Monday, February 27, 2012

Help Wanted

One area where there appears to be bipartisan agreement among our political leaders is the need to create, add or “bring back” manufacturing jobs in the United States. These reasonable sounding objectives are often coupled with ignorant statements regarding the supposed decline in American manufacturing or even at times irrational claims like “we don’t make anything here anymore.” The truth of course-which has been pointed out time after time by numerous and varied sources-is that we manufacture more now than we ever have, it’s just that we do it much more efficiently requiring fewer workers. You could make similar silly statements about American farming if you based you analysis solely on the number of farmers now compared with say one-hundred years ago.

But the little talked problem with all these plans to create more manufacturing jobs is that the United States doesn’t currently have enough skilled workers to fill existing manufacturing jobs. Creating new jobs sounds great, but who are you going to get to do them?

Three recent stories provide evidence of this issue.

The first was post by Veronique de Rugy at The Corner:

Third, a key argument for encouraging manufacturing is to create jobs and reduce unemployment. There are many problems with this. The goal ignores the fact that unemployment today isn’t the result of the losses in manufacturing jobs. That decline has been going on for 30 years and has been largely made up for by gains in productivity.

In addition, it is pretty obvious that the president’s preferential treatment won’t bring back the low-skill jobs that were lost. A recent piece in the Washington Post explains that, while president is making a big deal about bringing U.S. jobs back to the U.S., “many manufacturers say that, in fact, the jobs are already here. What’s missing are the skilled workers needed to fill them.” Basically, as factories were transformed through automation, low-skill jobs were lost as the laid-off workers were unqualified to run the new equipment.

The second was an editorial in the Minneapolis Star Tribune:

Enterprise Minnesota's annual State of Manufacturing survey was up against stiff news competition at the Capitol last week. It went public the same day that the Special Redistricting Panel issued new legislative and congressional maps. Legislators who missed the public-private partnership's announcement would be well-advised to circle back to it. The public policy concerns of 400 Minnesota manufacturing executives ought not go unnoticed.

Those employers provide the high-wage, high-tech, talent-attracting jobs that are key to maintaining Minnesota's prosperity. Manufacturing employment took a 50,000-job nosedive between 2007 and 2009 and has been slowly creeping back up since then. Keeping and adding to those gains is vital to sustaining the state's recovery from recession.

Notable in Enterprise Minnesota's fourth annual survey is the jump in worry about the ability to attract and retain qualified workers. Nearly a third of the manufacturers surveyed rated a shortage of qualified workers as a major concern, double the share who expressed that worry last year.

And finally a piece by that appeared in today’s WSJ by Thomas Hemphill and Mark Perry called U.S. Manufacturing and the Skills Crisis:

Yet this vibrant sector is being held back—and not by imports. Instead there is a serious labor shortage. In an October 2011 survey of American manufacturers conducted by Deloitte Consulting LLP, respondents reported that 5% of their jobs remained unfilled simply because they could not find workers with the right skills.

That 5% vacancy rate meant that an astounding 600,000 jobs were left unfilled during a period when national unemployment was above 9%.

According to 74% of these manufacturers, work-force shortages or skills deficiencies in production positions such as machinists, craft workers and technicians were keeping them from expanding operations or improving productivity.

A majority of U.S. manufacturing jobs used to involve manual tasks such as basic assembly. But today's industrial workplace has evolved toward a technology-driven factory floor that increasingly emphasizes highly skilled workers.

Any plan to add manufacturing jobs that doesn’t address this skills is not a serious proposal and is bound to fail. You can throw all the incentives you want at manufacturers in the form of tax breaks, enterprise zones, or less regulation, but if they can’t find workers to fill positions they won’t add them.

There are no easy answers to this problem, but some good places to start. One would be reinvigorating vocational training in high school and encouraging more kids to go into technical trades once they graduate. The college track is not for everyone and we’ve got more than enough college graduates. Kids need to know that not only do the technical trades actually pay pretty well, the technical skills that are most in demand are often transferable to a variety of jobs and industries. There will always be a need for those with these skills and while they may not be always doing the same work for the same company, they will be able to work if they want to. Can you say the same thing for someone picking up a sheepskin in one of the liberal arts majors?