Bringing the State Back In (Again)

How to Improve Industrial Policy? Look Overseas

Industrial policy is back. Historic legislation like the CHIPS and Science Act, the Infrastructure Investment and Jobs Act, and the Inflation Reduction Act prove that state capacity is once again at the center of the US policy agenda. But because of political constraints, much of today’s industrial policy has relied on private subsidies and tax credits. In a new essay collection from the Roosevelt Institute, six scholars explore what the future of US industrial policy could look like, with lessons from case studies across the world.

“The ideas in this collection have two things in common,” Roosevelt’s Todd N. Tucker writes in the foreword. “First, the cases described in each essay involve a more active role for the state in the economy than neoliberal scholars or policymakers in the United States have embraced in recent decades. Second, they have been practiced somewhere in the world at some point in time (including right now).”

Industrial Policy 2025: Bringing the State Back In (Again) illustrates the possibility of using a broader range of policy tools to address the climate crisis and to bolster industries that enable human flourishing. From using state financial institutions to fund projects to ensuring a just transition for workers, these essays provide rich analyses that can help bring global industrial policy ideas to the US.

Read each essay:

• The Role of State Ownership: Overview of State-Owned Entities in the Global Economy – Kyunghoon Kim
• Finance as a Tool of Industrial Policy: A Taxonomy of Institutional Options – Saule T. Omarova
• Leading with Industrial Policy: Lessons for Decarbonization from Swedish Green Steel – Jonas Algers
• Just Energy Transition in the Time of Place-Based Industrial Policy: Patch or Pathway to the Green Industrial Transformation? – Andrea Furnaro
• Fair Transition Funds, Employer Neutrality, and Card Checks: How Industrial Policy Could Relaunch Labor Unions in the United States – César F. Rosado Marzán
• Electric Vehicles: How Corporate Guardrails Can Improve Industrial Policy Outcomes – Lenore Palladino

Sectoral Bargaining Can Raise Wage Floors

Twenty states still adhere to the paltry federal minimum wage of $7.25 per hour, which hasn’t budged since July 2009. Paired with declining union density as a result of corporate attacks on collective bargaining, real wage erosion has burdened US workers for years—especially those in the hardest-hit sectors. In a new brief, Roosevelt’s Alí R. Bustamante explores how sectoral bargaining can empower workers and raise wages.

Industry-wide collective bargaining has proven successful in numerous European countries and has increased wage floors without sacrificing employment. In the US, it could help increase wages in the most distressed industries, like manufacturing and transportation and warehousing.

Read more in “Raising Wages through Sectoral Bargaining.”

What We’re Talking About

“Judging by their recent report on corporate taxation, the Roosevelt authors seem determined to build on their recent victories, not by resting on their laurels but by underscoring the stakes of their fight.”

Thank you for the superb piece, @jthorndike! https://t.co/1RN8iokrbO

— Roosevelt Institute (@rooseveltinst) February 15, 2024

What We’re Reading

Want To Really Help Children and Families? Tax Corporations – by Reuven Avi-Yonah and Roosevelt’s Niko Lusiani and Emily DiVito – The Hill

It’s Time to Put Workers at the Center of Workforce Development Policy – by Roosevelt’s Alí R. Bustamante – DC Journal

Built-In Bias: Study Finds US Factory Boom Disproportionately Favors Poorer Counties – Reuters

Wealth Disparities by Race Grew during the Pandemic, despite Income Gains, Report Shows – Associated Press

Dani Rodrik: Doing Industrial Policy Right – Financial Times