It’s a huge boost for manufacturing, but we aren’t popping the champagne yet.
The latest jobs numbers were unveiled on Friday morning by the Bureau of Labor Statistics, and they were pretty darn good: 23,000 new jobs were added in manufacturing in January, which is more than all of the jobs added to the sector in all of 2023.
That’s really encouraging news, especially considering that job growth was largely stagnant last year. And with factories being built across the country in growing industries like semiconductors, clean energy, electric vehicles, batteries, and more, we can expect to see a whole lot of additional jobs come online in the next few years.
Emphasis is on expect for a reason: Not all of these jobs are guaranteed. There’s still a lot of policy we need to get right to ensure that the country actually follows through on its work to grow and strengthen manufacturing. Here’s how Alliance for American Manufacturing President Scott Paul put it:
“Manufacturing added more jobs in the month of January than it did in all of 2023. That’s a promising start to the year. But there are looming threats on the horizon, including high borrowing costs and serious economic challenges in China that have already permeated the global market.
“Lawmakers can help by keeping the industrial policy framework in place that has led to record factory construction. The Biden administration and Congress must also apply strong trade enforcement or risk eroding America’s industrial renaissance. There is absolutely no reason to lower or weaken tariffs and other measures in place to defend our industries from foreign cheating, particularly from China.”
Let’s focus on two of the things Paul mentioned: Industrial policy and China.
There’s been a lot of attention paid to the passage of new laws like the Inflation Reduction Act, CHIPS and Science Act, and the Bipartisan Infrastructure Law, for good reason. These new laws have been critical to entice manufacturers to invest in U.S. factories in critical sectors.
But this needs to be the first step, not the final word. Take semiconductors, which has seen a robust $234 billion worth of planned investments since President Biden took office. That’s great… until you consider that semiconductors don’t work unless you have printed circuit boards (PCBs), and most of those are still made abroad.
According to the Printed Circuit Board Association of America, about 20 years ago the U.S. produced 26% of the world’s supply; it now makes just 4% — and 90% of the world’s PCBs now come from Asia. The association is now advocating for policy to make sure that we don’t just make more semiconductors locally, but also the circuit boards to run them.
Then there are electric vehicles. That’s an area where there certainly has been a whole lot of recent investment, with $157 billion worth of factories announced since 2021. But that pales in comparison with how much money China has been investing, and China is absolutely dominating the global EV market, along with other industries like batteries, critical minerals, and solar panels.
The U.S. needs to put policy in place to continue to encourage domestic investment in these key areas, but policymakers also need to recognize that China’s government is willing to spend whatever it takes and do whatever it takes to control as much of the market as possible. That’s where trade enforcement comes in.
Right now, for example, the only thing preventing cheap Chinese autos from flooding the U.S. market — as they have done in the European Union, South America, Australia, and all over the world, basically — is trade enforcement. As the New York Times explained:
One big market is conspicuously missing among leading destinations for Chinese car exports: the United States. Almost no Chinese cars are going there now, and few are expected to do so soon.
When the Trump administration imposed tariffs on imports from China in 2018 and 2019, the first batch included 25 percent levies on gasoline-powered and electric cars and on gasoline engines and electric car batteries. Not only are the tariffs still in place, but they were issued under legislation that gives broad discretion to the United States trade representative, currently Katherine Tai, to increase them if needed.
And the Biden administration is said to be doing just that, seeking to limit China’s reach into the all-important U.S. auto market.
Friday’s jobs numbers really highlight the opportunity the United States has to create potentially hundreds of thousands of well-paid factory jobs in the next few years. Doing so will require a commitment from policymakers to get the job done.