| Bob Jirsa, managing director, McGladrey |
I am absolutely confident manufacturing will recover. What worries me more is the outlook for job creation.
McKinsey Global Institute's (MGI) jobs recovery report, released in June: An economy that works: Job creation and America's future, did manage to shock me. MGI found the length of time it is taking for employment to recover from U.S. recessions has expanded exponentially since the 1990s. The average employment recovery after the recessions occurring between the end of World War II and the end of the 1980s took 6 months. That jumped to 15 months following the 1990-91 recession, and to 39 months after the 2001 recession. Additionally we are all aware of the large number of people being "underemployed" in new positions, and others just giving up and "retiring" early. "At the recent pace of job creation," says MGI, "it will take more than 60 months after GDP reached its prerecession level in December 2010 for employment to recover."
Five years! And that is with several million Baby Boomers retiring. To put unemployed Americans back to work and accommodate all the new entrants into the workforce, the U.S. needs to create 21 million jobs by 2020. That, says the MGI, can be done if all the stars align. This is a daunting task, but we just have to get at it.
MGI expects six sectors to account for 85%t of new jobs created by 2020 (those same sectors account for 65% of all new jobs today). Manufacturing is one of the six. The primary challenge is to ensure we have a workforce with the requisite skills companies need to innovate and compete.
It is clear we cannot look to government. Mobilization needs to happen at the corporate level, working hand-in-hand with our nation's trade organizations and educational institutions. The NAM and its educational arm, The Manufacturing Institute, are on board ready to go.
Bob Jirsa is a managing director and leader of McGladrey's Manufacturing & Distribution practice in the mid-Atlantic region.
