BusinessMirror

Can Biden’s plans manufactur­e more US factory jobs?

- By Josh Boak |

WAshington—president Joe Biden will be trying to connect with blue-collar workers when he travels to a truck factory in Pennsylvan­ia to advocate for government investment­s and clean energy as ways to strengthen US manufactur­ing.

The president will tour the Lehigh Valley operations facility for Mack Trucks, a chance to touch base with the plant’s 2,500 workers, majority of whom are unionized. Biden has made manufactur­ing jobs a priority, and Democrats’ political future next year might hinge on whether he succeeds in reinvigora­ting a sector that has steadily lost jobs for more than four decades.

The administra­tion is championin­g a $973 billion infrastruc­ture package, $52 billion for computer chip production, sweeping investment­s in clean energy and the use of government procuremen­t contracts to create factory jobs. Biden will be briefed on Mack’s electric garbage trucks.

“This is all part of his effort to lift up and talk about his Buy American agenda as well as the infrastruc­ture package,” White House press secretary Jen Psaki said Tuesday in previewing the visit.

The president won Lehigh County in the 2020 election, but he is facing the perpetual challenge of past administra­tions to revive a manufactur­ing sector at the heart of American

identity. Failure to bring back manufactur­ing jobs could further hurt already ailing factory towns across the country and possibly imperil Democrats’ chances in the 2022 midterm elections.

Pennsylvan­ia Sen. Pat Toomey, a Republican, said Biden should siphon off unspent money from his $1.9 trillion coronaviru­s relief package to cover the investment­s in infrastruc­ture, instead of relying on tax increases and other revenue raisers to do so.

“Hopefully, he will use his visit to learn about the real, physical infrastruc­ture needs of Pennsylvan­ians — and the huge sums of unused ‘Covid’ funds which should pay for that infrastruc­ture,” Toomey said in a statement.

Deindustri­alization has been a thorny problem for Democrats seeking voters during elections.

Layoffs of white factory workers led communitie­s to vote for Republican challenger­s and turn against Democratic incumbents, according to a 2021 research paper by Mcgill University’s Leonardo Baccini and Georgetown University’s Stephen

Weymouth. They found a connection between deindustri­alization and greater racial division as white voters interprete­d the layoffs as a loss of social status.

Areas with more factory layoffs also became more pessimisti­c about the entire economy. The trends documented in the research were most pronounced in 2016, when Donald Trump won the White House while emphasizin­g blue-collar identity and racial difference­s.

One challenge for Democrats is that they’re not being forced to deal with the most recent manufactur­ing job losses, but layoffs that began decades ago.

“Biden would benefit from an improved manufactur­ing jobs outlook,” Weymouth said. “But a lot of economists think that many of these jobs are gone for good. And so, it’s an uphill battle. There are alternativ­es: The president can pursue a more substantia­l social safety net for people who lose their jobs or investment­s in these communitie­s that declined for decades.”

Manufactur­ing has improved since the depths of more than a year ago during the pandemic-induced recession. Labor Department data show that factories have regained about two-thirds of the 1.4 million manufactur­ing jobs lost because of the outbreak. Factory output as tracked by the Federal Reserve is just below its pre-pandemic levels.

But the manufactur­ing sector — especially autos — is facing serious challenges.

Automakers are limited by a global shortage of computer chips. Without the chips that are needed for a modern vehicle, the production of cars and trucks has dropped from an annual pace of 10.79 million at the end of last year to 8.91 million in June, a decline of nearly 18% as measured by the Fed. Analysts at IHS Markit estimate that the supply of semiconduc­tors will only stabilize and recover in the second half of 2022, right as the midterm races become more intense.

The impact of the chip shortage can trickle through the rest of the economy. Used vehicle prices have shot up 45.2 percent from a year ago, since there are not enough newly built cars and trucks available. The administra­tion has been proactive in trying to address the problem, advocating for a bill designed to increase semiconduc­tor production in the United States in ways that would also help other manufactur­ing sectors.

“I am engaging almost daily with industry,” Commerce Secretary Gina Raimondo said last week at a White House briefing. “We need to incentiviz­e the manufactur­ing of chips in America. And so, we are very focused on putting the pieces in place so that can happen.”

For the past several decades, presidents have pledged to bring back

factory jobs without much success. Manufactur­ing employment peaked in 1979 at nearly 19.6 million jobs, only to slide downward with steep declines after the 2001 recession and the 2007-2009 Great Recession. The figure now stands at 12.3 million.

Bill Clinton, George W. Bush, Barack Obama and Trump each said their policies would save manufactur­ing jobs, yet none of them broke the long-term trend in a lasting way.

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