Factories Gained 27,000 Jobs in July

By Elizabeth Brotherton-Bunch
Aug 06 2021 |
The entire economy gained 943,000 jobs in July. But will the hiring last? Getty Images

The sector remains down 433,000 jobs since COVID-19 shutdowns began in February 2020, and ongoing supply shortages continue to plague factories.

Jobs are on the upswing for manufacturing, as the Labor Department reported on Friday that the sector gained 27,000 new jobs in July. The entire economy added 943,000 jobs last month, the best monthly performance since August 2020.

But don’t break out the champagne yet.

While the economy is currently heading in the right direction after a historically challenging year and a half — White House aides are even calling it the “Biden Boom” — there are plenty of hurdles in the way that could throw things back off course fairly quickly.

First is the Delta variant. Surging COVID-19 cases are leading to restrictions that some fear will dampen the recovery. Should the caseload continue to rise and shutdowns go into effect again, that almost certainly will put things into reverse. (Yet another reason to go get your COVID-19 vaccine if you haven’t!)

It’s not just Delta itself that could cause problems for manufacturing jobs. Supply shortages, stemming in large part of the last round of shutdowns, continue to lead to temporary shutdowns at factories across the country.

Semiconductor shortages have caused numerous production shutdowns for the auto industry, which has lost billions of dollars in sales as a result. But the shortages also have led to problems for consumer electronics like iPhones and XBox consoles, and other industries also have faced shortages due to the lingering effect of shutdowns last year. Experts predict school supplies will be in short order this year, for example.

Yet… there is some reason for optimism.

The Biden administration announced action in June to address supply chain shortages and boost U.S. production of critical industries like semiconductors. Intel, meanwhile, announced earlier this year it will build two semiconductor plants in Arizona. While things aren’t likely to improve overnight — it can take years to stand up a semiconductor factory, for example — the fact both the public and private sector understand the need to invest in American production is a good sign.

It shouldn’t be just semiconductors, either. Policymakers also must take steps to support American production of PPE and other critical products, which will support job growth right now and better position us for the next crisis, whenever it comes.

The U.S. also can spur the creation of good-paying jobs by investing in emerging sectors, including electric vehicles (EVs). President Biden announced on Thursday a target that half of all U.S. auto sales by 2030 will be of zero emission vehicles like EVs. But policymakers also need to take action to ensure that all of those cars, trucks and SUVS — and the supply chain and infrastructure needed to keep them up-and-running — are Made in America, too. Countries like China already are in the lead when it comes to EV production. It’s time for the U.S. to get into the race.

And no surprise here: Investing in infrastructure also will be key. Not only will the actual construction of infrastructure create millions of new jobs, rebuilding America’s crumbling roads, bridges, pipelines, electric grid, public transit and more will be good for business. It will make the United States more competitive on the world stage, leading to more investment and job creation.

Manufacturing is slowly gaining back the jobs lost due to the pandemic. But there’s a long way to go, and it will take a long time to reach pre-pandemic levels at the current pace. But by taking specific policy steps, we can supercharge that job growth and ensure the United States emerges stronger from the pandemic.