Obama's Message May Be Lost in Service Economy

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July 30 (Bloomberg) -- Bloomberg Economics Editor Michael McKee sets the scene ahead of President Obama's speech at an Amazon.com fulfillment center in Chattanooga, Tennessee where he is expected to propose a corporate tax overhaul to spur job creation. He speaks on Bloomberg Television's "Market Makers."

Why is chattanooga and not choice for the announcement the president is going to be making?

-- why is chattanooga and odd choice customer he is going to give us a metaphor.

This is what a package and ship all of the stuff we buy online, to talk about the importance of manufacturing and high wage jobs.

The trouble is amazon is neither.

Service industry jobs at this warehouse and they don't pay all that much.

It's a metaphor for what has happened to the overall economy over the last several years.

We make a lot of stuff, but we don't need a lot of people to make it.

Specialty chemicals, volkswagen and little debbie cake bars are made here, but manufacturing is a smaller and smaller part of the economy area -- part of the economy.

The ticket to the middle class that she used to have here is gone.

We also love to go online because we save money and it is convenient area we are trying to get the lowest possible cost, and that is driving the wage scale.

Amazon starts its workers at $11.50 an hour, lower than the median wage in chattanooga and lower than the national median wage.

At this point, you see an economy transitioning from manufacturing to services, incomes are down, and it's no wonder people don't feel good even a they are getting jobs.

They are happy to have jobs year, but they are not making a lot of progress.

And amazon warehouse may not be the perfect device for the president, but what impact would his tax plan have on a place like chattanooga or the industries you're talking about?

It is ironic because it really wouldn't help both.

Chattanooga depends on a lot of foreign direct investment.

It's not going to help those companies.

Amazon has very little cash on its balance sheet.

I tend to spend their money building these kinds of centers.

I talked to the director of economic development.

He would rather see obama talk about free trade.

Creating high wage jobs and manufacturing jobs in general is very challenging.

We have significant issues and we are focused on free trade , which is something the president can play a role in.

Chattanooga had a good opportunity with ally and we lost that to mexico.

One of the reasons we had was the free-trade agreements mexico as compared to the united states.

We see that growth and the potential for foreign direct investment to continue as a big opportunity for us.

He has a good point there -- as hans nichols said, those free-trade negotiations underway right now is something obama might be able to influence that may create jobs.

The chamber in chattanooga wants free trade, but if you ask ceos across the country what they want is holiday on repatriating overseas profits.

Where does that stand?

At this point, the republicans are not in favor because of the consequences of revenue.

Why would they bring money back here and spend money to expand its plant and facilities when demand is so low when need -- we need companies growing faster.

They spent all of the money on dividends and stock buybacks instead of expanding their facilities and adding jobs.

The president makes his view -- makes his remarks a few hours

This text has been automatically generated. It may not be 100% accurate.


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