those jobs that remain become much
more valuable. You know, certainly to have a pro-growth, pro-
production agenda for American manufacturing, valuing the way
that manufacturing is a positive dynamic for the quality of
life for our citizens, certainly in the communities where a
manufacturing entity is located, they are also, along with
being major employers they are also major taxpayers which makes
them important to state and local government as well. So it is
just the whole spectrum of competitiveness and having our
Federal Government recognize the contribution of domestic
manufacturing and to support it through all of those
competitive fundamentals. As for the workforce issue, I have
got to say it is the phoniest most multifaceted challenge that
we face. I do think that the one opportunity that is before us
as I mentioned, is working to reinvent our highly fragmented
job training and workforce development system. If Congress
would partner with the states to help to rationalize that, and
I am not just asking for the feds to block grants although that
would be awesome, but to work in partnership to allow the state
authorities to realign the program, to move money between the
silos, I think that there are huge savings that could be
realized. And again, we could get more bang out of what is
being spent without having to increase expenditures.
Mr. MEUSER. Thank you.
The plan to increase corporate net income tax, income
taxes, capital gains tax, what effect will that have on U.S.
manufacturing?
Mr. TAYLOR. It is very negative. And I would say that there
were two really positive things from the previous
administration's tax changes. Number one, bringing the rate
down to just slightly below the OECD average, that that greatly
improved competitiveness. And also, that there was an existing
penalty as it were for U.S. companies that earned profits
overseas that prevented them from bringing that money back to
the U.S. I actually know of one instance where a company in
Minnesota, it was easier for them to invert and become a
foreign company to be able to reinvest their overseas earnings
back in the U.S. and that is just perverse. We do not want
that. We want American global corporate leadership. And so I
would argue very strongly against changing the improvements
that were recently made.
Mr. MEUSER. Thank you. I yield back, Madam Chair.
Chairwoman DAVIDS. Thank you. The Ranking Member yields
back.
And next I would like to recognize Rep. Evans for 5
minutes.
Mr. EVANS. Thank you. Thank you, Madam Chair. Thank the
Ranking Member. It is good to see Mr. Taylor. It is a pleasure.
Ms. Glas, you stated that the U.S. needed stronger
workforce training programs. What percentage of textile
manufacturing businesses provide on-the-job training? Would on-
the-job training be more flexible with government assistance?
And what tools do textile manufacturers need to do more
recruiting?
Ms. GLAS. This is a quintessential and timely question,
Congressman Evans. You know, actually, business is starting to
come back but we simply do not have the workforce to fulfill
the orders, which is a missed opportunity for our industry. Our
industry does provide onsite worker training. We do heavy
recruitment at technical colleges. A lot of our manufacturers
do not have 4-year degrees. There is a pathway forward for good
paying jobs in our field, but we are having a hard time
retaining a workforce in this environment. And so if there are
incentives or ways to help bolster the domestic supply chain in
clusters for textile manufacturers to recruit additional
workers, or ways to incentivize small manufacturers to actually
help pay some of their workforce an additional bonus to work
during this time, those are all important tools in the toolbox.
But right now it is a real challenge across our industry to
retain a workforce in this environment. And part of it is
because COVID has impacted manufacturers' ability. People are
staying at home with their children. I mean, lives have been
disrupted incredibly and it has been really hard to recruit
people back into the workforce because they have other things
that are pulling at them at this time.
Mr. EVANS. Thank you.
I yield back the balance of my time, Madam Chair.
Chairwoman DAVIDS. Thank you. The gentleman yields back.
Next, I would like to recognize Rep. Van Duyne for 5
minutes.
Ms. VAN DUYNE. Great. Thank you.
I think all the panelists today have hit on issues with the
workforce. Mr. Taylor, you made a point in your testimony that
small employers are having to compete with the Federal
Government for workers thanks to the luxurious unemployment
benefits that are being offered currently. So not only is the
Federal Government hurting employers with extended benefits,
but they are also stagnating the workforce on learning skills
that they will eventually need to return to work. Can you
elaborate on how the extended unemployment benefits have
affected hiring and the workforce? And can you also explain a
little bit about your concern with workers not having the
skills needed when they do return to work?
Mr. TAYLOR. Yes. I will do my best to respond to that. And
again, it is an unintended consequence I am sure, but that
impulse to be generous of raising unemployment benefits beyond
what people would earn if they returned to work, it is keeping
people on the sidelines. It is essentially making the
government a competitive employer, like you are outbidding the
market. Surely there is a precedent in history with the New
Deal three letter agencies to give unemployed people work. But
at least in those instances they were actually engaging the
program participants. That they were doing work. They were
hopefully upgrading their skills. They were at least keeping
current and would have something that they could list on a
resume that employers know the longer somebody is on the
sidelines the more their skills degrade, the longer that gap
comes on their resume and the more difficult it is for somebody
to reenter the workforce.
Ms. VAN DUYNE. I appreciate that.
It is also evident by the testimony we have heard today
that small manufacturers, while agile and highly resilient, has
faced a tough time during COVID-19. President Biden has
proposed increasing corporate taxes among other tax hikes.
So Mr. Taylor, how would increased taxes affect small
manufacturers?
Mr. TAYLOR. Well, I mean, in Pennsylvania, about 80 percent
of our manufacturing employers, they are not C corporations.
They are S corps or LLCs or partnerships. So the higher
corporate tax rate again would hurt the big fish in the ocean
but because of supply chains and distribution networks, those
smaller companies that are suppliers or vendors or part of the
distribution for the major manufacturers, they would see less
business.
In my lifetime, the example, it would be when Bethlehem
Steel left Johnstown. And that not only do you lose that major
employer, but because so many of the smaller businesses were
part of that ecosystem as suppliers, they were part of
logistics, you know, forklift and warehouse jobs, you know,
people who do payroll or HR or legal services or any of those
things, if you lose what happens on the plant floor, all the
rest of it goes away. And so with our eye to competitiveness,
especially with reshoring in a very demanding global
marketplace, I would recommend strongly against raising the
U.S. tax rates.
Ms. VAN DUYNE. I appreciate that also.
Also in your testimony you mentioned the potential to cast
a wider hiring net, including those that had been incarcerated
before. Are there any regulatory burdens that make it difficult
to hire these types of workers and can they be changed to allow
employers to cast that wider net?
Mr. TAYLOR. Well, that is a great question and I really
believe it is the question of our time. I want to stay in my
lane here. I am an advocate in Pennsylvania on state public
policy but I would ask our Nation's leaders to look to
Pennsylvania because we have made a lot of progress. And that
in particular, our secretary of corrections, John Wetzel, has
been a real leader with corrections reform. Secretary Wetzel
is, himself, a former corrections officer so he has walked the
block. He was the only African American in Governor Corbett's
cabinet. He is now the only Republican in Governor Tom Wolf's
cabinet. And so there really is a bipartisan consensus on this.
And that is the upswing.
I remember being at a company out in Allegheny County and
most of their workforce is ex-military. They have very tough
standards and that they were one of those companies leaving
work on the table because they could not find enough new
people. And it was the owners there who said we are going to
have to cast the net wider. We are going to have to do better.
And so this is a moment where everybody needs to level up. But
if we do it, we can have real social progress because the jobs
in manufacturing that go wanting are really good paying, family
sustaining jobs with great wages and benefits and pensions. And
so I do not have all of the answers to know how we can make
that happen. Maybe Representative Evans and I need to work on
this together because we need to find a way to get those
citizens who have been outside the workforce, who have not
succeeded in our society. This gravitational pull of
demography, because there are more jobs available than people
looking for work, this should be the time when we help to bring
those marginalized folks back into the workforce, into
productive living, and into the dignity of work and the real
sense of identity that can come from having a profession and
still trade.
Ms. VAN DUYNE. Thank you very much.
Chairwoman, I appreciate that you extended time.
Chairwoman DAVIDS. Thank you, Rep. Van Duyne. The
gentlelady yields back.
First of all, I would like to say thank you to all our
witnesses for taking the time, for joining us today and sharing
your expertise. Your testimony has certainly given the
Subcommittee members valuable insight into the problems that
have been created because of the pandemic. And particularly for
our small manufacturers and the challenges that they are facing
moving forward. The pandemic has taught us a hard lesson in the
value of domestic manufacturing and a robust supply chain.
Today, we continue to feel the effects of supply chain
disruptions and shortages on our economy. And we obviously want
to avoid a repeat of this situation which means we have to find
ways to empower small manufacturers. One of the most common
sense ways to do that is by ensuring that they have ample
access to affordable capital, and I hope today's hearing has
shed light on critical SBA lending programs. And I am looking
forward to working with all of you to find ways to improve
them.
I would ask unanimous consent that members have 5
legislative days to submit statements and supporting materials
for the record.
Without objection, so ordered. And if there is no further
business to come before the Committee, we are adjourned. Thank
you very much.
[Whereupon, at 2:03 p.m., the subcommittee was adjourned.]
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