Commerce head out to save US jobs, 1 computer chip at a time
WASHINGTON (AP) — Commerce Secretary Gina Raimondo only wears watches made by Bulova — a company that laid off her scientist father, closed its Rhode Island factory and moved production to China in 1983. The watches give Raimondo (a former Rhode Island governor) a sense of purpose as President Joe Biden’s tech minister. This responsibility is focused on creating the cutting-edge factory jobs in China.
“It’s been a tribute to my dad,” Raimondo said of her watch choices in an interview, “and a reminder to me that we need to do more to get good manufacturing jobs in America.”
Biden has tasked Raimondo with ensuring the United States will be the world leader in computer chips. Her performance could determine America’s position as an economic and militarily powerful country.
The computer chip is an essential component of autos, medical devices and phones as well as for weapons, watches, washing machines, guns, and other electronic gadgets. However a global shortage slows down growth and fuels inflation. Without computer chips , which are the switches that power our economy today, the United States may be overtaken by China and other countries that support their semiconductor industries.
To end the shortage, Raimondo, 50, must bring back production of chips as well as solar panels and batteries on the premise that these sectors are key to prosperity. It means that Raimondo must consult semiconductor executives nearly daily to monitor data about plant shut downs in Asia and seek additional government support. This will allow her department to be more than just a generic envoy for business.
“If we do our job right, and I believe that we will, 10 years from now you’ll see a fundamentally more vibrant, larger and revitalized manufacturing industry,” Raimondo said. It is a national security issue that America doesn’t produce enough semiconductors, solar panels, or critical batteries. This leaves us vulnerable, not just economically.”
Raimondo’s tenure at Commerce has been high-profile for a department that some presidents have paid little heed.
While the prior secretary was a great negotiator and was well-known, Wilbur Ross is best known for his inability to fall asleep at Trump’s events and for trying to explain tariffs on television by holding up a soup bowl. Only one acting secretary was available for the Obama administration.
Raimondo quickly made friends with Biden, who frequently quotes his parents to promote his policies. After she was interviewed last summer as Biden’s potential running mate, political allies noticed her ambitions. The Commerce Department could be a stepping stone for a Democratic Party that is increasingly being shaped by college-educated females.
“She, like the president knows the pain that a job loss can cause and has never forgotten her roots and the real effects economic and trade policy have on real people,” stated Ron Klain, White House chief of staff.
Rhode Island is home to grand Newport mansions once owned by America’s most wealthy families. These were also the factories that attracted Italian immigrants like Raimondo’s grandparents. Its politics are intimate because of its mix of size and social class.
Joseph Raimondo was six years old when he lost his job as a chemist at Bulova’s Bulova plant. Some of his admirers, as well as some detractors, claim that this formative event helped to make her competitive and meticulously detailed as a watchmaker.
She is known to email her staff with policy ideas at midnight and 6 a.m., according to tech CEOs. She is direct, focused, and full of questions.
Rhode Island had been a manufacturing state before Raimondo went to college in 1989.. More than 20% of the state’s jobs were in manufacturing then; now only 8% are, according to the Bureau of Labor Statistics.
Raimondo’s story is a microcosm of the the American economy, which emerged from World War II with its manufacturing might intact. Lower wages in the USA sucked away factory jobs, and the economy was reengineered to accommodate college graduates and the digital age.
The smartest and most fortunate children of ex-steelworkers and autoworkers received degrees from the top universities. So did Raimondo.
Like many in her generation, Raimondo worked to become part of the meritocracy. While working as a clerk for a federal judge, Raimondo became a venture capitalist and married Andy Moffit, a similarly well-educated husband. Federal ethics disclosures peg her wealth at as much as $10 million.
Raimondo is long interested in the details of how people and systems work. Raimondo quizzed Bob Walsh, the executive director of Rhode Island’s most prestigious teachers union, over lunch.
“Why are you doing what you do?” Raimondo asked. “You could make much more money doing something else.”
Before winning her first term as governor in 2014, Raimondo took controversial steps as state treasurer to shore up Rhode Island’s strained public pension fund. Raimondo resisted the teachers union’s call to raise retirement age and suspend cost-of-living adjustments. In the primary, she was opposed by many unions. Walsh supported her in the general election personally and gave her an organizational endorsement for her 2018 Reelection.
In an overwhelmingly Democratic Rhode Island state, Raimondo learned how to govern by building coalitions in a variety of caucus. One of Raimondo’s most prominent Democratic opponents, State Senator Sam Bell, stated that Raimondo was “brilliant” and “effective”, but that she had made mistakes in governing. He believes Bell has cut Medicaid and other services for the needy.
Now, Raimondo’s ability to parse numbers to explain policy comes into play on multiple fronts as she pushes Biden’s infrastructure deal, addresses clogged supply lines and promotes the $52 billion CHIPS Act to increase computer chip manufacturing and research.
“She’s a skilled presenter.” Walsh stated. “Her ability to make a strong presentation and understand the multiplicity of issues can once again be an advantage.”
For much of her lifetime, the key to economic growth was efficiency — payrolls held in check and inventories kept to just-in-time lest any excess supplies reduce profits.
The pandemic interrupted chip production at a time when there was increased demand for electronics. Extreme weather and other factors also affected the fragile supply chain.
” If ships stop running, then all these efficient supply chains collapse very, very quickly,” Revathi Advaithi, CEO of Flex, one the largest electronic manufacturer services companies in the world, said. The pandemic is only one aspect of this. This has been happening for a while .”
The United States needs to have a wider network of manufacturers close to home in order to avoid shutting downs and minimize the impact of disasters. It requires fail-safes that make factories more likely to reopen after they have been shut down. This means that it requires more high-tech manufacturing jobs.
Raimondo predicts that the shortage of computer chips will continue well into next year. This could be a problem. In a September report, the White House stated that the shortage could affect economic growth by a full percentage point.
” We all probably underestimated the impact COVID has on our supply chains,” Raimondo stated. “We have just suddenly shut down our economy. Automakers just stopped ordering semiconductors.”
The United States once accounted for 40% of chip-making worldwide; now it’s 12%. The cost of making a chip in the United States is 30% higher than in Taiwan and South Korea. The cost of making a chip in the United States is tens of millions. This can be a barrier to start-ups.
Raimondo makes personal decisions about the trappings that come with being a technocrat. Biden knew about her father when he interviewed her for Commerce. Raimondo was concerned about her teenage children Cecilia, Thompson, and Thompson moving to Washington.
Her brother advised her to take the job. Their father.