The pandemic and supply chain challenges brought home the dangers of relying too much on imports. Now the U.S. must take advantage of a historic opportunity to grow its own manufacturing base.
Factories gained 26,000 new jobs in December 2021, according to official figures released by the Labor Department on Friday. It followed the trend lines for much of the year, as manufacturing showed steady job growth throughout 2021, posting 349,000 new jobs total.
The sector still needs to create 219,000 jobs to gain back everything lost since February 2020, when shutdowns in response to COVID-19 began to take hold. But given the pandemic and a whole host of other challenges, the fact that manufacturing added hundreds of thousands of new jobs in 2021 is welcome news.
And here’s some additional good news: The current signs point to this job growth continuing.
First, the combination of America’s unpreparedness at the start of the pandemic and the supply chain challenges of 2021 already have led companies to look to boost domestic production and bring more manufacturing to U.S. shores. Several new semiconductor factories have been announced in response to those shortages, for example.
The impending transition to electric vehicles (EVs) and clean energy also is spurring domestic investment. General Motors and Ford are among the automakers who are investing billions of dollars into new and existing facilities to build EVs. Just this week, Ford announced it is doubling production of its electric F-150 due to consumer demand.
That also extends to the auto supply chain. Rocked by the shortages of 2021, automakers are investing a whole lot of money in localized supply chains for things like batteries, which will be needed to power all those new electric vehicles.
On the clean energy front, there have been several recent announcements of new facilities for things like solar panels and wind farms, including a new United Steelworkers (USW) represented steel facility at Baltimore’s Sparrows Point to build the foundations needed to anchor wind turbines to the ocean floor.
Domestic manufacturers also have been touting the benefits of staying local. Bayard Winthrop, the CEO of famed clothing manufacturer American Giant, told Fast Company that things may finally be at a tipping point for many apparel companies.
“Big apparel has contorted itself around this enormously complicated and fragile supply chain to save pennies,” he said. “When a pandemic hits—or a tanker gets stuck in the Suez Canal—it disrupts everything. Brands are beginning to see that when your supply chain is domestic, you’re inoculated from all that.”
So, there’s no question that there’s a desire to grow domestic manufacturing in these key areas, and for the first time in a long time, there have been some pretty big investments announced. But will it last?
One of the lessons of the big solar push of the early 2000s is that it isn’t enough to have demand; it’s vital that the right policy be put into place to help domestic production truly take hold and thrive. Countries like China are making incredible investments to control global industries – and as readers of this blog well know, are willing to play dirty to win.
If the United States doesn’t take steps to help its own manufacturers and workers compete, it will lose. Full stop.
But, dare we say… we are actually kinda sorta optimistic that policymakers understand this, too?
The $1.2 trillion infrastructure investment package signed into law in 2021 offers major potential for American manufacturers. Not only does it include things like money to rebuild roads and bridges, it also sets out to make investments to build things like EV charging stations.
Implementation will be critical – making sure the strong Buy American preferences included in the law are properly applied will be necessary to maximizing job growth. As a start, policymakers should fully fund the new Made in America Office at the Office of Management and Budget so folks will be ready and equipped to get to work on implementation.
But there’s additional opportunities as well. The so-called China Competitiveness Bill, passed in a bipartisan vote by the Senate last year, included $50 billion for boosting semiconductor production and hundreds of billions for research and development. Similar legislation stalled in the House, but the overall effort has the support of the White House. Getting a competitiveness package through Congress in 2022 must be a priority for lawmakers.
While the U.S. makes investments in its own industries, it also must be willing to enforce its own trade laws to counter China’s rampant trade cheating and, even more importantly, human rights violations. The Uyghur Forced Labor Prevention Act, signed into law by President Biden on Dec. 23, 2021, bans imports from the Xinjiang region in China, where experts believe a genocide is taking place. The Biden administration must be willing to enforce this critical measure – including by standing up to the corporations who have pathetically lobbied against it and continue to do business in Xinjiang now.
It’s no secret that China’s government wants to dominate industries, including traditional sectors like steel to emerging industries like EVs and more. Trade action has proved effective in countering China in the past, and the administration shouldn’t be afraid to act in the future when necessary.
The United States is at a pivotal moment. All signs point to an increase in domestic manufacturing, particularly in emerging sectors, many of which enjoy robust union participation. If we are able to seize this moment, it truly could be transformational.