CHAPTER 10

Don’t They Understand that Manufacturing Jobs Aren’t Coming Back?

LET’S GET REAL. Many of those blue-collar jobs lost over the past half century, and at an increasing rate during the Great Recession, are gone forever. Globalization means that capital flows quickly to countries with the lowest wages, and it flows so quickly that companies that left the United States for China are now leaving China, where wages have risen, for lower-cost countries like Vietnam. And importantly, although the problem of companies “sending jobs overseas” has become a populist rallying cry, advances in automation and productivity are actually responsible for much of the decline in manufacturing work.199 Making steel just doesn’t require as many people as it used to.

Is the only alternative a universal basic income? This proposal,200 currently chic among the tech set, will only further fuel the anger of working-class whites. What they want is not a social safety net but a job.

Even in a globalizing, automating world, that’s not nuts—and shouldn’t be impossible. But it will require new thinking by both conservatives and liberals. Liberals will have to move beyond their singular focus on the college degree as the avenue to economic achievement. Conservatives will have to recognize that providing jobs that yield a modest middle-class life for non-college grads will necessitate the kind of industrial policy that exists in Germany but has long been lacking in the United States.

An important priority is addressing the severe shortage of Americans trained for middle-skill jobs. “Friends who work in the U.S. (in water infrastructure) always complain to me about the poor skills of the average American workers they get. Trump would best start there,” commented John Verhoeven.* Middle-skill jobs typically pay $40,000 and up and require some post-secondary education but not a college degree. One effect of the excessive focus on college degrees is that the United States lacks people with mid-level skills. One study found “a lack of adequate middle-skills talent directly or significantly affected the productivity of 47% of manufacturing companies, 35% of health care and social assistance companies, and 21% of retail companies.” A 2011 survey found 30% of all companies and 43% of manufacturing ones had positions that had been open for 6 months that they could not fill. A more recent survey confirmed large gaps, especially in health care, technical sales, sales management, and in jobs that require computer and mathematical skills.201

The new manufacturing economy, concluded the MIT Task Force on Production in the Innovation Economy, requires “training for jobs that demand new combinations of book learning, hands-on experience, proficiency with digital technology, and ability to manage relationships face to face and with distant collaborators.”202 This is not what our educational system typically delivers.

Vocational training was an integral part of the high school curriculum until the 1950s, and all students were routinely taught (on a gender-segregated basis) job-ready skills along with other subjects. In the 1950s, tracking emerged that, in theory, separated students according to ability; in fact, less affluent students and students of color were tracked into vocational programs that were seen as strictly second class.203 The response was to abolish vocational programs, on the theory that every child deserved the best—to go to college.

This strategy was self-delusion. Not everyone wants to go to college, and even those who’d like to go can’t always garner the resources to accomplish this goal. Two-thirds of Americans don’t graduate from college, as we’ve seen. The decline of vocational education has meant that American employers can’t depend on a stream of employees with the specific skills they need. Employers have responded by “up-credentialing”—requiring college degrees for jobs that do not require college-delivered skills—as a way to weed out those who lacked the smarts or self-discipline to complete a college degree. This up-credentialing has two bad effects. Using college as a proxy for diligence and smarts, of course, disadvantages working-class kids who are smart and diligent but not college grads. It also means that a significant proportion of college grads do jobs that don’t really require college. As a result, a quarter of college grads and advanced degree holders will work for a lower median wage than associate degree holders.204

Too often today, college education serves as a finishing school for elite kids, who go there at 18 and study full time until age 22, building the credentials and entrepreneurial networks that will see them through life. This works for elite kids but not for many working-class kids. For those who do attend college, significant changes are needed. Arizona State University President Michael Crow has led the way in making the resources of a major research university more user-friendly for children of the working class. ASU now provides online courses and scheduling options that fit better with working-class lives. Online students typically take only two or three classes per semester, and most courses cover a semester’s worth of material in just seven and a half weeks. ASU provides a mentor to help students plan and navigate their college careers, which levels the playing field by providing nonelite students with the kind of advice and savvy that elite kids get from their parents.205

At a deeper level, what’s needed is a very different kind of education-to-employment system. Its key elements were outlined in 2015 by a task force convened by the Markle Foundation. Companies need to better define what skills they need, and develop private-public alliances to develop a local talent supply chain. High schools, community colleges, and universities should work with local businesses and with unions to develop educational and training programs that lead to industry-recognized certifications that provide employers the assurance that a worker has specific skills needed for specific jobs. Beyond high school, the programming should be relatively short; flexible and part-time programming works best for adults who are working and caring for families at the same time as they are continuing their educations.206 “And how do you propose they go back to school and pay for it if they don’t have a job? That is the Catch-22,” remarked Bill Parks.* The educational system that works well for the professional elites does not reflect the realities of working-class lives. What’s needed are targeted, fit-for-purpose credential programs. Participants trained for a job that then disappears could return to train for a job that’s just being created.

Creating a smooth education-to-employment pipeline is not a new idea. Over 70 years ago, the International Brotherhood of Electrical Workers and the National Electrical Contractors Association worked in partnership to create a training program, delivered through local affiliates, combining apprenticeships, remote online education, and personal coaching. The program has enabled hundreds of thousands of workers to earn credentials as wiremen or installers.207 This is a key role unions could play if, alas, they were not so embattled they need to spend disproportionate resources on just trying to survive.

Another example is the Automotive Technical Education Collaborative (AMTEC), a partnership between Toyota and a local community college that has grown into a network of 30 community colleges and 34 auto-related plants in 12 states. If someone has the AMTEC credential, “it’s a validation,” said a manager at a local Nissan plant; employers know what to expect. The credential does not require a college degree.208

The Golden Triangle Link provides a third model. It’s a private economic development coalition in Mississippi led by an Arkansas developer and Brenda Lathan, a black woman he promoted from the reception desk to be his director for business research and development. The Link connects local, state, and country governments, utilities, engineering companies, and local educational institutions (Mississippi State and East Mississippi Community College). In conjunction with the Center for Manufacturing Technology Excellence, which trains local people for skilled jobs managing computerized robot-heavy modern factory jobs, the Link has brought more than $4.6 billion in investment and 5,600 jobs to impoverished northeastern Mississippi.209

These are just illustrative examples of the ways in which educational opportunities can be restructured to provide the working class with meaningful skills. Doubtless there are others. My main point is that elites need to stop implying or stating that the working class should accept its diminished status, and start talking instead of steps toward jobs that provide a modest middle-class life.

The truism that manufacturing has fled the United States for good can be exaggerated. There are strategic, bottom-line reasons to keep manufacturing local. Take Boeing. In the early 2000s, Boeing shifted massively to outsourcing production of its new 787 Dreamliner aircraft, replacing its traditional hub-and-spoke supply chain around Seattle with about 50 production hubs around the world responsible for wings, engine, and so forth.210 Only final assembly remained in Seattle.

Global outsourcing resulted in quality breakdowns and cost overruns. In a product where millimeters matter, the components produced in other countries were not quite right, and quality control issues plagued the plane for years. The launch was delayed, and cost overruns were enormous. A strike added to Boeing’s woes. Its stock price sank so low that it took 6 years for it to recover.

In a 2011 speech, the CEO reflected, “We spent a lot more money in trying to recover than we ever would have spent if we’d tried to keep the key technologies closer to home.” In 2013, Boeing reversed course. It announced it was moving wing production back to Seattle and investing in a new factory and training there. It would continue to produce some parts abroad but “we need to bring it back to a more prudent level.”211

Commerce is getting both more global and more local. 3-D printing and other technologies pave the way for a new generation of niche products tailored to individual consumers and delivered with high-quality customer service. Liam Casey is incubating hardware start-ups that provide high-value products for which low-cost labor is not a key factor. “It’s more important that producer and customer are close to each other,” he remarked.212 This adaptation of the German model—make the best products, not the cheapest—holds the potential for new industry in the heartland. So does the fact that major producers like IKEA and Emerson are moving to regional manufacturing to solve transportation problems.213

These programs provide the model for the future of working-class jobs that yield a solid middle-class standard of living. But instead of nurturing a new industrial policy, too often what the white working class hears is the prescription that working-class men should take the kinds of low-wage jobs working-class women hold. That’s not the right message, as I explain in the next chapter.

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