U.S. Manufacturing Loses 18,000 Jobs in April

By Matthew McMullan
May 07 2021 |
“This is another signal to Congress and the Biden administration that it is time to put bold industrial policies in place that are focused on procurement, trade enforcement, reshoring, innovation, and infrastructure,” AAM President Scott Paul said of Friday’s jobs numbers. Getty Images

The numbers show a clear need for significant industrial policy.

Today is the first Friday of May, so it’s Jobs Report Day. There’s new national employment data out from the federal Bureau of Labor Statistics. And the data is … kinda weak. Not what people expected, and not what they wanted to see:

The Chamber of Commerce has declared that this is because unemployment benefits, which often pay out more than minimum wage jobs, are discouraging workers from returning to the workforce. So they’re getting right to work on that – a lobbying effort to cut unemployment benefits.  

It’s just if not more likely, though, that schools staying closed, a lack of childcare, and parts shortages are responsible. That last part – shortages – are almost entirely what’s behind the drop-off in manufacturing employment. The manufacturing sector in sum lost 18,000 jobs last month, and auto manufacturing jobs alone dropped 27,000. And that’s because they can’t get enough semiconductor chips to keep production lines rolling.

The domestic auto industry just this morning urged Congressional leadership to support the Biden administration’s proposal that would allocate $50 billion to expand domestic semiconductor manufacturing capacity.

In a joint association letter, the industry writes:

So long as auto-grade chip production continues to be concentrated in foreign markets and demand for these chips increases as projected, American workers will face further layoffs due to future chip shortages. In our view, the most effective way to mitigate that risk would be to include specific funding for semiconductor facilities that commit to dedicating a portion of their capacity to motor vehicle-grade chip production. This will ensure that automakers have a fair share of the chips needed to meet consumer demand. The majority of the production capacity at these facilities would be available to fulfill orders from any sector. 

At any rate, the chip problem plaguing the auto sector underscores the need to reshore overstretched supply chains. Not calling for autarky here! Rather, we think it’d be a good idea to develop and encourage a fuller manufacturing ecosystem in the United States so industry will be more resilient in the face of future shortages.

Here’s Alliance for American Manufacturing President Scott Paul’s comment on today’s jobs report: