The enormous investments in the American economy made by the Biden administration are having and will continue to have a huge impact on the lives of all Americans. But there’s an important argument to be made that we can and should work to make that impact even larger, especially for working families.
Writing in The American Prospect, Xavier DeSouza Briggs, a senior fellow at the Brookings Institution, and Madeline Janis, the co-executive director of Jobs to Move America, note that “America’s dominant economic paradigm that free markets and freewheeling capital alone have created the nation’s critical industries and enabled them to flourish.” That view, they say, “denied the important role that government plays in shaping the nation’s economy.”
The current moment presents an historic opportunity to reshape that paradigm and recreate what they call an “industrial policy for all.”
“(T)hanks to last summer’s twin legislative landmarks—the CHIPS and Science Act and Inflation Reduction Act (IRA), together with 2021’s bipartisan infrastructure law—elected officials and public agencies in the nation’s capital and across the country now have the tools to make the creation of good jobs, racial equity, and community benefits part of the deals as companies seek public funding from this legislation,” they write.
How? They point to two recent federal investments.
The U.S Department of Energy (DOE) set out to address the need to boost battery production and enlarge the U.S.’s electric vehicle supply chain by awarding $3 billion in grants to 20 manufacturers in 20 states. And the Commerce Department met the shortage of microchips by spending $39 billion in subsidies to expand semiconductor production.
But that kind of public investment can do more than provide new batteries and computer chips.
“The big question now is how these big bets, and others on the way to expand advanced manufacturing and boost research and development in America—taken together, what the Biden administration calls our country’s “new industrial strategy”—will create broadly shared economic gains, including good jobs, for workers and communities across the country.”
De Souza Briggs and Janis have found some of the choices the Biden-Harris administration have already made in this regard promising, including an innovative community benefits incentive the DOE incorporated into the competition for subsidies to bolster domestic battery manufacturing, recycling, and supply chains. Credits accrued for committing to create good construction, manufacturing, and operations jobs, work with community groups and unions to do so, and provide training and support for more inclusive hiring practices. And the CHIPS Incentives Program limits stock buybacks and requires that applicants for the funds provide childcare for their workers.
Leveraging the expenditures of public funds for broader public goals can happen at the local level, too, they point out. The Los Angeles County Metropolitan (L.A. Metro) recently adopted a “Manufacturing Careers Policy” that requires commitments covering the number, type, location, minimum wages, benefits, and investment in training for jobs that will be created for contracts awarded at a certain level. Additionally, the policy creates pathways for disadvantaged workers facing barriers to employment to ensure that public dollars lift up those who need it the most.
To make the incentives successful and meaningful, accountability and transparency must be baked into the policies.
“To fully realize the promised good jobs and benefits, however, the DOE—and other federal and state agencies implementing hundreds of billions in public investment—now must ensure that the companies are held to their promises through enforceable contractual requirements. And these requirements—and evidence of compliance with them—must be made publicly available, so workers and the public at large can see clearly what these employers have promised to do.”
The idea that we can use the government’s purchasing power to create good jobs, work toward racial equity, and provide broad community benefits is not new. What is new is the opportunity this historic moment of incredible investment presents to us to make it happen.
Shahrzad Habibi
Research and Policy Director