The Impact of Energy Policies on American Manufacturing and Workers

Thayer faculty member Erin Mayfield delivered an insightful presentation on "The Impact of Federal Policies on American Manufacturing and Workers" at the Innovation Agora during CERAWeek 2025. Mayfield examined the significant effects of American energy policies on manufacturing and labor markets, specifically in relation to the Inflation Reduction Act (IRA), the Bipartisan Infrastructure Law (BIL), and the CHIPS and Science Act. She underscored the substantial $800 billion allocated to US energy infrastructure and manufacturing during the last administration and highlighted that $600 billion of this funding is currently at risk of deployment due to uncertainties in policy priorities stemming from the recent change in administrations. The policy framework surrounding these acts was designed through rigorous modeling to facilitate considerable job growth, particularly in the clean energy sector.

Mayfield indicated that IRA and BIL could lead to the creation of 1.5 million additional energy supply-related jobs by 2030. She noted that these policies have already spurred an increase in labor demand, expanded labor supply, and redistributed employment benefits across various sectors. The clean energy manufacturing landscape is experiencing notable changes, with electrical equipment and component manufacturing projected to grow by 60%, closely followed by a 25% increase in motor vehicle production if policy implementation continues unabated. The legislation aims to incentivize domestic manufacturing through provisions such as the domestic content share tax credit and manufacturing tax credits, positioning American companies to gain cost advantages in the production of wind and solar technologies.

In her presentation, Mayfield also identified critical policy gaps that must be addressed for sustainable growth. These include trade policies that support friend-shoring, enhancing federal capacities to implement programs, and bolstering state-level capacity building. Despite the political complexities surrounding job creation in Republican districts, she emphasized the importance of timely implementation and effective coordination to ensure that job growth occurs swiftly enough to meet legislative expectations. As the energy landscape continues to evolve, Mayfield's insights underscore the vital interplay between policy design, labor markets, and the future of American manufacturing in a transitioning economy.