Wanted: Manufacturing Workers?

It may be hard to believe at a time like this, but many American manufacturing companies are actually citing labor shortages as an obstacle to expansion.  A recent article in the Washington Post highlighted the concerns many plant managers were having over filling skill-based manufacturing positions.  In a stroke of irony, as politicians and presidential candidates are trying to “‘bring jobs back,’ many manufacturers say that, in fact, the jobs are already here.” A report conducted by Deloitte LLP found that there are approximately 600,000 unfilled manufacturing jobs in the United States even with almost 13 million people currently unemployed.

Due to foreign competition, productivity gains, and structural shifts, it is well-documented that the manufacturing sector has shed millions of jobs in the past decade. However, these losses are not creating a surplus of labor with the qualifications to meet the changing demands of factory employment.  P.J. Thompson, president of Trans-Matic, a parts manufacturer, summed it up quite well in the piece.  “It used to be that a factory owner would say, ‘I need 20 guys,’ and pull them right off the street. Now it’s: ‘I need 20 guys with very specialized technical skills.’ There’s a mismatch.”

Owners and managers of these firms cite a few reasons for this shortage.  First, automation has transformed manufacturing and, subsequently, the skills needed to work on the factory floor.  Others see a cultural stigma associated with manufacturing work.  Young people don’t want to join a supposedly dying industry, nor are they as keen to get their hands dirty, arguing that they would rather have office jobs as “designers.”  Poignantly, the article underscores the fact that skilled positions on the floor often pay more – roughly 15-30% more – than those “office jobs.”

Seeing little help coming from public policy or educational institutions, manufacturers are taking it upon themselves to develop workers who meet their needs.  Recognizing the need to adapt, employers are turning to hiring those with the “right aptitudes” as opposed to the “right skills.”  Many are hiring untrained workers who still have an “inclination to work with their hands,” and then train candidates on their own and coordinate apprentice programs.  Others are arranging partnerships with community colleges to develop new curricula tailored to the changing demands of American manufacturing.  Taking cues from the very businesses they are supporting in their rhetoric, policymakers should continue to develop programs that expedite the needed structural adjustment of labor markets in order to meet the demands of U.S. manufacturers.  This is an important step forward in restoring the competitiveness of the American economy and the businesses that anchor its strength.

Posted by: Brian Gowen

Sources: The Washington Post, Deloitte LLP

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