The manufacturing talent gap is growing.
“Help Wanted” signs will be popping up across the U.S. in the next ten years as the manufacturing sector seeks to fill 3.4 million job openings, a recent report by Deloitte Consulting LLP and the Manufacturing Institute predicted. But there won’t be enough skilled workers for all of those jobs: the skills gap is expected to result in 2 million of those positions going unfilled.
“Creating a supply of workers with manufacturing skills – engineering, skilled trades, and production – will be critical to the future competitiveness of companies and the industry as a whole,” the report said.
Manufacturing is the largest industry in the U.S. It provides about one in six jobs, including electricians, plumbers, pipe fitters, steamfitters, electrical power-line installers and repair workers, sheet metal workers, structural iron and steel workers and much more.
“The issue that has concerned many for decades has finally reached a boiling point,” the report said. “The United States must find and develop people to address the talent shortage, or risk facing another wave of offshoring to places where talent is in greatest supply.”
The researchers polled a nationally representative sample of companies about talent in the U.S. manufacturing industry. 84 percent of manufacturing executives agreed there is a talent shortage.
Although the unemployment rate is less than five percent today, there are still 9.3 million Americans unemployed, and 4.8 million vacant jobs because businesses are struggling to find workers with the skills to operate new machines and manage new processes.
“I fear we’ve devalued these blue collar jobs,” said Jared Bernstein, chief economist at the Center on Budget and Policy Priorities.
Skill requirements are increasing.
“Yet, such jobs actually require considerable skills. If anything, their skill requirements are increasing. Today’s auto mechanic, for example, has a much more technically demanding job than that of 20 years ago,” he added.
What the U.S. is experiencing is “demographically driven,” said Daniel Marschall, the executive director of the AFL-CIO Working for America Institute.
Skilled baby boomers are retiring and millennials are not getting the skills they need to advance into these jobs, he said. “We hope we can turn things around, fund apprenticeship programs, upgrade existing worker skills, move them up and pay more,” Marschall said. There are many well-paying jobs that require more than a high school diploma, but less than a four-year college degree.
The average manufacturing employee in 2013 earned more than $77,000, including benefits, while machinists and welders with at least a high school diploma can earn above the national median wage of $34,750.
Manufacturing is well known for paying a family-sustaining wage even for workers with less than a college degree, according to the Association for Career and Technical Education (ACTE). Catherine Imperatore, ACTE’s research manager, says “ACTE members teach technical, academic and employability skills through classroom and lab-based learning, plus students often have the opportunity to learn their skills in the field through work-based learning (including internships and apprenticeships).”
One of the best ways to meet this potential shortage is through apprenticeship programs: paid training programs that combine on-the-job training and classroom instructions.
Why aren’t apprenticeships more popular?
In Washington state, aerospace and advanced manufacturing companies participate in a state and federally funded apprenticeship program to train employees for a variety of occupations.
In Illinois, a consortium backed by a federal grant and administered the Illinois Manufacturers Association Education Foundation has plans to create 600 apprenticeships, providing educational opportunities via an employer-sponsored program focused on manufacturing jobs and information technology.
In 2015, more than 52,500 participants graduated from apprenticeships, and more than 197,500 individuals nationwide entered the apprenticeship system, according to the U.S. Department of Labor.
However, the number of apprenticeships could be a lot higher. Less than five percent of young people in the U.S. train as apprentices, but in Germany, for example, the number is closer to 60 percent. After finishing mandatory schooling at about age 18, German students can apply to a company for a two or three-year training contract. If accepted, the apprentices generally split their time on the job learning a trade and taking classes at a publicly funded vocational school.
Unfortunately, apprenticeship programs fell out of favor in the last 20 years because educators and parents began placing more emphasis on academic preparation and the traditional four-year degree for most students. College graduates could earn so much more during a lifetime than high school grads, and the once practical “tracking” system was phased out of school curriculums.
Further, “corporations became oriented to outsourcing their work to other countries and that’s why they cut back apprenticeships,” said Marschall of the AFL-CIO.
But because of the growing shortages of skilled workers in the United States as well a move to bring outsourced jobs back home, apprenticeships are making a much-needed comeback.
Apprenticeships are a better deal for employees because “[they] promote employment security and the ability of individuals to move up their career path,” Marschall said.