Joe Biden’s presidency has witnessed significant gains in FDI capital investment, but job creation has followed suit only to a certain extent, with job creation rising in a number of battleground states but stalling in others. 

Between January 2021 and August 2024, the US has garnered $583bn in announced greenfield FDI capital expenditure (capex), according to fDi Markets estimates. That represents a 76.7% increase on the $329.96bn-worth of FDI pledged during Donald Trump’s entire presidency, from January 2017 to December 2020.

This capex uplift has partially translated into more new jobs too. FDI projects created 740,717 jobs during the Biden presidency up to August 2024, which is 21.2% higher than the 611,008 jobs created during Mr Trump’s full term, according to fDi Markets estimates.  

The FDI job dividend during Mr Biden’s years appears meaningful in a number of swing states too, fDi Markets estimates show. Soaring FDI has already created more jobs than during Mr Trump’s presidency in four of the seven swing states of the 2024 elections: Georgia, Arizona, North Carolina, Nevada. 

However, it’s a more nuanced picture in the remaining three swing states. The impact on employment appears marginal in Pennsylvania, while it created fewer jobs in Michigan and Wisconsin than during Mr Trump’s years. The same applies to two other Midwestern states that used to be considered swing states before turning towards the Republicans: Ohio and Iowa.  

FDI’s declining job intensity

The relationship between jobs and FDI has become a political flashpoint ahead of the November 5 elections as the Nippon Steel saga in Pennsylvania unfolds. 

Although the job dividend of greenfield FDI is typically considered more of a guarantee than the job dividend of cross-border mergers and acquisitions like Nippon Steel’s proposal to acquire Pittsburgh-based US Steel, the job intensity of greenfield FDI projects is also changing. 

Particularly for the type of reshoring industrial investment the US has experienced during the Biden years, economies of scale and automation are key elements of the business plan of foreign investors. That inevitably reduces the job dividend of new FDI projects. 

Under the Biden administration, foreign investors have created 1.3 jobs for each million dollars of pledged capital investment, fDi Markets figures show; that compares to 1.86 during the Trump presidency, and an average of more than two new jobs during Barack Obama’s two terms in the White House. 

In the first eight months of 2024 alone, the rate of job creation per million dollars of pledged capital investment in the US has fallen below 1 for the first time on records, fDi Markets figures show. 

This trajectory of FDI job creation has fully manifested itself in states like Michigan and Wisconsin. In the former, foreign investors pledged $2.9bn more in greenfield FDI during the Biden years up to August 2024 than in Trump’s full term, but they created 6080 fewer jobs on a like-for-like basis (Mr Biden's first 44 months in office versus Mr Trump’s first 44 months), according to fDi Markets estimates; in the latter, they pledged $815m more, but created 1,867 fewer jobs. 

Other factors are playing a role too. Samir Kapadia, managing principal at the lobbying and advisory firm Vogel Group, says while the Inflation Reduction Act and Bipartisan Infrastructure Law “were heralded as major job creators”, many projects earmarked for incentives have not yet broken ground. 

“That’s largely due to the design of the incentives and grants themselves, which were in many cases haphazardly written and overly onerous [on] foreign direct investors,” he says. The Biden administration “tried to do too much” with incentives compared with the “simpler philosophy” of the Trump presidency.

The new reality of FDI, as well as the delivery challenges of some of the projects supported by the industrial policies introduced by the Biden administration, makes it less straightforward for the Democratic candidate, Kamala Harris, to transform the big foreign investment wins of the Biden administration into votes, particularly in key battleground states.