It seems that everyday, our newspapers are clouded with stories of plant closures and layoffs. By reading the headlines, one could easily come away with the impression that U.S. manufacturing is in a state of permanent decline. But nothing could be further from the truth. In fact, a major manufacturing skills shortage exists today across the country. Key positions often take months—sometimes years—to fill.
Recent jobs data suggests that domestic manufacturing is on the upswing. Even after Hurricane Katrina, manufacturers reported a net gain of over 26,000 jobs in recent months. And according to Al Frink, Assistant Secretary for Manufacturing and Services for the U.S. Department of Commerce, growth could be even stronger if it were not for “high taxes, cumbersome regulations, energy, health-care and legal costs.”
Even with the rise of global trade and sourcing, domestic manufacturing is booming. But much of this growth is predicted on technology advantages and operational efficiency, which requires a new type of worker. Indeed, the future domestic manufacturing will require the companies and workers compete as much with their intellect and skills as their hard work and dedication.
According to a recent study the National Association of Manufactures and Deloitte Consulting there is “a widening gap” between the supply of skilled workers and manufacturers growing technical demands. The study notes that “Eighty-one percent of manufacturers report moderate to severe shortages of qualified works of all types, while ninety percent claim shortages of skilled production employees such as machinists and technicians.” The situation can only get worse, not better as “more baby boomers retire and the skills that workers need to help their companies compete in global economy ratchet up.”
What is causing the skills shortage? According to the authors of the study, the most critical factors are the nature of global competition and technology, which are forcing modern manufacturers and workers to attain a new level of skills and performance that were not required in the past. In recent Chicago Tribune article, Ron Bullok, the CEO of Bison Gear and Engineering Corporation in St. Charles, Illinois noted that “Relatively unskilled jobs, those are history … virtually every new machine tool we buy has a computer. You need to have a good basic math and science backgrounds.” According to the article, his company has 10 unfilled openings for laborers who can program and operate computer systems to “control the movement of tools and parts” and has been searching for over “a year for an electrical engineer with a background in motor design.”
Clearly, this case is not an anomaly. To stay competitive, U.S. manufacturers must recruit the right type of technical and managerial talent, which often takes time and money. Historically, in cases where skilled labor and strong demand came together, unions filled a critical void to help companies recruit and manage large workforces. But today’s market has changed. In cases where unions historically provided training, workers can now depend on company, local, state and Federal training programs to teach the advanced skills necessary to succeed (but which is not a substitute for high-school level math and science, which is critical in today’s manufacturing environment). Manufacturers and workers can also often turn to local community colleges for this type of training, which are often hidden goldmines for skills development.
While the future for skilled labor in domestic manufacturing is strong, the future for unions is bleak. That’s because in today’s market, unions consume more than they can provide. In the manufacturing sector, they no longer offer enough benefits to employees, while demanding far too much in return. And with the skills shortages in the market today, skilled workers are more likely to strike a compensation package on their own that better meets their own needs rather than relying on collective bargaining that puts the demands of a group—and its own overhead—over that of the individual.