Interest in industrial policies as tools to address the climate crisis, reach national security goals, and boost domestic economic growth and innovation is surging, with more and more policymakers and researchers seriously considering the possible advantages of the U.S. government taking on a more active role in promoting and protecting key sectors.1 Further, industrial strategy also is now a large and important component of the current administration’s economic agenda, with recent legislation enacted by the U.S. Congress and signed into law by president Biden representing a shift toward the use of public investments to spur private investments, expand the country’s productive capacity, and boost innovation and growth.2

But in addition to jumpstarting the clean energy transition, updating essential infrastructure, and ensuring the United States can produce key goods and continue to develop new cutting-edge technologies, one of the great promises of a new industrial policy era lies in its potential to narrow economic disparities and support good jobs in the United States.3

The Inflation Reduction Act of 2022, for instance, is designed not only to lower carbon emissions and deploy historic investments in energy infrastructure, but also to create millions of stable and well-paying jobs over the next decade.4 Likewise, the CHIPS and Science Act of 2022 aims to boost the country’s semiconductor production capacity, build more resilient supply chains, and revitalize employment in the U.S. manufacturing sector.5 And the Infrastructure Investment and Jobs Act of 2021 is expected to both update the country’s essential infrastructure and lift job quality and quantity in industries such as manufacturing, transportation, and construction.6

For industrial policies to support job quality in the United States effectively and ensure public- and private sector investments results in stronger and more equitable economic growth, however, they need to operate in a context where there is institutional support for workers. Indeed, revitalizing the domestic manufacturing sector, investments in public infrastructure, measures aimed at boosting productivity, and other industrial policies can be important tools for creating good jobs if they are accompanied by strong collective bargaining laws and institutions, just as they were throughout much of the mid-20th century.7

Read the full article about industrial policies by Carmen Sanchez Cumming at Washington Center for Equitable Growth.