Source: Blog – Alliance for American Manufacturing
A rendering of the planned “Intel One” facility in Columbus, Ohio. Image courtesy Intel
Both officials explored the potential of new laws like the Inflation Reduction Act and CHIPS and Science Act.
Energy Secretary Jennifer Granholm and Ohio Gov. Mike DeWine (R) discussed industrial policy and American competitiveness during a special Washington Post Live event on Monday, highlighting the progress that has been made had so far and the hope they have for the future.
Granholm, a former governor of Michigan, told Post reporter David Lynch that new laws like the Inflation Reduction Act (IRA) and CHIPS and Science Act are a much needed change from the days when the United States bowed “to the altar of free trade” and allowed “other countries to step up with their own industrial policy, their industrial strategy, to lure investment offshore.”
“We saw it first-hand how our industrial base, the spine of our nation, of our economy was hollowed out because we sat on our hands,” Granholm said. “We sat there and allowed China, other countries to swoop in and take huge swaths of our industrial base. We chased, as a nation, we chased low-cost, low-wages and that created this global shift to low-wage countries and away from the United States.”
That lost production didn’t just mean lost jobs; it also weakened America’s ability to take care of itself. As the COVID-19 pandemic loomed across the world, for example, we discovered just how much the United States relied on foreign-produced goods, with masks, grains, and advanced technology like semiconductors just a few of the goods that were in scarce supply during a time when we needed them most.
But by refocusing on industrial policy, Granholm explained, the United States is “no longer just going to bring a knife to a gunfight.”
Passed in 2022, the IRA aims to grow U.S. manufacturing in emerging clean energy sectors like solar and electric vehicles by investing over $370 billion into clean energy production, increasing domestic manufacturing capabilities, and encouraging innovation in transportation and electric vehicles. Meanwhile, the CHIPS Act includes $39 billion in funding to support the construction of semiconductor factories in the United States.
President Biden’s push for clean energy investment is already encouraging companies to bring jobs back to America, Granholm said.
“Since [President Biden] has taken office and his push towards incentivizing investment in the United States has taken hold, for example, just in the battery space, batteries for electric vehicles, we’ve had a hundred, over a hundred and eleven announcements of battery companies coming and expanding in the United States, over $85 billion of investment for electrifying our transportation system,” she said.
Granholm noted she’s faced backlash ]while trying to address climate change. But increasing America’s competitiveness and creating well-paid jobs appeals to politicians across party lines, she said.
“They all want to keep their young people working there as well, and many young people really want to be part of something bigger than themselves, so fighting climate change is one way to do that,” Granholm said. “But also to get good-paying jobs, and so there’s several dimensions of this that red states can love.”
Ohio is one such state that has benefited from industrial policy — which was the focus of DeWine’s conversation with Lynch.
It started when Buckeye State officials put in a bid to be home to a new Intel semiconductor factory. After being chosen over 40 other potential locations, Intel agreed to invest more than $20 billion into a facility in Columbus, promising to create partnerships with local community colleges and universities.
But it didn’t come with uncertainty. There are different phases in the “Ohio One” project, the first of which was to get selected for the location site. DeWine recalled that Intel told him that the CHIPS Act would have to pass to continue the project. Not only did it pass, promising grants and guaranteed loans to American companies that increased America’s competitiveness against China’s growing chip production, but Intel also announced in January of this year that it could potentially invest $100 billion more into Ohio.
DeWine emphasized the significance of Intel choosing to build the factory in his state, pointing out that the company already has 167 local suppliers for the new facility, with more on the way.
“The impact on Ohio is just huge,” he said. “I think it will send a signal to other companies all over the country that Ohio is a place to look at. If Intel made this decision in Ohio, other companies, whatever they make, should look to Ohio.”
DeWine did express some concerns about workforce readiness, noting that right now there are more jobs than people available to work. The current unemployment rate as of this February is 3.6%, almost 3% lower than it was in February of last year.
Creating career pathways to manufacturing will be critical to the long-term success of these policies, and must include things like technical training, DeWine said. But he also emphasized the significance of investing in childhood education and its impact on the workforce, so that “every Ohioan lives up to their full God-given potential.”
“To deal with this in the long run, we have to start early,” he said. “So prenatal care, early childhood development. All of these things, we’re putting a lot more focus on so that when these children hit kindergarten, they’re ready for kindergarten, all the way through.”
One thing is clear: The jobs at the new Intel will be good jobs. The company has stated that the jobs they plan to staff the factory with employees at varying education levels; most jobs will only require a 2-year education, some even less than that, and most jobs will pay over $100,000 annually.
Adding additional incentives will also be important, DeWine noted.
“Getting people to work, if they need childcare, making sure they have childcare is something companies are moving towards on their own,” DeWine said. “Intel had a plan to do the childcare, whether that was in that bill or not. When you look at what is necessary to have your employees there so they can work the day and not have to take off because their child care went down, the child has a problem, I think, makes a lot of sense.”
DeWine noted he began his career as a Member of Congress under former President Ronald Reagan, when there was a “basic Republican philosophy of government backing off.” But in recent years, he has come to understand the importance of industrial policy like the CHIPS Act.
“I think it’s a different world today… facts have changed, in my opinion,” he said. “I think we have to be strategic about it. I think we have to be smart about it. We don’t want to, you know, have a command, a control economy where the federal government is picking–always picking winners and losers. But I think doing it strategically where it makes sense is smart, and if we don’t do it, I think we’re going to pay a huge price and, frankly, already have paid a price.”
Click here to watch the full Washington Post Live event.
Full Article: Read More
