Name: Labor Markets Watch: Trade Wars, Industrial Agendas, and Workforce Readiness
Start: 2025-05-21T13:00:00.000-07:00
End: 2025-05-21T14:00:00.000-07:00

Good afternoon, everyone and welcome to today's Labor Markets Watch. Today is Wednesday, May 21st, 2025. My name is Jeanie Shu and I am the strategic project Lead of the Economic Strategy and Finance Center at the Conference Board and I will be your moderator today. So and let's just get right in and get started. Today's Labor Markets Watch is on trade wars, industrial agendas, and workforce readiness. Are we ready? And so today's conversation, we'll examine the feasibility of the administration's industrial agenda and labor market implications of the potential policy changes impacting green energy infrastructure and advanced manufacturing. So today's questions boil down to are we ready? So today we'll gain insights on the following trade policy uncertainty and the impact of the US economy and labor markets ambition versus reality. Is there alignment between US industrial policy goals and current workforce capacity shifting trade dynamics and how they they could redirect investment flows that reshape regional labor markets, Sectoral risks and opportunities in the green energy infrastructure and manufacturing and finally, AI labor shortages and skill gaps. How these challenges impact workforce competitors and SUS of industrial policy initiatives. Today with me are Mitchell Barnes, the labor markets economist could see you, as you know, as usual, great to be here. And Alex Heil, the senior economist of oh Lord, is it. It's energy, infrastructure and environment you. Got that. Thank you so much. Just I think my first time in labor markets watch, so I'm very excited. Good to see you all, but before we get any further dive into the agenda, just some housekeeping roots for all of you. If you need, if you need a certificate for for attendance sake, you'll be able to download that at the end of the webcast. You may use this to certificate to self apply, continue education credits or directly with your certification provider. Also other housekeeping roles. The QA box is open. Feel free to use it. Feel free to ask us questions. We'll get to them on on our way through. We may not be able to get to all of them. I apologize, but it's just, you know, so like there's a lot going on and then we want to make sure we cover all the material, but we'll get to as many as we can. So thank you for all that. Finally, I'm just going to just jump right in just to let you know what the agenda for today is and then I'll just turn it over to Mitchell. So topics of today is we're going to cover US and global manufacturing trends, reassuring industrial strength and requirements, constraints and outlook. Mitchell, I figured you might want to expand. Yeah. You know, I think that, you know, many of our listeners, all of us really have read quite a bit over the last several years about the need and really the willingness on, you know, account of both parties in Washington to really look, I think more intensively at reshoring some of this production. We're going to go through really at least these trends where do we sit today versus some of our international competition. I think I want to highlight right off the bat, you know, there's a productivity element to all of this, not just a jobs and employment story. And we will really dive deep, not only in kind of the rollouts of some of the federal investments across infrastructure, green energy and whatnot, but we're going to look at kind of what some of the implications of the new administration and some of the new strategy means for some of those investments. And finally, I think we'll take a little bit of a step back and say, what are really the requirements for a successful industrial policy? You know, what are these aspirations that that we're aiming to achieve? Are they feasible, as you said? And what are some of the constraints that we face that that might need to be addressed for us to do this successfully? So let's just dive on in and I want to highlight first a couple US really specific trends and and really how they relate globally. And I think this is really an important, you know, piece to to really set ourselves for the conversation on the left. You have employment really over a long horizon back to to just before World War 2. And you see I think really the common story that is often out there that you know, right around 19791980 we saw peak employment in manufacturing in the US just about 20 million workers. That has fallen to just under 13 million today. But I think the flip side of that story again is productivity. Can less and less workers still produce the same output? And the answer is on the right. So that is really an index of aggregate manufacturing production. It's indexed and tagged to 2017. And you can see, you know, maybe we've hit a little bit of a plateau here in the last decade or so, but that definitely breaks from the trend that I think, you know, we really, you know, circle around when we think of the loss of manufacturing, the loss of manufacturing jobs. And can I just add one thing material just If one looks at the graph on the left, I think it's important to just, you know, identify there's two points in time that are important once not NAFTA and that was negotiated and then implemented in the US, Mexico and Canada and then China's entering the World Trade Organization. And that's really if you look at NAFTA that that's sort of the plateau part. They are right before you hit the turn of the Millennium. But then, China's entry into WTO had a much more significant impact, one can argue, when when employment in manufacturing really start to slide. Yes. And you know, I think as we get in here, I think it's a kind of sector by sector story within manufacturing even of really what that competition looks like from China and some of these other global players. But certainly in a broad sense, I think you see kind of those periods, you know, pretty clearly in this figure. And I just want to, you know, stick, you know, on one point to this is the missing piece of between those two prior figures. This is just the output for all those hours of manufacturing workers, you know, over this given time. And you can see again, you know, in in this same way, a little bit of a plateau which we can discuss. But I think this really does tell you that there was at least, you know, a continuation of that productivity allowed, you know, a greater and greater shifts across the US economy as that was occurring. But I had mentioned, you know, what are kind of the subsets of this. And I think this is just a really important graph. You know, you still see in the dark blue here kind of that overall production line, but I've split this out into what you would think of as your kind of traditional non energy and kind of new, you know, technologies and then energy in yellow. And the new technologies, computers, computer equipment, semiconductors as well have really carried a lot of weight. You see a lot of that productivity enhancements, you know, coming in in some of these as well as just a continuation as well highlights here employment. So I think if you really to say that the product, product overall production of the US manufacturing sector has remained, you know, relatively, you know, on trend. But I think really underneath the hood, you see, you know, really increasing shifts of what is picking up steam and what is, you know, really falling out of kind of the US advantage of production and seen in, you know, kind of different reflection. This is going back to 1990. So 1990 to 2005 is the lightest bar 2005 to 15 get you through the Great Recession. And then I'm sorry, the label is actually incorrect. I think the data is right 2015 to 2024. And what this really tells you is, is kind of that similar story textiles and apparel manufacturing really we see consistent job losses across these last several decades. Primary metals you think, you know, really your, your steel and, and you know, heavy foundry work certainly that has been really removed. And I think that has been, you know, at least one of the talking points of some of the steel and aluminum tariffs that are are currently, you know, out there. But you really do see at least the chemicals, petroleum, some of the kind of more specialized durables, you know, food continues to grow. But really the manufacturing of equipment, the machinery and the computer's electronics, I know we're going to talk about going forward. But those, you know, I think even though we haven't seen, you know, too much of A top line headcount growth in those, you do see at least even the smaller sectors underneath these, you know, think semiconductors, think of some of those kind of recent investments. So can I just this is really striking data that you're showing here. I think it's really interesting to consider some of the data as it describes computers and electronics. Is it sort of Fair to say that, you know, the these massive declines in these first decades are those attributable to just consumer products? And then the increase over let's say the last 10 years, that's the high end, high tech, more niche devices sort of a thing. I mean, it's, it just seems like the decline otherwise is so striking that is sort of surprising that that sector of the economy actually has seen an increase in in employment in the manufacturing space. Yeah. And I think this really is, you know, indicative of some of these shifts. You know, again, these are all aggregated to kind of, you know, more visible levels. But if you go underneath the hood, you have some of these that are going up and going down. And I think one really key example that you think of, you know, NVIDIA for instance, NVIDIA is AUS company, they do all of their design here. They do not do their manufacturing here. So when you really look at kind of the underneath of some of the computers and electronics, you actually see, I think some of the, you know, production that we would think of actually kind of sliding and some of those more maybe niche manufacturing, you know, activities that have stayed on shore. But I know we're going to turn this to more of a kind of an industrial policy focus. What is our critical sectors that we're looking at? You know, certainly we have heard, you know, much about national security, economic security. I think really the reliability of supply chains coming off of the back of the COVID pandemic, you know, can we really ensure that the United States businesses broadly have access to really the critical inputs they need? And we're going to really dig into some of the sector by sector specifics. But I do want to show you again, kind of drilling down just one more layer, you see that at least some semiconductors have ticked up, you know, have have at least fallen off a little bit from kind of those that 2022-2023 high. But you do see electromedical devices, electronic instruments, Transformers, batteries that are really, you know, core pieces of kind of the energy agenda. And then shipbuilding an aerospace, I would highlight as well we'll touch on infrastructure is kind of both, both an accelerants and a possible constraint for the US here. You know, you see at least kind of more and more reporting on the US can't even manufacture ships. You know, what would it take for us to do that? I think, you know, these are really the core pieces when I think of taking a step back of the US industrial brace more broadly. Right. It's really interesting some of these data on let's say the Transformers and we've written about, you know, the shortage of Transformers and how much of an obstacle that is for decarbonization and further electrification of certain parts of the of the economy. But you know, if you consider the scale, and that's important I think to keep in mind because for some of these graphs, scale is a little different. So you know, movements that appear similar, similar not necessarily say magnitude, but the transformer increase is that's certainly very much in line with what we've seen in the build up on that side of the sort of manufacturing sector when it comes to electric appliances in that in that on that utility scale level. That's very interesting. And it's not surprising to see some of the batteries manufacturing pick up in terms of employment just because of the just the nature of decarbonization and electrification, not just for transportation, but certainly for other parts of the economy as well. So I think that's that tells a rather intuitive story. That's true. And I think we want to go to a poll question, Jeannie, if all. Righty, Are you ready folks? We're ready for the poll. All right, our first poll for today. So our only poll for today actually. So what do you think is the largest hurdle to to the largest hurdle to reassuring US manufacturing for most business. So we would like to hear what from you like what do you think is actually our biggest hurdle? We have thoughts too, but we thought we would see what you guys all think too. So is it a available building infrastructure in the US, Materials, resource input availability, labor costs too high in the US, labor skills and labor and skills availability in US demanding for demand for products and overseas. So please submit your answers if you can pick one. Again, what do you think is the largest hurdles to reassuring US manufacturing for most businesses here? So, and just to make sure everyone knows, reshoring is bringing things back to the US because we're going to have to go through reshoring on shoring front, shoring near shoring because there's quite a number of kinds, but this is bringing it back to the United States. So again, A, available building infrastructure in the United States, B, material resources input available in the United States. C labor costs are too high in the USD labor and skills availability in the US, and E demand for products is overseas. So, Mitchell, what do we think? ABCDOE before we go to the answer. Well, we specifically didn't let them choose multiple. So I think that was on purpose. I think there's a little bit of everything as a labor economist, you know, I think at least my mind goes to some of those labor inputs. All right. Can I close? Yeah, I think the it's probably labor, but probably from with a broader lens, right? They're watching the right webcast. So it's labor cost is, is our lead here, right, followed by labor and skills. It's I mean, it's labor that's that's everyone's yeah. You know, I don't think that's that surprising for all of us or is surprising at all. But I would, I would bet to say that in my you'll probably go through is probably about, about infrastructure and about, you know, and you know, resources here in the US as well. Yeah. I think we didn't necessarily provide that answer, but I do think that, you know, we can get to that in a second what we're talking about. Reassuring manufacturing facilities and other types of facilities, the cost, the upfront cost, not just labor cost in terms of operations, but the upfront cost can just be so significant that it might not be a feasible option for a lot of businesses. I think that's probably true. And you know, I think this ultimately is reflective of kind of the outsourcing and and kind of diversification of supply chains that we saw over the last several decades. When you really look and go back to the sectors where the US is still, you know, maybe outperforming in some of these, you know, more higher tech goods in the manufacturing sector, I think it really is tied obviously to the cost of Labor, right? I mean you are only able to keep a lot of that production for kind of more of those high value goods and finished products. So I think that is all part of kind of that shift. But I would say, you know, I think it's worth mentioning that the US and China, the gap between kind of the, the per units cost of Labor has closed to about, you know, 2 times that used to be, you know, quite a much larger margin. For instance, Vietnam is, is right around 5 1/2 times the the late or I'm sorry, US is 5 1/2 times the labor cost of Vietnam. So I think you see these trajectories kind of flow country to country, but I think all of those countries, China included, is following their own trajectory of a shift towards services very slowly. Right. And I think that's, you know, we saw this coming. We, we have these conversations here in the office all the time, right? We're talking about, you know, what about supply chains and that whole China, Vietnam, that the relocation of of facilities. And that's been something that's well researched, well documented. And a certainly, especially post pandemic, a lot of those facilities have been move because of the, the, the appearance of risk, how much risk is embedded within supply chains. And so they're so similar to investment portfolios. Diversification matters. So if you can go to Vietnam, as long as you know you can go. So go to other countries and not just have all your eggs in one basket, so to speak, that probably is in in your business sense. All righty so. All right, I think I'm. You're next. I'm going to talk a little bit about you know what we have done in terms of research on some of these these trends when it comes to reshoring. So you know from that perspective and my colleague Erin McLaughlin and nearly done most of the work in terms of the develop this body from within our research unit here. But let me tell you a little bit about the intentions of business leaders that we have that we've identified. So the graph shows you the mentions of reassuring, reshoring and onshoring all you know those sort of cousins of the same concept, if you will, in terms of how much activity manufacturing production facilities are going to be brought back or what's the intention to bring those back. If you if you scrape earnings calls and cough conferences and you do this since the first quarter of 2020, you get to the data that is shown in the graph and it's, it is quite noticeable how much that has picked up in recent quarters. You know, this is basically now 10 times what it used to be. So on shoring, bringing facilities back is a real issue. It coincides very well with, you know, changes in the legislative structure here in this country with the passing of the Inflation Reduction Act 2022, which created all kinds of incentives for manufacturing, especially when it comes to the energy space and green energy space in particular. So it is not surprising. Now it's not necessarily the case that oh, intentions don't always lead to actual right troubles in the ground, but this is certainly something that we have noticed as in, yeah, this is, this is real and it's certainly businesses of various different sizes have have started to act on this at least. So if we're going from intention to actually putting some money behind this, right, you can look at Census Bureau data. This is basically reflecting some of the data, the value put in place for a new manufacturing construction. And you know if you go back 20 years, it's it was relatively constant. It rose a little over time with increases in the size of the economy wasn't that big of a deal. But all of a sudden it really created 2022 is really an inflection point. So all of a sudden within a period of a couple years, we went from 125 billion to 333 billion manufacturing. That's the graph shows only manufacturing equipment, manufacturing construction put in place over that time period. And that's this most recent data. We just updated this the other day to bring it all the way up to 2024. And you can really see that there is activity on the ground in terms of building manufacturing facility in the United States. So it's not just intention, it is not just conference call statements, but it's actually following through with actual investments. And if you and just to provide a little bit more, more more color on this, if you look at what this means father non residential construction, it also includes power highway and St. construction and educational commerce. And those are all 2nd to 2nd, 3rd, 4th and 5th to manufacturing activity. But certainly we have seen a real uptick in that kind of activity. So and there's been a lot of sort of the political debate has been around the Inflation Reduction Act and who actually benefits from it. So there've been lots of states that have advanced their own agendas and their own protocols in terms of how much they support locally a transition to renewables, a transition to green energy in a sort of broader sense. And that includes everything from investment in battery production facilities, electric vehicles, solar, wind type technology. So if you break it out, and that's what we try to do with this, this map that we're showing here, which States and which parts of the country actually are benefiting from some of the various types of investments as they are identified and supported and subsidized as part of the Inflation Reduction Act. The hundreds and hundreds, billions of dollars have come out of that legislative plan. A lot of this activity happens to be located in Rust Belt and red states. If you, we don't have necessarily the political map overlaid here, but you can just, you know, if you, if you try to identify, well, it's not in California, Oregon, Washington, the West Coast, and it's also not in the Northeast, but there's a lot around the Great Lakes and then certainly in the in the Southeast of the United States. And a lot of this is related to the automotive sector. So automotive has been one big driver. Batteries is 1 critical part of investment in decarbonization of transportation in that case, and not only, you know, when it comes to vehicles, but batteries increasingly are being used for supporting the grid, supporting requirements if storage requirements up to usually up to 4 hours, supporting other types of renewable energy such as solar and wind. We've written sort of extensively about how solar as a as an isolated solution is probably not going to be sufficient just because of the way that there's intermittency, as the experts call it, right? So this sun doesn't always shine, the wind doesn't always blows. As a result of that, you need to fill in the gaps. One way to fill in the gaps is through the the, the building construction and usage of batteries. And that's all reflected in in in this graph, in this map here. In terms of where some of these investments have taken place, we will have to see how you know with the the budget bill that is currently under consideration, how other legislative priorities of the new administration are being going to manifest themselves in terms of the support that this means for some of these sub sectors of this renewable energy economy essentially. But as of right now the way that the IRA was designed, there is clearly a way that it maps onto the 50 United States that along the the lines of not necessarily the typical state that would you that you would associate with renewable energy. And Alex, how did they come to this kind of state distribution? Was there a competitive process? Was this pre selected based on workforce or other factors? Well, some of this is, is simply where some of the factories already were located. So some of this is if you look at the automotive sector, certainly that's that the batteries, you know this, this is agglomeration economies in many cases. And then batteries would follow where some of the production facilities are already located, not just for internal combustion engine vehicles, but certainly battery electric vehicles. You want to minimize the logistics costs and the the cost of bringing pots and you know, learned a lot about auto parts since we all not talk about tariffs these days, that's all we talk about. But you want to minimize all this cost that is embedded in your supply chain. And as a result of that, you put them together in that, in that shape form. And you, you want to make sure that they are around transportation hubs, that they are out places where they ultimately going to be used in part. But some of this is just mapping on legacy industries as well. So if we're in, this is data essentially that tells, you know, the story without necessarily identifying the geographic location of where some of these investments take place. But this is manufacturing investments. These data, you know, by technology, the color scheme is anything from batteries to critical minerals, electrolyzers, all to 0 emission vehicles that's largely battery electric vehicles, solar and wind also makes then. And you can see how in particular, and I was already visible on the map on the prior slide, how batteries have really determine the path of that kind of investment, certainly in absolute terms, which you can see here. And then also in geographic terms, if you look at this from the point of view of, you know, in manufacturing investments by technology, there's tremendous demand for these kind of products, batteries for electric vehicles, for plug in hybrids, for supporting the grid, for even batteries that support individual houses in terms of their exposure to to just having a constant electricity supply available to them. And a lot of this has been part of, you know, again, support as part of the Inflation Reduction Act. I think it's important to keep in mind though, that in the US, while batteries are taking up the larger share, it's still a relatively small sector of the economy if you compare what is happening to battery investments globally, because then it's really, we'll get to that a little bit later on. It turns into a China story where the share of new battery electric vehicles is more than half of new vehicle sales. And in the US, it's just sort of scraping at the 10% mark essentially. So there's a lot more room to grow essentially. And again, the critical question here is going to be, we've seen this uptick in activity especially since the passing of the IRA in 2022. That's really when the graph almost went vertical. It's maybe a little too generous, but roughly speaking. But if we're now considering what what may happen on the other side of this going into 25, second-half of the year 26 and 27, it might slow the progress clearly as a result of some of the changes in the underlying policy support that we're finding. And, and can I ask also, you know, if are we looking at here in, in some of these graphs that you showed private sector money, you know, public money, maybe a combination of both. Because I think the structure of how they've gone about kind of the several laws that that we're really seeing, you know, push up this investment. What was the structure of that? And you know, is that, you know, maybe something that can be helpful to think about going forward of how we can design really these policies. Yeah. Usually it's a combination, right. So usually as part, especially the IRA, you find production and investment tax credit and they are paired then with whatever private investment volume is, is leveraged on top of that. It's hard, it's impossible to see that from this graph. But I think I would venture a guess that certainly over the last few quarters you've seen a fair bit of private investment capital that has been been leveraged by some of the initial seed money that was provided as part of the IRA. I think that's that's very true. And that's the big question going forward, what if the underlying public support dries up, what is going to happen overall? It was just reporting, I think it was Ford and it's EV, it's battery plant. They were planning a building too. They now have to basically taking this back because we've gone stitch so scaled back to one plan, now try to find someone else's can taken over the other plan just because of the lack of demand. So you'll see this probably more and more in terms of how this will be affecting the economy overall. So along the same lines of of the data that we just looked at, you know, if we're looking at the capital investment that's sort of the bridge from the prior slide to this slide. A lot of this is going on in the EV space. There's a fair bit of of investment capital investment that is in solar and wind certainly and battery storage that's sometimes you know, it's part of the EV space as well. So I think that electric vehicles going forward, I mean historically over the last handful of years or so, they've been driving a lot of that investment on the green energy side. I think going forward, you know, the demand might slip a little. We've also written about that. They've been studies out there that basically have suggested that if you eliminated the seven and a half $1000 tax credit for battery electric vehicles, the demand might decline by about 1/4, by about 25%. So that means that a million vehicles sold per year in the United States are going to all of a sudden fall to 750,000. That still means that electric vehicles will increase and ultimately will probably increase their share of the total and will start to grow again. But I think that immediately you'll probably find that there's going to be a slowdown in some of these investments as well. And, and really more of what ultimately the podcast, you know, the parts the webcast here is all about, which is the employment aspect. That's the map on the right. You can, you can look at the employment impacts as a result of clean energy investments essentially. And you can see that some of the States, and this also has been well covered, like, you know, Texas has been historically a state that actually has seen a lot of investment in clean energy, a lot of winds, the leading wind energy state in the country. It's one of I think right after California's, it might have actually overtaken California already when it comes to solar. So there's a lot going on and there's a lot of not just the industries requiring employment when it comes to installation, certainly because there's not that many solar panels, for instance, that are manufactured inside the United States, but installation certainly. But then also the, the miscellaneous type of employment effects, right? The, the, the maintenance, the additional type of industries that follow as a result of this. And you see that that is also then focused around some of these, the centers of gravity, if you will, when it comes to when it comes to clean energy. Those states are. So that's the dark, dark green ones are Texas, Kansas, Michigan, New York and Georgia, right? Yeah, the, I mean the, I think it's hard to say yes, that's true. My geography serves me. I'm going to blame my second passport if that's wrong. But I think it's it's always right. The way that the graph is, the map is shown is it's not normalized, right. It's just jobs per state in absolute terms, which is, which is always a little misleading in terms of what this actually means. So it's hard to necessarily sort of Mitchell presented very well before some of the impacts really from a, from a, from a more relative sense, right, on a per dollar basis or something like that. This is more in the aggregate, but it gives a sense of, yeah, there's certain states certainly that I've received much more of an impact when it comes to employment. That is certainly true. Just to sort of round this out, and I tried to allude this already, to allude to this already a little bit. If we're looking at this, where are we in this energy transition when it comes to greater manufacturing in the green space, where in decarbonization and so forth, we as a global society have turned a little bit of the corner because we now have, or we did have in 2020, four $2 trillion worth of investments globally in green energy broadly defined. That includes everything from electrified transport to solar, wind, grid investments, batteries, building, decarbonization and so forth. And that's significantly higher fossil fuel investments is a little more than a trillion dollars I believe globally. So we we have really increased the share of green energy investments. It's not sufficient yet to make a meaningful difference on emissions and certainly not temperatures and we're all aware of that. But the driving factors to all of this has been falling cost. And that's just, you know, depicted on the right hand side. You can look at the, the, what industry analysts called the levelized cost of energy, which means what's the total cost all in from investment to maintenance to decommissioning per unit of energy produced over the lifetime of an asset. How has that changed over time? Well, it's fallen literally by 90% when you're talking about solar. I mean, the numbers are so astonishing that solar and wind and other cheapest forms of electricity generation globally in most parts of the country. And you know, to bring this back to some of the investments, it used to be the case that on a per Watt basis you basically had to spend 50 sixty $70.00 to install solar and now we're down to less than $0.10. So the the order of magnitude decline in cost is tremendous. So you know in terms of manufacturing, bring us back to our conversation about manufacturing, it is unlikely that we're going to see significant solar manufacturing in the US in the future just because the profit margins are so, so slim essentially. But globally, if we're just looking at this from a resource allocation point of view, the costs have literally plummeted and that's good news. But it also means that we're probably seeing concentration of some of these manufacturing effects in countries that can act on this, right? They can execute on low cost production of some of these facilities and that by very large token is China for instance. Yeah. And and I think this, Alex, makes me, you know, really as an economist, think about, you know, cost curves. When 2 curves, you know, start to intersect, you know, through time that starts to change, I think decision points for people. And one of the questions that really comes to mind when I look at this and hear you speak to it is, you know, what is the current, you know, full employment across oil, gas and all of its derivative products today. You know what happens, you know, as kind of we shift and and we kind of again kind of spread out where we're getting some of our energy production and what is kind of the, the speed of that shift look like for that workforce for instance. Yeah, that's really interesting. We recently did some work on geothermal energy generation, electricity generation from below the ground type resources just taking advantage of the heat of the of the earth. And it's very interesting because you can stipulate there that, you know, in large part the main, the employment needed, the skills needed is for drilling and drilling that's a transferable skill right from the oil and gas sector into geothermal, for instance. Now obviously we're talking completely different scales because geothermal is really an infant industry, if you will. But we're certainly can, one can imagine that if there's a breakthrough in technology, if you can really think about this in terms of shifting labor resources from 1 sector, the traditional fossil fuel producing one into a renewable sector 1. That's one of these intersection points that's that's very interesting. And, and really the other that comes to mind and I think you, you brought up kind of the, you know, the position to do so and the position to act on this. And you know, I think, you know, often about kind of the first mover advantage. I think China has really, you know, put its foot forward across a range of advanced industries. You know, I think some would would argue that, you know, there's some subsidies included in that and makes tough for other countries to compete. But, you know, how should the US respond in kind of a a continuous and ongoing way to build this capacity if we can't kind of turn on a dime maybe as quickly as as we might see others doing? Well, I think the US has a has a tremendous size and scale advantage. I think there's increasing demand for a lot of these, a lot of these technologies. There's a great potential for the US to become much more independent when it comes to these renewable resources. There's, you know, this whole conversation about critical minerals and rare earth elements, you know, of which the US has tremendous resources, but practically does no mining and essentially no processing. So I think you can think about this. Well, they all come with constraints and they come with downsides because it's it's it's harmful to the environment. It's not exactly a clean, clean industrial sector. We are with elements, for instance, but you certainly have a lot of potential. I do think that the US has a lot of advantage when it comes to, and we talked about this earlier, applying some of the high skill, high tech intellectual property essentially, and applying it to those new sectors. There's the statistic that I like to cite is if we're thinking about rare earth element elements and critical minerals going forward in order to support the decarbonization of the economy, then recycling will play a huge role. And you know, just, it's not exactly a fair comparison, but it's interest is still illustrative. I think you take out a ton of soil. Then you extract rare earth elements and you take a ton of discarded devices like computers and, and cell phones. And in those, in that ton of discarded devices, the percentage of rare earth elements is 10 times what it actually is in the soil or 15 times much, much larger is much richer. So if you had technology, if you had the skills, if you have the, the, the ability to actually extract some of those materials, the US could develop an advantage in that sector that currently doesn't even exist. So I think there's, when it comes to innovation and when it comes to applying some of these technologies, there's a lot of room to grow. It's not just how do we make something at the lowest possible cost, but it's also let's try to leverage what the US is actually good at and that is taking advantage of research institutions of technologies of of any kind of innovation in that sense. Well, I'm glad you brought that up because we will jump into some of those factors and you know what could be possible constraints. And I think the first one, of course, you've joined the Labor Markets Watch webcast. So of course I have to say the thing that I think it is most a concern for those that want to see this happen, I think is, is really looking at where we forecast labor shortages going forward. And I want to use at least, you know, a recent study from the Manufacturing Institute in Deloitte, 3.8 million workers, they think they are going to be short in manufacturing by 20331.9 million. They don't expect to be filled. So I think that gives you a sense of they still see growth, but I think they have an older workforce. I think they have kind of come through the pandemic, some of these employers and seen a lot of quits, a lot of those job opportunities that at least some of this data suggests a lot of the more production oriented work. Some of those were more eager to find jobs, you know, in leisure and hospitality and retail in another service occupation. So, so I would just say that you know, really to to really pin this discussion of do we have the workforce to expand what we are doing in some of these manufacturing sectors. I would point to what we've done. This is out of our our labor markets institute at the Constant Board and this is looking across all occupations. This is just a cleaned up aggregated version here, but you can find you know all 500 plus occupations listed and we've aggregated the these up across a number of of measures. So we have kind of put this against an index of what we consider a risk, but that is what is the 10 year forecast of the amount of workers that are going to be needed? How easy is it to shift workers into those roles given their educational background, some of the work requirements, how much can it be offshore? You know, the offshore ability or the ability to shift that out of the US and really alleviate that concern from a business standpoint? And to what degree, at least right now, do we think, you know, this can be automated or subject to some of those innovations that might be on the cusp? And I think what really resoundingly comes out here is that some of these things that we would circle as really mainstays of where we need a sufficient workforce to really roll out. Maybe a more ambitious industrial policy plan is around production, you know, installation and maintenance, you know, repair of some of these, you know, machine machinery and tools. And I think, you know, on down the ladder even to kind of maybe the lesser skilled version of some of those, you know, similar roles. And what really, I think, you know, highlights this to me is that you've seen a lot of the, you know, I think, you know, push for chips, the semiconductor focus, I think of of a lot of this legislation. But roughly half of those workers are expected not to be able to be filled over the next decade either. So I think we had heard in the last several years of delays on, you know, for instance, TSM, CS, part of rolling out some of the, you know, facility, you know, construction that they would like to see because they say that they lack a workforce not only to build up some of this, you know, infrastructure that they need, but then they continue to operate it. So I think you were hearing from, you know, some of these kind of more advanced firms that they can't find the workers they need. So I think it is both a story of what is kind of the broad industrial workforce look like, but as more and more time goes on the focus on these advanced sectors, I think the skill composition of what these really look like in the workforce and manufacturing is going to change as well. So what I was going to ask was two-part, I mean it's about automation basically the question is on automation, how much of automation, if I might understand my collection this the future occupational labor shortage risk index, that's a mouthful of everyone you did use, you did have an automation factor into this. It was a small one, yeah. And we had actually kind of branched out to this work to our AI and automation risk index. So our plan is really to compile all of these together to give you kind of a a big occupational, you know, profile of what some of these these job types look like. And, and on that point, because I think something that is is under discussed at this point, you know, AI comes up, you know, quite a bit, Jen, AI, you know, helps I think a lot of knowledge workers. That's at least where we've seen the most rapid adoption. Something that I think is off most people's radars is how quickly robotics are moving. And I think the key in that is because there have been investors, business leaders that have identified this as a main issue going forward, not only labor shortages broadly, if you think about US demographics, but also to really, you know, fit some of these, you know, more niche skills. And so when I think of, you know, really the industrial robotics push, Amazon I think has has really jumped out ahead in the last year and really their larger role out of that. I think that really remains to be seen of what impact and how quickly that might be able to alleviate some of these concerns. Yeah, that's really interesting. That just reminds me of this whole conversation in the transportation space that by X years down to a high handful of years in the future, we're all going to have these deliveries by drone, right? We're going to be sitting in our living rooms and all of a sudden something is going to plop into our backyards from the air. And from what you're saying, and that's true, from what I've read, these the there are breakthroughs and there certainly is a lot of investment in that space. And so maybe that is the future we're looking at at this point. And you know, there are 8 to 9 million people employed in transportation warehousing, you know, at least to, to my knowledge the first actual road trip was conducted just a couple weeks ago I believe between Austin and and Dallas OR or one of those kind of Texas cities. And it was the first commercial self driven truck trip in America and they are starting with, you know, places that have nicer weather than New York or Chicago winter. But I think, you know, the technical limitations here are quickly receding. I think more and more we are going to see kind of policy and regulatory frameworks that might have to be amended. Right. And they usually are not changing quickly enough and now usually those regulatory frameworks there is lagging behind what actually is happening at the forefront of these these changes. Yes, and you know, I and I can't go through a full presentation, you know, without at least mentioning immigration as a piece of this. I know we'll touch on at least innovation and in just a moment, but not only from kind of a a full, you know, set of demographic concerns. What are we doing about really fit fitting really the labor force needs as the country of a whole. But I think when you really look at how some of the foreign born workers across the country fit into some of these roles, I think you do see that they are, you know, quite concentrated. So if we think about the skill sets we need, what type of workers do we need, I think all of this really becomes part of the same conversation. Well, yeah, I think that's absolutely true. I mean, you can look at, you know, it's it is May there's a lot of universities that is graduating. They are, they are, they are, you know, candidates right now into, into the workforce. And there's a lot of, you know, coming out of graduate schools as well as undergraduate schools, a lot of skilled individuals, especially international students. And if you identify, you know, skills mismatches and, and shortages, there's, there's a, a, a creative and innovative class of workers that is being, you know, educated certainly in this country. Yes. I'm also wondering, so the effects of wages also minimum wage between some of the southern like not southern, but just states across, right. There are a number of states across the have their own state minimum wage, New York being one of them and like and how that will affect all of this. But then also I guess even to the extent of unions, if that's part of the of the picture now as well. This is why we come so prepared, Jeannie. Yes, we do. Sorry. So I didn't have this one on hand, but I think the EIG group does some fantastic work on workforce. And I think this is really illustrative of when you look across not just the broad employment trend of manufacturing in the US is also shifting regions quite quickly and it is obviously really targeting that Sunbelt. There is kind of a union stipulation or I should say non union stipulation or reasoning behind that. But I think that is also perhaps one of these concerns when you look at, you know, a Michigan or some of these more industrialized Midwest cities, I think it's important that we still kind of see some investment there. I think it's very, very encouraging that it seems to be, you know, going quite successfully in those places because I think you have seen a lot of that activity move away and the workforce that remains there, you know, is a little bit left behind. You can see, you know, another set of grass that EIG does essentially maps out all of the counties across the US and essentially says there are a left behind few. And I think we all can at least kind of grapple with which ones those might be. And you really do see, I think still kind of this blue blue collar manufacturing, industrial production workforce remain there. And, you know, can we really revitalize those areas to make those, you know, hubs of what they weren't for? You know, Pittsburgh is one example. You know, I just want to quickly shift to kind of the innovation question. Pittsburgh is a great example. I think because you know, you have a university, you know, talent foothold, they have been really a leader for the last, you know, 10 or 15 years in my mind and really pushing out some of kind of the new age industrial kind of robotics and and trends. So my question is, you know, when we really look to some of the things that we ought to be doing Alex to really provide ourselves that room and spur of innovation that we need. Is it research, is it universities, is it all of the above? How much is industry really being brought in, you know, to some of the IRA chips, etcetera. You know, how can we really have a a coalition really is all pushing in the same direction. Yeah. I think it's, I think it's, I mean, it's too easy of an answer to just say it's all of the above, right? Because I do think that there are clearly components to this that are probably more important than others. So I think certainly it requires a certain willingness on the private sector to invest in innovation in technologies in these kind of sectors that we've already identified. And some of that has to happen just to shield some of the private entities from the risk with public sector funding support. We saw, we've seen that during the IRA is a great example of this production and investment tax credit. Even if you are, you know, sort of technology blind and you have a goal in mind, your technology blind of how you're going to get there. It's still will require some public sector money in order to for those industries to to to deliver critical mass. But I think it's very well said that they also depend on both research overall. I mean, you can all cite these types of products that have come out of federal labs like, you know, the Internet and certain, you know, whatever it is. That's all true. And in relation to that, I think the workforce component is absolutely critical. I do think that, you know, I look at my own students that I have, that I teach economics, and I look at them as like, oh, those are, you know, 4050% international. There's a lot of tremendous motivation, tremendous innovation that will come from them. I think as a country, it would be foolish to not find a way to harvest that kind of resource in whatever kind of sector they want to go into. But it's certainly true that there's a lot of potential. And, you know, we've identified, you know, some of these shortages. They also even exist in the economy broadly, how many million workers we're needing on an annual basis just to keep up with population and economic growth overall. Research institutions, universities, all of those certainly play a pivotal role. And I think there is a real competition going on between US institutions that have historically LED and institutions and other parts in other parts of the world. And increasingly, I think if you're a young person trying to, you know, do higher level graduate work and engineering and computer design and programming and whatnot, you might start looking around. And I think that's something as a country really need to grapple with. How do we attract the best and brightest to stay here? And it seems like, you know, all those are waiting for us to to, you know, leave our advantage to the sideline. You know, I have seen quite a few, you know, different call outs from different European nations, different, you know, organizations and administrations, you know, globally now that are reaching out to US scientific leaders, you know, seeing if they might have an opening to steal some of the talent that we have been able to acquire. Yeah, I think that's that's a very good point. And I think that, you know, coming back to just this whole conversation about onshoring, near shoring, reshoring, I mean we've looked at a lot of the data and it seems the data seem to suggest that bringing manufacturing back to the US is costly and time consuming. Yes, it's not just something that happens and drop of a drop of a hat. This takes years, sometimes decades and sometimes for one factory 10s of billions of dollars. So but that's not all of it. And we just try to write to flesh that out a little bit. It does take the right market, the right market location. It takes the respective infrastructure that you need to grow plants and so forth, but you also need then the human element, you need the labor force and that's that's part of it. I think that is a perfect tee up for really what I think of is, you know, maybe a slide that we can end on of. I think one of the, my favorite things of of the last several years is thinking about infrastructure is a much broader word than roads and bridges and, and the things that we, you know, tangibly think about. And the American Society of Civil Engineers puts together an overall report card for the nation's infrastructure. We aren't, you know, an A+ student, I can say that. But I think what is interesting about this is that you do have kind of some of those elements that we were speaking to. You know, broadband is already, you know, one that we've talked about. But I think you really have schools in here as well, thinking about the human capital elements of kind of the workforce in general. But tell me, you know, from your perspective, I know you have a deep history, you know, looking at some of these things, why is this important for businesses and just as a baseline for some of the ambitious goals that we might have, you know, how can we focus today on on making sure that we have a, a playing field that is ready to go? Yeah. I mean, as a transportation and infrastructure economist by training, I, this is always resonated with me just because if I look at this sort of these conversation that sometimes takes place of as of why does a company want to locate in a certain part of the United States? Well, it's not just because of low taxes and it's not just because of cheap labor. It is actually a function of, oh, what is in addition, what's the road network? What is the connection to the water system? What is the electricity grid look like? Do they have reliable power? What does this actually mean in terms of once they produce goods and services, how do they get them to market? So infrastructure is absolutely critical. We see this every time. We saw this just last week with the strike of the public transit system serving, you know, travelers from New Jersey into New York City and all of a sudden an entire economy is coming to a halt. So I think this is absolutely crucial. I think the US, you mentioned that we're not the best student. I think that's true. I think the grade 5-6 years ago was actually worse than the sea. So maybe this is sign for optimism here, hopefully. But I do think that I think it's important that maybe that's that's sort of how I like to end it. It's not just to think about infrastructure as in, you know, planes, trucks and automobiles and how they travel, but it is about education, it is about broadband, it is about technology. It is about all these things and especially these sectors that historically have been underfunded and that also in part are now, you know, exposed to greater risks from climate change, rising sea levels, adverse weather advance more, more severe droughts and floods and heat waves. And these, these constraints and the pressures are becoming more severe and more frequent and ultimately we also need to build that into our planning. All righty then. Well, I guess that's that with that we'll, we'll need to end it. I just realized it's just one minute out. Thank you all for joining us today. It's been great to see you all. And let me just end with a couple of different closing notes. 1 is thank you, Mitchell. Thank you, Alex for joining us and, and Please remember to join us for our next webcast. Oh, and before I say that, let me just take one step back. There's an evaluation form. Please fill that out and soon and, and let us know how we're doing. 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