Revitalizing Factory Jobs: Evaluating Biden’s Manufacturing Renaissance

Throughout the annals of White House history, the resuscitation of factory jobs has been a resounding promise, irrespective of the occupying president. With varying strategies, from tariffs under Donald Trump to insourcing championed by Barack Obama and tax cuts touted by George W. Bush, the revival of factory jobs has proven elusive after each economic downturn.

President Joe Biden is now poised to champion his approach in a speech in New Mexico, showcasing how his financial and tax incentives have reinvigorated U.S. manufacturing. This assertion finds support in the uptick in construction spending for new factories. However, a sluggishness in factory hiring of late raises questions about whether the promised boom is still on the horizon.

Despite this, the White House remains undeterred, heralding a “renaissance” in factory work as a result of the Democratic president’s policies. White House climate adviser Ali Zaidi depicted a vivid picture of a bustling jobs fair in New Mexico, illustrating Arcosa’s plan to employ 250 workers for their wind tower factory.

The significance of this narrative is punctuated by the president’s visit to Arcosa’s plant, a former Solo cups and plastics facility. This transformation, made possible by the Inflation Reduction Act, has led to a surge in orders amounting to $1.1 billion for wind towers, propelling the company’s stock up by over 20% in the past year.

Biden’s commitment to job creation is a recurring theme. In a recent address at a Philadelphia shipyard, he linked climate change mitigation to job generation, emphasizing his intention to align social and environmental initiatives with economic growth.

The President’s trip to the Southwest carries undertones of his re-election campaign and the challenge of combating the perception of a struggling economy held by a majority of U.S. adults. As inflation surged, pessimism deepened, making it crucial for Biden to regain public confidence. His recent speeches in Arizona and Utah underscore this effort, especially given that these states played a pivotal role in his 2020 victory.

There is merit to Biden’s claims regarding employment. As the nation recuperated from the pandemic, factory hiring surged, propelling manufacturing jobs to a 15-year high. This feat, a first since the 1970s, marked a complete recovery of manufacturing employment post-recession.

Nevertheless, the pace of manufacturing job growth has tapered over the past year. Whereas factories were once adding around 500,000 workers annually, the most recent jobs report only indicated a gain of 125,000 over the past 12 months.

Biden’s administration posits that more factory jobs are in the pipeline, thanks to infrastructure investments, funding for computer chip plants, and the incentives enshrined in the Inflation Reduction Act. The private sector’s response to these incentives has reportedly led to $500 billion in commitments for products such as computer chips, electric vehicles, advanced batteries, clean energy tech, and medical supplies. Additionally, factory construction spending has surged nearly 100% in real terms since the end of 2021.

An April report by the Economic Innovation Group lauds the burgeoning construction spending on factories as a “nationwide boom.” Notably, the resurgence seems to be gaining ground beyond the traditional Midwest stronghold, with more plants cropping up in southern and western states. However, this report cautiously avoids proclaiming an absolute restoration of manufacturing, given the sector’s protracted decline.

Historical data from the Labor Department highlights the peak of factory employment in 1979, hovering around 19.6 million jobs. Presently, with approximately 13 million manufacturing jobs, an eventual return to the peak seems unlikely due to automation and trade dynamics.

Adam Ozimek, Chief Economist at the Economic Innovation Group, argues that focusing solely on job numbers might not fully capture the manufacturing revival. He contends that other metrics, including increased factory output, the transition to renewable energy to combat climate change, and the establishment of a robust supply chain for national security, should also be considered.

In Ozimek’s perspective, it’s premature to declare a manufacturing renaissance, as structural declines in employment continue to be a significant factor. While some encouraging trends are emerging, the balance between these trends and the persisting challenges remains uncertain.

President Biden’s pursuit of a manufacturing revival is evident through his economic policies, as exemplified by his New Mexico speech. While there are signs of progress, the path to a comprehensive resurgence of manufacturing is fraught with challenges. The balance between job growth, environmental sustainability, and national security remains a delicate equation that will define the ultimate success of his vision.