The Digital Revolution Needs Workers. Where’s the Plan for That?

The recent IndustryWeek article “Now Hiring? Reasons for the Workforce Shortage and What to Do About Them” pinpoints a problem: It notes that manufacturing posted a historic high number of job openings at 890,000 in August 2021 but only 31,000 net payrolls.

The author, Paul Wellener, also notes another key point: that “monthly quit levels are higher than both 2020 and 2019 levels,” and that the workforce may be reassessing career options. He also remarks that manufacturing may not be offering the wage raises of competitors in other sectors.

In a previous article, I mentioned that the National Association of Manufacturers (NAM) had made a positive out of the assertion that many manufacturers were prepared to more than double the starting wages of entry level candidates, from $7.25 to $15.50 an hour.

However, I just received a postcard from FedEx here in Portland, Oregon, which stated,  “Starting up to $25.50 per hour with no experience required.” And the Amazon distribution center near my home is offering $23 per hour with no experience. Wages are a big problem; manufacturers are going to have to take a hard look at wages if they are to get their fair share of young applicants and compete with other industries.

But the problem goes farther than entry level workers. If you go to the Bureau of Labor Statistics (BLS) website and look up the annual wages for a machinist, you will find that the median pay in 2020 was $45,040 per year, or $22.62 per hour. It takes three to four years of skill training to become a journeyman machinist, and this is three or four years of working at low wages until certified. It is hard to persuade high school graduates to pursue machining when after four years of intense skill training, they would make $45,000 per year when they can make $50,000 per year at FedEx with minimal  training.

The same problem is true of tool and die makers. It takes four to five years of training to become certified. The BLS says that median wage is $54,760 per year.

The other, even larger, problem is that skilled people have been retiring for the last decade and are not being replaced. BLS statistics according to type of business reveal the following:

Machine Shops. Machining—the material removal process used on metal, plastics, wood, ceramics and composites—is essential to thousands of products, from a tiny machine screw to a turbine bearing for a dam. It is absolutely essential for all industrial products but is also used in consumer products to make parts for everything from dishwashers and faucets to cellphones and toys. But since 2002, the number of U.S. machine shops has decreased by 5,295 shops (21%) and employment has decreased by 64,342 people (20%).

Tool and Die Making. Two classes of machinists that are critical to manufacturing are tool-and-die makers and mold makers. They are the highly skilled artisans who make the jigs, fixtures, dies, molds, cutting tools and gauges used in the manufacturing process. To become a journeyman in either category requires four to five years and 8,000 to 10,000 hours of training. Since globalization began in the 1980s, Asian countries have gone all out to develop more tool and die, mold makers, and advanced machinists. In the U.S. however, tool and die makers have declined from 83,463 in 2002 to 55,694 in 2020, a loss of 27,769 workers.

Mold Making. Industrial mold companies lost 1,334 shops (45%) and 10,481 workers (24%) between 2002 and 2020. The big question is, since a good deal of machining is now done overseas, is it possible to support all of the industries and companies who need machined products in the U.S by only using foreign suppliers?

Industrial Maintenance. The Department of Labor in their Occupational Employment and Wages Statistics says that in 2020, 65,000 maintenance workers were needed in 16 industries. The shortage of maintenance workers is most prevalent in the aviation, automotive, plastics and industrial machinery industries. To become a certified maintenance worker takes two to four years of training.

Welders. The American Welding Society says the United States may see a big-time shortage in welders in a few years. The society says “the industry is predicting a shortage of over 375,000 skilled welding professionals by 2023.” Welding is a hard career field to attract American workers, but it is fundamental to manufacturing.

The manufacturing worker shortage issue is threefold. First, the training programs to produce highly skilled workers are few and far between, and multinational corporations are reticent to invest in long-term training because of return on investment. Second, more skilled workers are retiring than are being replaced. Third, young people don’t see these highly skilled jobs as a good career investment.

In his article, Wellener said that less than 5 in 10 Americans surveyed believed manufacturing jobs to be as stable and secure as jobs in other industries—and less than 3 in 10 Americans surveyed would encourage their children to pursue a manufacturing career.

Young people, their parents and teachers all watch the news and have followed the decades long closing of manufacturing plants and the loss of jobs. They all know that American multinational corporations reserve the right to outsource production and jobs to low-cost countries around the world and that there is little job security. Despite all of the high school workshops and manufacturing day ceremonies, the view of manufacturing as an unstable sector is not going to change until the large corporations can offer some kind of guarantee for long-term training and job security.

Recommendations

• Changing the view of manufacturing as an unstable industry will require corporations to publicly address the problem of outsourcing and job security.
• Corporations will also need to publicly commit to long-term job training and paid internships to replace the highly skilled workers leaving the industry.
• Manufacturers will have to match the starting wages of Amazon and FedEx to get their fair share of entry workers.

The Cart Is Before the Horse

There is another fundamental problem that is largely ignored. Every day when I read IndustryWeek, there are stories about the digital revolution. Stories about Industry 4.0, transforming manufacturing’s future with the digital revolution, the Internet of Things etc. It would seem to me that we are getting the cart before the horse.

There seems to be an urgent need to convert the workforce to using digital tools when manufacturing can’t get entry level people; high skilled people are retiring, and there could be 2.1 million manufacturing jobs unfilled by 2030. And, in fact, in my own surveys, I have found that nobody, including the government, the people projecting the unfilled jobs or the manufacturing associations really knows what kinds of jobs and skills are needed to solve the unfilled jobs problem.

 So, I will end this with a question: Before we launch into another revolution, wouldn’t it be appropriate to figure out how manufacturing will recruit and train the people needed right now? 

Michael Collins is the author of The Manufacturer’s Guide to Business Marketing and can be reached at mpcmgt.net.