“Companies rushed to break ground on new factories in hopes of winning those federal incentives, driving industry spending on construction to record heights. And politically, Democratic advisers said, the building frenzy provides signs of progress that Biden can point to in nearly every state.
“By the end of the election, every voter in battleground states is going to hear this story about what he’s done to invest in America’s economic future,” said John Anzalone, the founder of Impact Research and a longtime Biden pollster. “That is just not a message that Trump has.”
Yet central to Biden’s story of a manufacturing comeback is the prospect of thousands of new jobs spurred by his new laws — and so far, those have been slow to materialize. While Biden often touts the nearly 800,000 manufacturing jobs created during his presidency, the vast majority came prior to passage of the IRA and CHIPS, when Americans’ surging demand for goods during the pandemic drove a rapid industry recovery.
Since then, hiring has stalled as the economy evened out, with manufacturing-centric swing states like Michigan, Wisconsin and Pennsylvania actually losing factory jobs in 2023.
Those conditions have left Biden selling a manufacturing jobs boom that may not arrive in full force until well after November. Most companies that broke ground after Biden’s economic bills became law in August 2022 won’t have their new plants up and running until later this year — at the earliest. In high-profile setbacks for the White House, chipmakers TSMC and Intel have both signaled plans to delay production at their newest U.S. factories until 2025.”
“Toy makers grappling with surging costs in China are finding no easy options when it comes to shifting production to cheaper centres elsewhere.
Six years ago, monopoly maker Hasbro approached Indian durable goods and aerospace supplier Aequs to sub-contract.
“They said if you can get into toy manufacturing, now we’re looking to shift millions of dollars worth of product from China to India,” Rohit Hegde, Aequs’ head of consumer verticals, told Reuters. “We said: as long as we can get at least about $100 million of business in the next few years, we can definitely invest in it.”
Fast forward to today and Aequs makes dozens of types of toys for Hasbro and others including Spin Master in two 350,000-square-foot facilities in Belgaum, India.
But Hegde and other manufacturers acknowledge that India and other countries cannot match China for efficiency”
“Still, for toy manufacturers including Hasbro and Barbie doll maker Mattel, the risks of relying on China for most of their production were highlighted during the COVID-19 pandemic, when Chinese ports struggled to export goods and were periodically shut down, leaving shipments stranded.
Soaring labour costs in China had already been driving manufacturers across industries to diversify production geographically.”
“setting up to source from other countries can take 18 months if a company is buying product from a contract manufacturer, and up to three years if a firm is building a new factory from scratch, Rogers said.”
“Government favoritism in the form of subsidies, tariffs, and other interventions allocates resources (labor and capital) differently than the way resources are allocated by consumers spending their own money. Ordinarily, businesses—spending their investors’ money—compete for these consumer dollars. Industrial policy rests on the assumption that such market outcomes don’t adequately support higher causes such as national security. If that’s true, it’s all the justification industrial policy needs. Nothing needs to be said about jobs.”
“As Noah Smith reminded his readers in a recent blog post, “Most of the actual production work will be done by robots, because we are a rich country with very high labor costs and lots of abundant capital and technology. Automated manufacturing is what we specialize in, not labor-intensive manufacturing.””
“Be wary of those who push industrial policy as a means of job creation. It’s a short-sighted approach that distracts us from the more important question, which is whether hindering the market allocation of resources is truly justified for national security or other valid reasons.”
“The clean energy subsidies that undergird President Joe Biden’s climate agenda have just prompted one Norwegian manufacturer to choose Michigan, not Europe, as the site of a nearly $500 million factory that will produce the equipment needed to extract hydrogen from water. And other European-based companies are being tempted to follow suit, people involved in the continent’s hydrogen efforts say — making the universe’s most abundant substance the latest focus of the transatlantic trade battle on green energy.
The Norwegian firm, Nel, announced its decision in May, nine months after Congress approved Biden’s flagship climate law, the Inflation Reduction Act. The move takes 500 new jobs to the other side of the Atlantic, despite the European Union’s efforts to position itself as the obvious place for clean tech investment.”
The U.S. Defense Industrial Base Is Not Prepared for a Possible Conflict with China Seth G. Jones. CSIS. https://features.csis.org/preparing-the-US-industrial-base-to-deter-conflict-with-China/ Affordable Mass: The Need for a Cost-Effective PGM Mix for Great Power Conflict Mark A. Aunzinger. 2021 11. Mitchell Institute. https://mitchellaerospacepower.org/wp-content/uploads/2021/11/Affordable_Mass_Policy_Paper_31-FINAL.pdf Ukraine War
“subsidized firms must provide “high-quality childcare for plant workers.” They can even divert some of the subsidies to build child care centers and hire providers—activities that do little to increase the supply of microchips. Companies will also be required to do all sorts of financial disclosures and share part of any unanticipated profits with the government. Preference for funding will be given to companies that promise not to buy back stock. The New York Times cleverly named this approach the “Chips and Strings.”
These strings will significantly undermine chip manufacturing by increasing production costs. For instance, when the administration says high-quality child care, it really means more expensive child care because of requirements that caregivers be college-educated and such. Building those child care and chip factories will be subjected to Buy American and environmental requirements, Davis-Bacon pay requirements, and minority and women material sourcing requirements, along with pressure to be more open to the demands of labor unions.”
“On its face, the idea of increasing semiconductor manufacturing in the US seems like it would help address the global supply crunch for computer chips, which has made it harder to buy everything from cars and laptops to sex toys and medical devices during the pandemic. Senate Majority Leader Chuck Schumer (D-NY) has even suggested that the funding package could help fight inflation, presumably by making these goods cheaper.
But while it’s certainly fair to call the legislation a victory for bipartisanship, this plan is primarily focused on keeping up with China’s growing investment in its own domestic chip industry — not solving the present issues with the tech supply chain. The chip factories produced by this package won’t be complete for years, and the bulk of the funding won’t necessarily go toward basic chips, also known as legacy chips, which account for much of the ongoing shortage. And that shortage may be nearing its end anyway.”