The Washington Post

The myth of a manufactur­ing comeback

- CATHERINE RAMPELL

President Biden has lately been celebratin­g the triumphant return of “Made in America.” “‘Make It in America’ is no longer just a slogan; it’s a reality in my administra­tion,” Biden said last week. Days later, he boasted about “finally bringing home jobs that have been overseas for a while.” These are among many comments touting a supposed manufactur­ing comeback, based on recently-announced plans for factories that will produce semiconduc­tors, electric vehicles and fiber-optic cables. It’s these new factories, Biden says, that will power job growth “from the bottom up and the middle out.”

Such rhetoric is compelling: What redblooded American doesn’t love the idea of bringing home manufactur­ing jobs? But it gets the issue wrong in a few interconne­cted ways.

Contrary to myths that we’ve stopped “making” things in the United States, we already manufactur­e a lot of stuff here. In fact, we manufactur­e nearly the most “stuff ” on record, as measured by the inflation-adjusted value of those products. We just happen to make that stuff with fewer workers than we used to, because technologi­cal advances have led to huge productivi­ty gains.

To oversimpli­fy: U.S. factories still make things, but those things are increasing­ly produced by robots.

This is true even for some of the iconic American industries that have supposedly petered out. The United States produces about as much steel today as it did three decades ago, for example, with about half as many workers.

This is not a new phenomenon. Back in 1870, roughly half of workers were in farming. Mechanizat­ion has brought the share down to about 1 percent today. That’s not a tragedy; it’s a triumph of human ingenuity. We can feed more people with less physical labor required.

Similarly, the manufactur­ing industry’s fraction of total employment peaked back in the 1940s, based on available records, and has been mostly trending downward ever since. In fact, while Biden can honestly tout manufactur­ing job growth on his watch, the share of total jobs that are in manufactur­ing remains near a record low — roughly 8 percent of total non-farm jobs.

Why belabor this labor history? It’s to show that it is risky to count on a supposed manufactur­ing comeback to power a jobs boom in the years ahead. Building more physical “things” in this country does not guarantee huge job growth, much less “bottom-up” job growth.

That’s true even if we invest in manufactur­ing the technologi­es of “the future,” as Biden frames it. In fact, as the country transition­s to electric vehicles, employment in the U.S. auto manufactur­ing industry is likely to shrink — even if that EV manufactur­ing happens here in the United States. That’s because electric cars, having fewer parts than convention­al vehicles, will ultimately require less labor to produce.

Now, you might argue that even if that is true, we still want to ensure that at least those (fewer) jobs will be located in the United States. Hence the new restrictio­ns for EV tax credits in Biden’s Inflation Reduction Act. Under the law, these subsidies will go only to cars whose supply chains are moved out of not just China but also Japan, the European Union and many other “friendly” countries. That process will take a while.

This strategy might eventually squeeze out a few extra U.S. jobs — again, probably not that many. But it has costs, both for consumers and, more importantl­y, for climate goals. Fitch Solutions recently projected the law would slow EV adoption, especially among low- and middleinco­me consumers, because (at least in the near term) no EVS will likely qualify for federal tax credits.

Nonetheles­s, Americans remain nostalgic for an era when manufactur­ing employed more of the U.S. workforce. That’s what Biden is tapping into. Presumably what Americans miss, though, is not the specific mid-century factory jobs themselves, which were often backbreaki­ngly difficult — but rather, the solid middle-class wages they offered, even to high school grads and dropouts.

That is probably not something that can be reproduced today, at least not for those jobs, not at the same scale. The manufactur­ing jobs that will persist will likely require more education and training than in the past. In fact: they already do. So what should politician­s focus on instead?

Perhaps, all the (nonphysica­l) things also “made” in the United States that somehow get ignored by the usual “Made in America” framework. Think: Engineerin­g. Graphic design. Entertainm­ent. Cloud computing. Logistics. Advertisin­g. Higher ed. Finance. Medicine.

The United States is a services-based economy. We are really, really good at producing services in America, and employing Americans in service-sector jobs.

It’s true that some low-level service-sector jobs are poorly paid, unpleasant, even backbreaki­ng. But the solution is not to promise to revive some halcyon manufactur­ing-centric labor market that will never return. It’s to automate as much of the unpleasant, poorly-paid work as possible, or at least make it more humane; and get more U.S. workers trained for better, highpaying jobs — whatever sector they’re in.

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