It’s good for workers. It’s good for national security. It’s good for the United States of America.
When Congress passed the $1.2 trillion infrastructure investment package in 2021, it included legislation called “Build America, Buy America,” designed to ensure that all federally funded infrastructure projects are Made in America. Prior to the bill’s passage, Buy America laws only applied to some infrastructure — transit, highway, water and aviation — but not others, like broadband, the electric grid, and electric vehicle charging stations. The new Buy America law also broadened the types of products and materials covered by Buy America, including commonly used construction materials like copper, aluminum, glass, lumber, drywall, and fiber optic cables.
Now the infrastructure bill is being implemented, and it’s essential that Build America, Buy America is properly enforced.
In the entry below, we put together 10 reasons why Buy America works. You can help, too: Tell your state transportation officials to fully enforce Build America, Buy America.
No. 10: Buy America Maximizes Taxpayers’ Investment
There are plenty of studies out there highlighting the economic benefits of infrastructure investment, and the $1.2 trillion package passed by Congress in 2021 is already doing a whole lot to boost the economy. Buy America has the potential to provide an additional boost.
Buy America is smart policy because it makes sure taxpayer money spent on infrastructure is reinvested right back into American workers, manufacturers, and communities. At a time when the United States is working hard to reshore critical manufacturing and supply chains, it just makes sense to take advantage of any opportunity to support local manufacturers and encourage others to invest here as well — something that will pay economic dividends for years to come. Without Buy America, that money could be spent on foreign-made goods, supporting companies abroad and a missed opportunity for long-term economic growth at home.
To put it simply: Buy America offers more bang for taxpayers’ buck.
No. 9: Buy America Doesn’t Just Create Jobs, It Creates Good Jobs
Millions of new jobs will be created by infrastructure projects. By investing taxpayer money locally, Buy America helps support additional job growth. In fact, maximizing domestic content in infrastructure can increase factory job gains up to 33%, according to researchers at the the University of Massachusetts Amherst.
And these jobs are the types of high wage jobs we want to create, especially for workers without a college degree. The Economic Policy Institute reported in 2022 that at least 3 million new jobs can be created in manufacturing and construction thanks to infrastructure investment and related industrial policy efforts. These jobs, EPI notes, pay a big premium, with higher wages and benefits compared to service sector jobs. Workers without a college degree and workers of color stand the most to gain, EPI reports.
“Policymakers must implement smart trade and industrial policies to maximize the jobs and benefits created by the current investments in infrastructure and clean energy and significantly boost those investments to match the scale of the need,” EPI argues. “These policies include aggressive and expanded use of Buy America programs, which should be applied to as much of new investments as possible.”
No. 8: Buy America Incentivizes New Investment, Helping to Close Production Gaps and Strengthen Supply Chains
The United States spent decades putting policy in place that favored the offshoring of production, leading to supply shortages and gaps in our critical supply chain. Buy America is one way policy can help incentivize the reshoring of this production.
New laws like the infrastructure law, CHIPS and Science Act and Inflation Reduction Act already are providing a big shot in the arm for American manufacturing. There were dozens of major factory announcements made in 2022, from the upcoming Intel semiconductor facility in Ohio to the new Corning fiber optic cable facility in Arizona. Buy America, in fact, was cited as the impetus for that new Corning factory, and the company has invested $500 million to ramp up its domestic production in order to meet the requirements for new government contracts.
Even when gaps in domestic production are discovered and waivers are granted, Buy America is still working as intended. Those waivers allow policymakers to examine where investment is most needed to incentivize future production, helping to build a stronger domestic manufacturing base.
No. 7: Buy America Prevents the Offshoring of Critical Production
In the absence of strong Buy America policies, taxpayer spending too often rewards companies that have moved their operations and jobs offshore. And the incentives for offshoring abound, from exploitative labor conditions and lax environmental standards (more on those in a bit) to bad trade policy decisions that undermine American workers and manufacturers.
That’s why Buy America matters. American taxpayer money shouldn’t underwrite the loss of American jobs and factories. Instead, we should be doing everything in our power to keep this production stateside, and support those companies that are doing just that — firms like Mueller, which employs thousands of union workers at facilities across the country to make fire hydrants.
No. 6: Buy America Boosts Production in Emerging Sectors
The clean energy future is coming — and we’ve got to make sure it will be Made in America.
Luckily, we know what has to be done, and policymakers already have taken big steps forward. The passage of the Inflation Reduction Act marked a big turning point, as it incentivizes domestic production in emerging industries like solar and electric vehicles. The new law notably includes bonus credits for meeting domestic content requirements, which the Treasury Department notes “will further support good-paying manufacturing jobs in the clean energy supply chain.”
No. 5: Buy America Strengthens National Security in Strategic Areas
The loss of American factories over the past several decades significantly weakened our national security and military readiness, as the United States became dependent on China and other potential adversaries for far too many supplies and inputs. It’s frankly shocking how much our military depends on imports. The United States is almost entirely reliant on China for rare earth minerals, which are needed for everything from guided weapons systems and fighter jets to night vision goggles and communications devices.
Buy America can play a key role in strengthening our defense, encouraging defense contractors to make products locally and allowing the Defense Department to identify strategic gaps — and then close them. As one former National Security Council official put it, Buy America policies “reflect the strategic reality that, in an era of great power competition and the prospect of conventional warfare on an industrial scale, the United States must maintain key capabilities domestically.”
No. 4: Buy America Aligns Taxpayer Money with Strong Labor and Environmental Standards
It’s not a secret that one of the reasons why corporations shifted so much manufacturing abroad in the past several decades is due to cheaper labor, and it’s also not a secret that a lot of those foreign factories exploit workers. But sadly, it’s only gotten worse over the years. America’s dependence on goods from China has made us far too reliant on forced labor for the things we need, as everything from automobiles to clothes to solar panels to vinyl flooring are connected to forced labor in the Xinjiang region.
On the environmental front, things aren’t much better. Moving production abroad essentially outsourced America’s pollution to countries with less stringent environmental guidelines; countries like China continue to increase their coal emissions.
Taxpayer money simply shouldn’t go to places that uphold terrible environmental practices — or worse, to buy products that were made via forced labor. The United States is by no means perfect when it comes to labor or the environment, but there are much stronger laws in effect here compared to other countries, and there are mechanisms to help address them. By directing taxpayer money to American-made goods, Buy America helps align our spending with better practices.
No. 3: Buy America Allows for Better Oversight of Government-Funded Projects
Americans generally hate wasteful government spending. Knowing this, one of the things Buy America critics love to argue is that these preferences cost too much. Instead of working hard to find American producers of goods, just buy the cheap foreign stuff.
But cheap ain’t cheap.
We already know that buying foreign goods with taxpayer dollars is a missed opportunity, as we lose the chance to invest in U.S. workers and manufacturers, strengthen American production capabilities and reshore critical supply chains. But even if you don’t care about those things, relying on foreign companies to build American infrastructure is bad policy because it makes it harder to conduct oversight. That often leads to increased costs, which often means you don’t end up saving any money anyway.
And oh, have there been examples of projects going off the rails.
There is the infamous Bay Bridge project in California, which utilized Chinese-made steel in an attempt to save taxpayer money only for it to go well over budget and years over deadline. Up in Boston, there’s the ongoing boondoggle involving the Chinese state-owned company that was hired to build new rail cars. Yet again, officials were promised a bargain — only to have the whole thing fall apart.
Anybody who has ever remodeled their house will tell you construction projects run into problems. But they’re a whole lot easier to monitor when they are happening in your own backyard — not halfway around the world.
No. 2: Buy America Rewards Companies for Doing the Right Thing
It isn’t always easy to maintain an American factory. Manufacturers face all sorts of hurdles, including being undermined by the unfair trade practices of foreign countries. But the United States needs manufacturing for our national and economic security. Shouldn’t we use our taxpayer dollars to support those who are making stuff here, considering it is in our national interest?
We mentioned Mueller above, which employs a union workforce to manufacture its fire hydrants. America needs fire hydrants; it’s a good thing that we can make them here and employ people in well-paid jobs to make them! But there are other examples, too. Liberty Tabletop is America’s only remaining flatware manufacturer. When the government buys flatware, shouldn’t it support a company that is keeping this production here?
No. 1: Buy America is Popular Among the American People
Across the political spectrum, Americans are hugely supportive of Buy America. One recent poll found that 83% of registered voters prefer taxpayer money utilize American-made products like iron, steel, and other construction materials over imports; Democrats (82%), Independents (80%) and Republicans (87%) all agreed.
Are you among the Americans in support of Buy America? Join us in telling state transportation officials to fully enforce the Build America, Buy America preferences in the new infrastructure law.