To grow, American manufacturing needs better trained workers
Monday, July 25, 2016
U.S. manufacturing may be falling behind globally, but it's not simply because companies are shifting jobs overseas to save money. Jay Shambaugh, a member of the White House Council of Economic Advisers, puts it bluntly: The United States isn't keeping up with other countries in training workers with skills needed in today's manufacturing marketplace.
"I get frustrated when I hear other academics say, 'We don't make things in the U.S. anymore, we're a service economy.' That's just not true," Shambaugh said during a Brookings Institution meeting on the manufacturing sector. "Those goods made in the U.S. are competitive on global markets."
While manufacturing jobs are slowly returning to American soil — 60,000 in 2014, according to Marketwatch — Shambaugh expressed concern that workers might not have the skills to meet the technical demands of modern manufacturers.
"Firms are worried about do they have the right workers, and other countries do better than us at retraining and lifelong learning when a shock hits so that they don't lose them out of the labor force," Shambaugh said. "We don’t catch those workers well enough."
Automation is prompting companies to return manufacturing jobs to American soil, but it's also causing the need for more highly skilled employees.
For example, GE is moving 4,000 jobs from China and Mexico to a new factory in Kentucky. Robotic technology enables GE to invest two labor hours into each refrigerator it makes. "So it really doesn't matter if you make it in Mexico, the U.S. or China," said GE's CEO Jeff Immelt.
However, some companies are already having difficulty finding qualified employees to fill manufacturing jobs. A recent story in the Sandusky, Ohio News Messenger said thousands of manufacturing jobs in the state are going unfilled due to an unprepared labor force.
"From a business perspective, it is a lot harder to fill jobs than three or four years ago when unemployment was higher," said Tom Kern, the founder of Style Crest, a building products manufacturer. "I think the workers are out there, but they just might not be in our area or willing to relocate."
Kern added that some workers seemed unwilling to learn new skills because they assume the job won't be available for the long term.
Across the country, funding is being allocated for worker training programs.
In Arkansas, the University of Arkansas-Fort Smith received a $2 million state grant to train students in robotics and computer science. Kentucky has earmarked $100 million for workforce development programs after Volvo chose South Carolina for a $500 million factory citing concerns about workforce readiness.
New Jersey has also set aside money to help employers train workers for a changing job market. And in North Carolina, $3.4 million in state dollars was allocated to Gaston College to build a Center for Advanced Manufacturing which is expected to open in Jan. 2017.
Georgia has had some success by adding a "industrial maintenance" grant program at technical colleges that offers free tuition for students.
"Simply put, these positions are underappreciated," said Ben Hames, deputy commissioner of the workforce division at the Georgia Department of Economic Development. "These really aren't the jobs of the past generations. These are jobs that require education, formal training — really require individuals to bring quite a bit to the table."
Without intervention, the forecast from a 2015 report by the Manufacturing Institute could ring true. The report estimated 2 million manufacturing jobs will go unfilled over the next decade due to a skills gap between employers' needs and employees' abilities.
The report attributes the gap to several factors: a lack of science, technology and math skills among the workforce and younger people's negative perception of manufacturing jobs.
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