The Jobs Are There. Where Is the Training?
The manufacturing workforce skills shortage is growing as apprenticeships and training are declining. There is no evidence that most of America’s Multinational Corporations (MNCs) are investing in long-term, high-skill training that would help the skilled worker crisis in America.
A 2018 study by Deloitte and the Manufacturing Institute (MI) predicted that U.S. manufacturing would have 2.1 million unfilled jobs by 2030. In June 2022, the Department of Labor (DOL) Job Openings and Labor Turnover Survey (JOLTS) showed 793,000 unfilled manufacturing jobs. I tried to find out how many of these unfilled jobs are skilled versus unskilled, but nobody I talked to at the DOL had any idea. In fact, I couldn’t find anyone in government or industry who had any idea what kinds of manufacturing jobs are going unfilled.
Skilled Worker Shortages Are a Three-Pronged Problem
1. Entry-level workers: According to the Deloitte/MI survey, “These are the jobs that do not require technical know-how or industry knowledge, such as team assemblers, production work helpers and handheld tool cutters and trimmers.” They say that manufacturers are willing to pay $15.50 per hour, but that “applications are not pouring in.” It is a big problem for manufacturers because new workers without experience can get a job at FED EX as a package handler for $25.50 an hour with an attendance bonus. Wages are going up in many service industries, and $15.50/hour is probably not enough to interest a Starbucks employee to make the switch.
2. Semiskilled workers: These are jobs like CNC machine operators, welders, drill press operators, assemblers, grinders, machine operators, and tenders, which require classroom and hands-on training that can take several months up to one year.
3. Highly skilled jobs: These are the most critical manufacturing jobs because highly skilled workers are retiring faster than they can be replaced, and many industries need journeyman workers. But advanced training programs such as apprentice training are not growing in the manufacturing sector in the United States.
Training programs that lead to journeyman status take thousands of hours of training, and most of the skills are attained with hands-on learning, not classroom learning. An example is a journeyman machinist, which takes approximately four years or 8,000 hours to attain the 28 skills needed to become a journeyman on a wide variety of manual and CNC machines.
A January 2020 training survey by the MI shows that the average number of hours of training, per employee, among their members (mostly large corporations) is 27.7 hours per year, and for new employees, it was 42.9 hours per year. The training survey also shows that only 32 percent of members have apprentice training programs. MNCs, with a few exceptions, are not investing in advanced training that takes thousands of hours. The study says that “75% of industrial organizations identified reskilling the workforce as important or very important for their success over the next year, but only 10% said they were very ready to address this trend.”1
The 27.7 hours per year seems to indicate that the MI’s members are not going to invest in training the highly skilled employees they need for the future. So, what is their strategy?
Strategies Used for Decades
Instead of investing in long-term training, MNCs have been trying to solve the skilled worker shortage with stopgap measures:
• Hiring H-1B foreign visa workers: These visas are used mostly for engineers and in the high-tech industries are limited to 85,000 new jobs per year.
• Outsourcing: Moving production and jobs to low-cost countries.
• Automating: There has been a huge investment in automation such as robots, packaging machines, and automated production lines. But not enough workers can troubleshoot, operate, and maintain the automation, which has added to the skilled-worker shortage problem.
• Buying services: There are not enough tool and die and mold-making shops in the United States today. Corporations buy these services from foreign companies.
• Poaching trained workers: For many years, corporations have been stealing trained workers from their suppliers by offering higher pay and benefits.
From my interviews with leaders of manufacturing associations, I have concluded that despite the need, most manufacturers, including small and midsize companies, are unwilling to fund long-term training programs and instead want short-term training. The short-term approach will probably work for entry-level workers, but it doesn’t answer the multiple skills needed for tool and die, mold making, advanced machining, or all of the maintenance skills needed to troubleshoot, repair, operate, and maintain automated production lines.
The Deloitte report says 2.69 million manufacturing workers will be retiring in the next decade, so more training is probably the only real answer left. The big problem is that skilled people have been retiring for the last decade and are not being replaced. The DOL Statistics in their database showing Private Industry by six-digit NAICS Industry reveals the following:
Machine shops: According to the Bureau of Labor Statistics (DOL), since 2002, the number of machine shops has decreased by 5,295 shops (21 percent) and employment has decreased by 64,342 people (20 percent).
Tool and die makers: Two classes of machinists that are critical to manufacturing are tool and die makers and mold makers. In the United States 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 percent) and 10,481 workers (24 percent) between 2002 and 2020.
Maintenance: The shortages of maintenance workers are most prevalent in the aviation, auto, 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 industry is predicting a shortage of over 375,000 skilled welding professionals by 2023.”
The issue is fourfold. First, the training programs to produce highly skilled workers are few and far between and MNCs are reticent to invest in long-term training. 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. Fourth, entry-level pay is not competitive with other industries like Amazon warehouses or FED EX Drivers.
My assumption is that if a good percentage of these jobs are highly skilled, then we will need advanced or long-term training like apprentice training. However, it appears that the manufacturing sector is not investing in apprentice training. I have been following the Office of Apprenticeship training’s website since 2001, and the total annual number of registered apprentices in manufacturing has dropped from around 20,950 in 2001 to 15,510 in 2020 (15,510 apprenticeships per year is only 0.0012 percent) of the total manufacturing employees in the United States. Meanwhile, apprenticeships in other sectors such as construction are growing.
Industry Stability
In a November 2, 2021, article in IndustryWeek by Paul Wellener, he 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 MNCs reserve the right to outsource production and jobs to low-cost countries around the world and there is little job security. Despite all of the high school workshops and manufacturing day ceremonies, the view of manufacturing is not going to change until the MNCs can address the issues of job security, training, and wages. Here, are some specific recommendations.
• To change the view of manufacturing as an unstable industry is going to require corporations to publicly address the problem of outsourcing and job security.
• They also need to publicly commit to long-term job training and paid internships to replace the highly skilled workers leaving the industry.
• I also think they will have to match the starting wages of Amazon and FedEx to get their fair share of entry workers.
Today, manufacturing can’t get entry-level people, the high-skilled people are retiring, and the surveys show there will be 2.1 million jobs unfilled by 2030. If there is going to be a turnaround in American manufacturing, it is going to take a serious investment in advanced training and MNCs are going to have to lead the way.
1 G. Carrick, V.P. January 17, 2020. “The Manufacturing Institute Training Survey.” www.themanufacturinginstitute.org/wp