Biden will redistribute labor across the US… at the expense of companies | Opinion

Population growth in the state of Kentucky has lagged behind the rest of the US for much of the past 75 years. Joe Biden’s push to internalize manufacturing will change its trajectory and that of other similar states. New investment will redistribute labor, at the expense of business.

Biden cemented his push to reverse the tide of globalization in August with two major bills. The Chip and Science Law contributes $53 billion to bring semiconductor manufacturing and development to the US. The Inflation Reduction Law allocates 30,000 million in tax credits to companies to produce solar panels and renewable energy components in the country.

Firms from around the world are opening operations in the US Some will set up shop in fast-growing new states: TSMC is building a $40 billion chip factory in Phoenix. But the rust belt states, once manufacturing powerhouses, can also win. In Kentucky, a battery factory for electric cars is being built. Micron is going to create 9,000 jobs in Syracuse (New York), investing in a megacomplex of 100,000 million. And high-tech manufacturing can find opportunities in abandoned infrastructure of the old. Rivian Automotive acquired a former Nissan plant in Normal, Illinois. Lordstown Motors took over one of GM in Ohio.

But it will hurt the profits of companies. Hourly wages in the US are 12 times those in India, according to NationMaster. A chip engineer in China earns one-third as much as a similarly qualified person in the US.

Biden’s measures, however, will be a boon for parts of the country that have been left behind by the rapid growth of coastal states. The Chips law authorizes 10,000 million in five years to create 20 regional poles that “are not leading technology centers.” Even if it is at the cost of benefits, it is undoubtedly a good thing.

The authors are columnists for Reuters Breakingviews. Opinions are yours. The translation, of Carlos Gomez Downit is the responsibility of Five days

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