By Kasey Gatson
Kasey Gatson graduated in the spring of 2016 from Westminster College with a degree in Secondary Business Education. She is currently pursuing her MBA at William Woods University while serving as a graduate assistant coach for the women's basketball team. This excerpt is from a paper she wrote for her graduate economics class.
Americans have enjoyed a stable economy since the Great Recession of 2008, but as the manufacturing industry leaders look to the horizon they cannot help but feel anxious. Unemployment topped out at 10% in October of 2009 and has been improving ever since. The unemployment rate is down to 4.5% but there remain 6 million jobs unfilled and that’s what scares manufacturers--the vacancies (Bureau of Labor Statistics, 2016).The National Association of Manufacturers (NAM) estimates that by the year 2025 U.S. manufacturing companies alone will face 2 million job vacancies (Moody and Bolden-Barrett, 2017).
The bottom line: there are jobs available, but no one with the right skill set or training to do them. The shortage is so severe that a recent survey of NAM members revealed that 90% have moderate to serious trouble finding qualified employees (Gallagher, 2017).
To understand which jobs are vacant an understanding of the manufacturing industry is necessary. Manufacturers contributed $2.18 trillion to the US economy in 2016 (National Association of Manufacturers, 2016). The definition of manufacturing is to take raw materials and add value by changing their form or function. Examples of manufacturing jobs include engineering, electrician, mechanic, metal fabrication, assembly, welding and textile production. Manufacturing jobs often require hands-on activity and work, but over time modernization has brought computerization into the field. For many manufacturing jobs, technology skills and an able body are required, but as in any industry a variety of pay scales, required education, physical requirements and creativity are involved. Today manufacturers must be able to do high level math, program and use large machines safely, efficiently and accurately, adapt with changing technology and work as part of a team.
In 2012, the median age of manufacturer workers was 2.4 years older than the median other, non-farm workforce age; manufacturers will be the first and likely the most affected by the retirement of the Baby Boomer generation (Manufacturing Institute, 2013). Their workforce continues to grey and finding replacements has grown increasingly difficult, and finding qualified replacements is even more challenging. Recently the situation involving the long term vacant manufacturing positions, the Baby Boomer’s impending retirement, and the lack of qualified applicants to fill the positions has been referred to as the “skills gap.” The skills gap describes two problems: 1) the deficit in willing bodies to perform manufacturing jobs, and 2) the people who are willing to take the jobs lack of knowledge and skills.
America already outsources production to foreign shores, but many manufacturing jobs cannot be easily or cheaply outsourced because of the minimum requirements of mid to high level math and technology understanding--something sweatshops employees who have little to no education generally don’t possess. Plus, America already trades at a deficit, outsourcing more production certainly isn’t an effective solution.
The number one reason finding qualified replacements is a problem in the first place underlies all the other reasons, and is what is known as the “image problem.” The majority of America is stuck on the 1950s idea of manufacturing careers as dirty, back breaking, mindless labor with low to mediocre pay, when the manufacturing of today is extremely different. One of the most common comments on tours of plants is how clean and wide open the space is--not at all what the person had pictured in their mind before the tour: a dark, filthy, poorly aerated factory. (Moody and Bolden-Barrett, 2017)
The image problem can be seen underlying many of the other challenges in filling vacancies within manufacturing. For instance, school success is measured by test scores and the percent of students who are sent to college. Most manufacturing jobs require training or certification, but not college. And because guidance counselors have been conditioned to think “send John to a four-year college or university,” they only suggest trade school, technical school, or manufacturing careers to a handful of students. (Gallagher, 2017)
This piggy backs onto the young people who know very little about and have very little interest in manufacturing. In a poll conducted by the Foundation of Fabricators & Manufacturers Association, 52 percent of all teenagers said they have no interest in a manufacturing career. Of the 52 percent who did not have interest in manufacturing, around two-thirds (61 percent) perceived a manufacturing career entailed a “dirty, dangerous place that requires little thinking or skill from its workers and offers minimal opportunity for personal growth or career advancement.” In the most recent “U.S. public opinions on manufacturing” study conducted by The Manufacturing Institute and Deloitte, Gen Y (ages 19-33 years) respondents ranked manufacturing as their least preferred career destination. (Giffi et al., 2015)
Prestigious career and manufacturing do not belong in the same sentence to most young people because their perception of a factory is still the factory in which their grandparents or great grandparents worked. Young people don’t realize the vast opportunities within the industry. The only stories they’ve heard from their grandparents are of 1950s and 1960s factories--not the state of the art, safe, well-paid environments of today. Four year universities and society as a whole sell young people the idea that the path to a prestigious career and successful life is a four-year degree in finance, marketing, law, engineering or teaching. The image problem has been built into society. (Moody and Bolden-Barrett, 2017)
The fear of relocation of jobs to China contributes to the skills gap as young people don’t perceive manufacturing as a stable career choice. This idea stems from the image problem as well. According to the Bureau of Labor Statistics, from 1990 to 2016 St Louis factory jobs dropped from 190,000 jobs to 111,000 jobs and while this is a lot of jobs, most of them were lost to automation and computerized manufacturing. The jobs that were lost were the manual labor jobs of moving boxes or loading trucks. The jobs which lack qualified candidates--the electricians, welders, and machinists--are all secure! (Gallagher, 2017)
As aforementioned, the aging of the manufacturer workforce is cause for concern. Workers approach retirement and ideally employers would hire new recruits who would be trained by the retiring workers. But the new recruits don’t seem to exist. Most of the training required is on the job. It isn’t taught in a classroom so getting retiring workers to transfer their wealth of knowledge and experience onto new workers is important for the efficiency of the manufacturing process (Gallagher, 2017).
Worker retention and need for workplace diversity are other areas of concern in the manufacturing industry which contribute to the skills gap. Manufacturers spend money recruiting and training qualified workers, they gain skills and experience and then they leave for higher pay or more prestigious jobs elsewhere. To walk on a plant floor on United States soil would be to see an 81 percent white and 71 percent male work force. What is worse the diversity within the industry has worsened in the last 20 years as women lost 3 percent representation while the black population managed to hold steady at a mere 10 percent of the workforce. (MAPI, 2016)
Manufacturers have been squirming at the skills gap increasingly since the turn of the century because the acceleration of technology has changed the industry so much. Their efforts to decrease the gap have included a number of strategies: head hunters, hiring fresh high school graduates, trade school involvement and recruiting, the launching of JobCase and community involvement.
The use of headhunters fills jobs for manufacturers at a high price and doesn’t fix the problem. Headhunters just cause a giant game of musical chairs within the industry, because very few people outside are being recruited. Hiring students from high schools does pull in new blood, and the young 18 year olds are hardworking and willing to learn, but they lack the math skills to be successful. (Gallagher, 2017)
Trade school involvement and recruiting is becoming increasingly popular, but like head hunting, manufacturers are recruiting from a pool of people who became interested in the industry on their own. Interestingly, manufacturers in the St. Louis area must hire Ranken and Southwestern Illinois College students in their first year of the two-year program because by graduation they’re already all hired. (Gallagher, 2017)
JobCase has been an innovative attempt to build networking and increase diversity within the manufacturing industry. It is the manufacturer's version of LinkedIn. JobCase is so new it is hard to tell if its footprint is leaving a mark but the 70 million members would certainly suggest JobCase is experiencing some success. (JobCase, 2017)
Since 2015 manufacturers have started to make a greater push for community involvement (Giffi et al., 2015). This really is the solution to overcoming the image problem, but it will take years to orient generations to manufacturing as a respectable career.
For the manufacturing industry to recruit the more than 2 million people needed to fill the projected vacancies in 2025 they need an aggressive, comprehensive strategy that treats more than the symptoms. The image problem is holding the industry back: buckle down and attack it by spending money as an industry on changing public perception.
The first thing manufacturers should do is to begin recruiting at a younger age. Invite elementary schools to come tour plants and factories so their young minds can become familiarized, even romanticized, with the idea of manufacturing. Children love to build things, and manufacturing is all about making goods. Let children’s dream jobs expand from nurses, teachers and firefighters to include jobs such as welders, assemblers, and machinists. Go into junior high schools and inform students about the opportunities within the industry. Elementary and junior high students grow into high school students and if those high school students have no previous exposure to manufacturing then they’re told to go to college, and being familiar with no alternative they follow instructions. Junior high and high school students should be aware of wage comparisons of white collar vs blue collar jobs. Although a little outdated here are a few comparisons of mid-career salaries as of 2009 (Payscale, 2009):
White Collar Blue Collar
Civil Engineer: $61,100 Elevator Installer/Repairer: $63,500
Clinical Laboratory Scientist: $56,268 Construction Contractor: $59,927
Architect: $54,291 Lineman: $58,720
Bank Teller: $27,714 Auto mechanic: $41,136
Marketing Manager: $60,849 Telephone Equipment Engineer: $62,816
Pay is competitive, and in many cases superior! Young people aren’t even informed about manufacturing careers because of a misleading bias towards manufacturing jobs as blue collar being synonymous with low pay. Money talks: Post these pay comparisons everywhere! Get young, greedy Americans excited about manufacturing careers.
Besides changing the public perception, apprenticeships, certifications and increased benefits need to be implemented in the industry. Apprenticeships have been used in Switzerland and other places in Europe with great success. Apprenticeships give new employees on-the-job training from experienced workers and the mentorships also improve company culture, loyalty and retention (Gollagher, 2017).
Certifications have been explored in recent years as well. Certifications for specific trades, tasks, machines etc. allow employees to move vertically and horizontally within the business and increases public perception because a name/license/certificate is attached to the job. Finally, increased benefits attack the need for diversity most directly. The average manufacturer earns $26 per hour, but without paid leave, maternity leave or vacation days, women are not likely to be interested (National Association of Manufacturers, 2016). Increasing benefits will also help to change the perception of the industry as it catches up with the rest of America’s “prestigious careers” in this category.
The American dream, a phrase coined in 1931, has changed with each generation. Originally the post-Depression idea was as James Truslow Adams said, “that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement.” Now the American dream includes owning a six- (or seven-) figure home, having a prestigious career which allows for a life of luxury, and retiring worry free. As the opportunities in America have changed, the widespread idea is if you want to live the American dream you must attend at least four years of college (Kadlec, 2013).
The reality is the opportunity to attend college is reserved largely for the white population and due to the dramatic increase in cost it is nearly impossible for hard-working students to put themselves through college. In-state tuition at public state universities increased by 296% from 1995 to 2015 (Mitchell, 2015). Gone are the days of saving your money as a high school student, working a job part time and graduating from college with little to no debt. The average American 2016 college graduate owed more than $37,000 in debt (Student Loan Hero).
Is this a life that is better, richer and fuller for everyone, with opportunity for each according to ability or achievement? The American dream will continue to adapt, and as colleges and universities costs continue to skyrocket, manufacturers need to take advantage. A generation of Americans who attended college and became debilitated by debt are now rearing children. They understand a college degree is no longer the open door it was for the generations before them. These young parents should be more open to steering their children towards other options.
Manufacturers can recruit America’s young people who ultimately cannot afford a college education but are racking up the debt anyway. Manufacturers can also recruit the college graduates who spent the money but didn’t get the job and are still saddled with debt.
The skills gap in the manufacturing industry, though foreboding, is certainly not impossible to overcome. The competitive price of entering the industry versus attending a four year college, the equal to superior pay grade once in the industry, the new exciting technologies, and certifications which endorse individuals’ skills and entice individuals to remain in the industry because of the opportunity for promotion, will all contribute to filling the gap and ensuring Americans continue to live, as James Truslow Adams said, a better, richer, fuller life with opportunities for each according to ability and achievement.
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