How to Tackle the Manufacturing Skills Shortage

Is there a skills shortage that is hampering the still modest, but encouraging recovery of U.S. manufacturing? That is increasingly the consensus among many economists, and surveys of manufacturing employers also suggest it is a big problem. When President Obama went to Milwaukee recently to laud the uptick in manufacturing in the state, the biggest complaint he heard was the difficulties those companies face in finding properly trained new workers.

What has really persuaded me, though, is hearing about the problem through the eyes of a union leader, Phil Neuenfeldt, president of the Wisconsin AFL-CIO, which whom I shared a stage Tuesday night for the Fireside Forum on Foreign Policy at the University of Wisconsin-Milwaukee. Neuenfeldt, a longtime member of the International Association of Machinists and Aerospace Workers, understands the ins and outs of the labor market for manufacturing and has been national leader in developing workplace training models.

He pointed out that the increasing disappearance of manufacturing jobs in the United States, which accelerated tremendously over the past decade, has had two pernicious effects on the remaining manufacturing labor force. One, and the data bear this out, is that manufacturing is a graying occupation. Most of the skilled jobs--welding, precision machining, tool, and die making--are held by older employees. Many fewer young people have been hired in recent years, and those who were became generally the first fired in the downturn.

As a consequence, the pipeline for training skilled manufacturing workers has dried up. Companies that used to have large apprentice programs shut them down because there were no jobs for the apprentices after training. Young people, even in heavily manufacturing states like Wisconsin, got the message and, where they were able, trained for other careers.

The result, no surprise, is that companies can no longer find the employees they need. We talked about some of the conventional remedies--expanded community college opportunities, which the Obama administration and some states have embraced, revival of apprentice programs, adoption of the German model that favors work-sharing over layoffs in downturns and thus preserves a skilled labor force.

But the bigger problem that Neuenfeldt's comments brought home to me is the need to build a greater degree of trust among companies, governments, and unions (not an easy task in Wisconsin, where Governor Scott Walker's decision to strip bargaining rights for public sector unions has prompted an unprecedented recall election). The United States has been in a vicious circle in which companies shed workers and shut down training programs, and the educational system responds by not preparing young people for jobs that no longer exist. And now as companies are again looking to expand, they cannot find the workers they need.

Creating a virtuous circle will require a longer term view. A clearer commitment by the big manufacturing companies to expand production in the United States (even as they may also be expanding abroad) would have positive ripple effects. Rising demand for skilled workers will encourage young people to pursue manufacturing careers, in turn encouraging community colleges and other educational institutions to step up training. The labor unions, said Neuenfeldt, are willing and eager to partner in such efforts.

The alternative is a worst of both worlds scenario--companies that want to expand here but can't find the employees they need, and Americans who desperately want those jobs but can't acquire the training and skills they need.