Prolonged decline may be a plateau, but there are limited signs of factory renaissance
In interviews, Ryan embraced the Biden administration’s use of generous government subsidies to encourage the creation of new manufacturing jobs, while Vance praised former President Donald Trump’s import tariffs and said faster development of the state’s energy resources could spark a boom. cause.
“Our goal should be: how do we position ourselves to face as many growing industries as possible? Electric vehicles, cars, trucks, batteries… hydrogen, natural gas, nuclear solar energy, aerospace. How do you lay the foundation on which we have an industrial policy for all these things?” said Ryan. “There is an opportunity for us to dominate these industries of the future.”
However, what goes on on the ground is different from what the candidates emphasize on the stump. Yes, manufacturing jobs are growing in Ohio. But it’s not the jobs that disappeared decades ago.
The manufacturing industry has changed so much in recent years that the new factories mined by new factories are likely to pale, but likely to pale in addition to the 5 million US jobs lost since the late 1990s, economists said. Many of the new positions require special skills or training that most workers do not have. Much of the work will be done by machines.
“When we talk about reducing production today, it’s very different from reducing production 10, 20, or 50 years ago,” said Amanda Weinstein, a professor of economics at the University of Akron. “It’s not going to create that many jobs.”
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The sparsely populated factory floor of Toledo Solar illustrates the challenge.
The three-year-old manufacturer of solar panels for homes and businesses is exactly the kind of green energy, high-tech company favored by the Biden administration. Aaron Bates, the chief executive, announced a major expansion last month, boosted by tax breaks in the climate and health bill the president signed in August.
But like many advanced manufacturers, Toledo Solar’s growth will create a limited number of new jobs, at least in the short term. On a recent visit, only a handful of workers stood next to the automated production line.
“This isn’t the kind of factory where you throw corpses at things,” Bates said. “It’s all robotics.”
The White House says production is booming, thanks to federal investment and the industry’s rethinking of supply chain risks amid the pandemic and war in Ukraine.
Biden has passed three laws designed to promote domestic manufacturing: the Inflation Reduction Act, the Bipartisan Infrastructure Act, and the CHIPS and Science Act, which subsidizes semiconductor manufacturing.
Several leading employers have already responded, including Intel, which pioneered a $20 billion semiconductor complex outside of Columbus last month.
In the past year, U.S. factories added 467,000 jobs, which the White House says is the industry’s best recovery since the 1950s.
Still, it will be difficult to hold on to those gains – let alone build on them.
Production has enjoyed significant benefits over the past two years. Unlike face-to-face businesses such as restaurants, most factories could operate safely during the pandemic. And orders rose as consumers used their incentive checks to buy computers, furniture and appliances.
That tailwind is fading. In September, the Institute for Supply Management’s production meter fell to its lowest point since May 2020 with new orders and labor contracts. Many companies are cutting their workforces through employee freezes and attrition, ISM said.
As the Federal Reserve and other central banks raise interest rates to fight inflation, Wall Street analysts predict a global slowdown that will weaken demand for factories. Higher tariffs have also boosted the dollar’s value by more than 10 percent since March, making U.S. goods more expensive for foreign buyers.
Talking about a production boom is “more hype than reality,” wrote Michael Feroli, an economist for JPMorgan Chase, in a recent customer note.
Both candidates for the US Senate in Ohio grew up in steel cities that had seen better days. During the campaign, both Ryan, a native of Niles, and Vance, who grew up in Middletown, draw on their personal experiences when talking about the importance of production.
The kind of voters who work in Ohio’s factories can determine the race. White voters without a college degree made up more than half of the electorate here in 2020, and they supported Trump by a 2-to-1 margin, according to CNN exit polls.
One in three manufacturing jobs in Ohio have disappeared since 2000 will acknowledge that it is unlikely that all of them can be replaced. “There’s no question,” he said, standing in front of a local steelworkers’ union hall.
Ryan, who has long earned a place in the Democratic Party’s anti-trade wing, is appealing to workers by supporting a mix of tariffs and industrial policies. Ryan wore a gray T-shirt that read “Beer in Ohio just tastes better,” Ryan said the government should move beyond subsidizing new factories and try to send jobs to cities that have suffered from the relocation of companies abroad.
“We want it to happen in the forgotten communities that have been left behind because they dominated the older industrial areas,” Ryan said.
Vance, who laid out the social costs of deindustrialization in his bestselling memoir, has attacked Ryan as a career politician who failed to prevent the job losses he is now complaining about.
The Republican praised Trump for exploding the bipartisan consensus in favor of free trade, which he said wrongly allowed manufacturing jobs abroad on the assumption that high-paying research and development jobs would remain in the United States.
“What’s really going on here is that the loss of production has made our economy less innovative,” he said in a telephone interview.
Vance wants Ohio to double its use of fracking to ensure manufacturers have access to cheap energy. And he wants policymakers to recognize that reversing the mistakes of the past takes persistence.
“If you’re really going to rebuild American manufacturing, it’s going to be a multi-administration, multi-decade project,” he said.
As a share of total US employment, factory jobs have been declining since the 1950s. Despite the increased workforce over the past year, today’s 12.9 million manufacturing jobs represent a slightly smaller portion of total nonfarm employment than when Biden was inaugurated, according to the Bureau of Labor Statistics.
Biden promises the new semiconductor factories will create high-paying workers’ jobs. Micron last week announced a $20 billion investment in Upstate New York to create the nation’s largest semiconductor manufacturing facility and 9,000 jobs.
But some experts warn that most new positions require skills that are scarce in places like Ohio.
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According to Ned Hill, a professor of economic development at Ohio State University, many of the people hired will have a four-year degree in science or engineering or a college degree, along with certifications in robotics.
“They won’t be workers,” Hill said via email.
Some new projects will also take years to pay off. For example, Micron does not plan to begin “substantial hires” in the second half of 2025, the company said in an emailed statement.
Forecasts of significant job growth are also viewed with skepticism on some factory floors.
Perry Osburn, owner of IMCO Carbide Tool, attended a trade show in Chicago last month, where the largest convention center in North America was packed with automated warehouse equipment, laser measurement equipment and 3D manufacturing systems.
“Everywhere you look, it’s automation,” he said.
Osburn is expanding its tool shop, adding 92 jobs to its current 116 employees. He also plans to double the number of machines and replace some base models with fully robotic units.
“Personally, I think production will grow slowly. But it’s a very different kind of production. It’s not that human-intensive,” he said. “If you say you’re going to get millions of jobs back, it’s not the same jobs you had 10 or 20 years ago.”
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Likewise, machines at Toledo Solar perform the most important tasks. Designed to operate 24 hours a day, they move large sheets of glass along conveyor belts, where a substance called cadmium telluride is pressed onto the panels, forming a semiconductor that converts sunlight into energy.
Last month, Toledo Solar said it would expand in response to Biden’s signing this summer of the Inflation Reduction Act, which contained $430 million in renewable energy tax breaks.
The tax incentives will encourage consumers to buy US-made solar panels. But equally important, Bates said, is that the bill signaled to Wall Street that solar companies will be a viable investment.
Without the tax breaks, Bates could only have afforded a smaller expansion funded by the company’s profits. Federal support means capital markets will now be more willing to invest, he said.
“That’s huge,” he said.
His 45-strong workforce — average salary around $100,000 — is expected to reach about 115 by the end of next year, he added. Many employees are physicists, engineers or advanced.
With less than four weeks to go before Election Day, Ryan and Vance crisscross Ohio in search of votes.
In a televised debate on Oct. 10, the candidates exchanged pictures about inflation, abortion and political extremism in exchanges that occasionally resulted in insult and sarcasm.
But after an hour of rhetorical battle, when Ryan was given the opportunity to make closing remarks, he listed solar panels in Toledo, electric vehicles in Lordstown, batteries in the Mahoning Valley, and computer chips outside of Columbus before concluding with the only comment that Vance might be right. applauded: “We have a chance to be the manufacturing powerhouse of the world.”