Across 2021 and 2022, President Joe Biden signed into law three landmark industrial policy packages—the Infrastructure Investment and Jobs Act (IIJA), CHIPS and Science Act, and Inflation Reduction Act (IRA)—to undo decades of disinvestment in American communities; rebuild the nation’s physical, digital, and utility infrastructure; retake the global lead in advanced semiconductor manufacturing; speed the nation’s transition to electric vehicles (EVs) and green energy; and create high-quality jobs. These three policies combine direct public spending with grants, loans, tax incentives, and other financial assistance for private companies to promote key sectors, especially manufacturing, using public investment as a way to “crowd in” private investment.
New CAP analysis finds that 83.2 percent of counties receiving new private investments spurred by the Biden administration have manufacturing sectors that shrunk since 2001.
Now, new analysis from the Center for American Progress finds that private-company investments fostered by the IIJA, CHIPS and Science Act, and IRA are being announced in counties with less access to manufacturing jobs. Most counties receiving new private investments lost manufacturing jobs over the past two decades. In fact, 83.2 percent of counties receiving new private investments spurred by the Biden administration have manufacturing sectors that shrunk since 2001—a greater share than among all U.S. counties (73.0 percent).
Counties hit hard by declining manufacturing are receiving investments
Analysis of announced private investments reveals that the Biden administration’s policies are making a promising start to creating jobs that offer a route to the middle class in communities that need good manufacturing jobs the most. Already, these investments have led to a boom in construction across the country, with the construction of manufacturing facilities in the United States nearly doubling from 2021 to 2023. A recent report from the Brookings Institution found that investments in certain “strategic sectors” are likelier to be located in “economically distressed” communities with low employment and income levels. If the promised good jobs in manufacturing follow, they will be located primarily in communities that lacked investment in manufacturing jobs over the past two decades.
The industrial policy program signed into law by the Biden administration is meant to reverse these trends and revitalize American manufacturing while creating good jobs with the chance to join a union. Manufacturing jobs continue to pay wages and provide benefits above what comparable workers can earn in other sectors. Moreover, they are being improved through efforts to further unionize the sector. The administration’s programs, together, have supported more than half a trillion dollars in private investments—many for projects in manufacturing—and offer communities in need of good manufacturing jobs a way to rebuild their local manufacturing sectors.
Industrial policy investments from private companies are being announced in counties that have seen a decline in manufacturing over the past decade. As shown in Figure 1, 83.2 percent of counties receiving private investment had smaller manufacturing sectors relative to total local employment in 2021 than in 2001—a higher share than the 73.0 percent of counties nationwide that saw a decline in the proportion of jobs in manufacturing from 2001 to 2021. These data reveal that private investments are more likely to go to counties that have seen a decline in the availability of local manufacturing jobs in the past two decades.
While the 2021 Quarterly Workforce Indicators (QWI) currently omit Alaska, Arkansas, and Mississippi due to delays in sourcing and processing data, prior years that include all 50 states show these results are consistent across the United States as a whole. Figure 2 shows the proportions of counties with a 15-year decline in manufacturing from 2001 to 2016 across all 50 states. Over this period, 80.8 percent of counties receiving private investments announced in 2021 or later saw declines in local manufacturing as a share of total employment, compared with the decade before—higher than the 68.7 percent share for all counties nationwide.
Conclusion
When laying out the rationale for making large public investments to prompt further private investments in manufacturing, the White House cited work advocating for investments in communities with local economic decline. Analysis of announced private investments shows that the Biden administration is on track with its goal to bring manufacturing jobs to communities that have been starved of them for decades.
Decades of disinvestment have made it harder for Americans to support themselves and their families through good manufacturing jobs. But fortunately, the industrial policies of the Biden administration promise a nationwide boom in such jobs, with companies announcing billions of dollars in government-supported investments in communities with a shortage of manufacturing jobs. These policies bring together investments in America’s manufacturing capacity for clean energy, EVs, semiconductors, and more with jobs that pay good wages, offer the chance to join a union, and are accessible to workers even in places with limited access to manufacturing jobs in recent years—all important steps for building a better future for the American middle class.
The Biden administration’s investments are spurring growth in your community
Learn more about local projects happening across the country with the “Biden Administration Investment Tracker.”
Methodology
The authors relied on CAP’s “Biden Administration Investment Tracker” for data on private investment announcements. This resource tracks announced investments spurred by funding from the IIJA, CHIPS and Science Act, and IRA by location. Some announced projects have begun, while others are still in planning stages. The data analyzed include company announcements from January 2021 through August 2023. County-level manufacturing data were sourced from the QWI, published by the U.S. Census Bureau and averaged for each year. Three states—Alaska, Arkansas, and Mississippi—have delayed providing the necessary data to the Census Bureau for use in QWI for several years, and as a result, these states are omitted from the 2021 analysis, though Figure 2 shows that the 2021 results are consistent with similar results over a 15-year period when these states are included.
Data for counties that received private investments were compared to data for all counties nationwide. The results were similar when counties with private investments were compared only to counties that did not receive private investments, instead of all counties.