Biden’s Economic Policies Highlighted as Key to Resurgence in Manufacturing Jobs

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The revival of manufacturing jobs has consistently been a prominent pledge from the White House, irrespective of the sitting president. Various strategies have been proposed by different administrations: Donald Trump advocated tariffs, Barack Obama pushed for “insourcing” by companies, and George W. Bush promoted tax cuts. Despite these efforts, the reemergence of factory jobs after each recession remained a challenge.

On Wednesday, President Joe Biden will use a speech in New Mexico to present his argument that his financial and tax incentive policies have successfully rejuvenated U.S. manufacturing. This assertion is supported by an increase in construction expenditure for new factories. However, recent months have seen a slowdown in factory hiring, indicating that the projected boom has not yet fully materialized.

Nonetheless, the White House continues to assert, in anticipation of the 2024 election, that Biden’s agenda has ushered in a “renaissance” in factory employment.

White House climate advisor Ali Zaidi informed reporters prior to Biden’s New Mexico speech that “hundreds of actions coordinated through his entire government are sparking a manufacturing renaissance across the United States.” Zaidi urged them to envision a bustling job fair in Belen, New Mexico, where Arcosa plans to employ 250 workers for a wind tower factory.

Biden’s speech coincides with the commencement of construction at Arcosa’s plant, previously dedicated to producing Solo cups and plastics. The White House reported that Arcosa had to lay off workers in Illinois and Iowa before the Inflation Reduction Act was enacted last year. However, the company received $1.1 billion in wind tower orders after the law’s passage. The company’s stock has risen by over 20% in the last year.

Biden’s message on job creation is a recurrent theme. During a recent visit to a Philadelphia shipyard, he emphasized how his policies to combat climate change, including transitioning away from fossil fuels, can concurrently generate employment opportunities. This conveys his intention to depict his social and environmental initiatives as beneficial for economic expansion.

“A lot of my friends in organized labor know: When I think climate, I think jobs,” Biden stated. “I think union jobs. Not a joke.”

Biden’s journey to the Southwest is influenced by his reelection campaign and the challenge of convincing a majority of American adults that the economy is in a favorable state. He aims to overcome the deep pessimism that escalated due to inflation spikes in the past year. His itinerary encompassed a speech in Arizona on Tuesday and will conclude with remarks in Utah on Thursday. In the 2020 election, Biden secured victories in both Arizona and New Mexico, pivotal states for his potential reelection.

The President has a compelling case to present to the public regarding employment. As the U.S. economy recuperated from the pandemic, factory hiring experienced a significant surge. Manufacturing employment reached its highest point in nearly 15 years, marking the first complete recovery from a recession since the 1970s.

However, the pace of job growth within the manufacturing sector has decelerated in the past year. While factories were adding around 500,000 workers annually last summer, the most recent jobs report from the government indicated a gain of 125,000 jobs over the past 12 months.

The administration contends that more manufacturing jobs are forthcoming due to infrastructure investments, advancements in computer chip plants, and incentives from the Inflation Reduction Act of the prior year. They assert that these incentives spurred private sector investments, resulting in commitments worth $500 billion for producing computer chips, electric vehicles, advanced batteries, clean energy technologies, and medical goods. Additionally, they highlight a nearly 100% increase in factory construction spending since the end of 2021 after adjusting for inflation.

A report from the Economic Innovation Group (EIG) in April dubbed factory construction spending a “nationwide boom.” This report emphasizes that manufacturing gains are notably prominent outside the Midwest, historically associated with the sector, as more factories emerge in southern and western states. However, EIG remains uncertain about a complete restoration of manufacturing, given the sector’s prolonged decline.

Labor Department statistics reveal that total factory employment peaked at nearly 19.6 million jobs in 1979. Presently, with just under 13 million manufacturing jobs, a return to that level seems unlikely due to automation and trade dynamics.

Adam Ozimek, the chief economist at EIG, argues that jobs might not be the best metric to gauge a manufacturing revival. He suggests that better indicators include increased factory output, the transition to renewable energy for climate change mitigation, and the achievement of stronger national security supply chain goals.

“It’s way too early to declare anything like a manufacturing renaissance,” Ozimek cautioned. “We are decades into structurally declining manufacturing employment. And it’s not at all clear yet whether the positive trends are going to outweigh that continuing headwind.”

Frequently Asked Questions (FAQs) about manufacturing job revival