In my first post of four on the Skills Gap in manufacturing in the US, I offered an overview on what is the skills gap, offered an amazing infographic from workboots.com, and talked briefly about the outlook on the future manufacturing workforce. I also addressed a point in yesterday’s blog post about the loss of over 5 million manufacturing jobs in the last decade, and how regardless of a skills gap or not, there are a lot of unemployed Americans. Today, as I was researching today’s second part of the four part series on if there really is a skill gaps in manufacturing, I came across an interesting study via the Washington Post about if the US lost fewer manufacturing jobs than we think. The article speaks about “factory-less” manufacturers, such as Applie, Inc. and how there are jobs where people do the exact same job they would do if there was a factory, but are not classified as a manufacturing job because there is no factory.
So this leads me to the point about the hotly debated subject of if there is truly a skills gap in manufacturing or not, as evidenced by the ongoing depate on Gilcommunity.com and also this LinkedIn Discussion post asking “What Skills Gap? Are U.S. Manufacturing’s Fears Overblown?”. It typically boils down to statistics, and what statistics are being referenced, and what is not being included, such as in the study within the Washington Post article. As stated yesterday, there are some who think the skills gap in manufacturing is as large as 3 million jobs, but some, like the Boston Consulting Group study, who say there are only 80,000 to 300,000 jobs unfulfilled in manufacturing. Personally, I think the best statistics are from the Bureau of Labor Statistics who states that last month about 250,000 manufacturing jobs went unfulfilled. But, is this really saying there is truly a Skills Gap in manufacturing or are manufacturers not simply wanting to pay enough to attract the talent who expect to get paid more because manufacturers are now used to outsourcing? Let’s explore this further.
In a recent article in U.S News Weekly, they talked about two American companies related indirectly and directly to manufacturing jobs. They quote, CEO of IT Company, UST Global, Sajan Pillai, who said “Employers are seeking workers that have basic technical and math skills, but the requirements are much broader than the ability to code in HTML or do calculus. Rather, that employers need employees that are both STEM-capable but also “digitally confident” and fast learners, to keep up with technology. This quote is in line with Gary J. Beach’s book titled, “The U.S. Technology Skills Gap: What Every Technology Executive Must Know to Save America’s Future”, where he says that future manufacturing workers must not only be good at math and science, but must be well rounded and be proficient in the 5cs – critical thinking, communication, collaboration, creativity and confidence.
Pillai went further to talk about the life cycle of skills today, saying “The lifetime of skills is so short today,”. So, naturally, when it comes to manufacturing facilities where a large manufacturing trend in America is advanced manufcturing, manufacturers say those skills are increasingly hard to find. But, there is a proponent, stating there isn’t as severe as a skills gap in manufacturing as we may think. The Acting Secretary of Labor, Seth Harris said that the gap may not be as “acute” as some firms make it out to be, as wages are not skyrocketing for STEM jobs, and positions aren’t going unfilled for years at a time.
But, naturally, there was push back to this sentiment from an executive of an American manufacturer. Michael Araten, president and CEO of construction toy company K’NEX Brands, was cited saying that companies can simply look outside the U.S. for talent.
“The issue is that companies solve the problem because they can tap the world for talent and fill those needs,” said Araten. “The reason we’re not seeing wage inflation largely is because we’re in a global war for jobs.”
About 20 percent of all American manufacturing jobs are now in the science, technology, engineering and mathematics fields, with half of those open to workers who don’t have a four-year college degree, according to a new analysis by the Brookings Institution. It is often stated that STEM jobs are the types of jobs creating the skills gap in manufacturing. So why would there be a skills gap if there are reports stating that 50% of these types of jobs don’t require a bachelors degree?
Well the answer may lie in the funding strategy and tactics by the federal government when it comes to STEM education. The Brookings Institution report goes on to cite that of the $4.3 billion spent annually by the federal government on STEM education and training, only one-fifth goes towards supporting sub-bachelor’s level training, while twice as much supports bachelor’s or higher level-STEM careers. The vast majority of National Science Foundation spending ignores community colleges. In fact, STEM knowledge offers attractive wage and job opportunities to many workers with a post-secondary certificate or associate’s degree. STEM jobs that don’t require a four-year degree pay about $53,000 on average, about 10 percent higher than non-STEM jobs available to people with similar education backgrounds.
Academic education is vital, don’t get me wrong, but I think the above report from the Brookings Institution hits a point about on the job training, and the lack of experience to operate advanced manufacturing technology. Reading and doing are TWO different things. So perhaps the Skills Gap in manufacturing can be blamed on the lack of real world experience, and not on real world training, still creating a skills gap, regardless of if you need a degree or not to get a STEM job.
Many will tell you, as evidenced by the increase in STEM education, that much of the skills gap in manufacturing is created by jobs going unfilled for lack of qualified applicants. But there are some who argue that really it is mostly a corporate fiction, based in part on self-interest and a misreading of government data. But both academic research and a closer look at the numbers in the department’s Job Openings and Labor Turnover Survey show that unemployment has little to do with the quality of the applicant pool.
In a healthy economy, job openings are plentiful and unemployment is low. April’s tally of 3.8 million openings might sound like a lot, but it is still well below the prerecession average, in 2007, of 4.5 million openings a month. It is also far lower than the record high of 5.2 million openings in December 2000, when the survey was started near the peak of a long economic expansion.
If a manufacturer really needed workers, it would pay the amount it would take to get that talent. That is not happening, which calls into question the existence of a skills gap in manufacturing as well as the urgency on the part of manufacturers to fill their openings. Research from the National Bureau of Economic Research found that “recruiting intensity”, which is a measure of a business’s efforts to fill job openings, has been low in this recovery. Employers may be posting openings, but they are not trying all that hard to fill them, say, by increasing job ads or offering better pay packages.
Given all these arguments, would you say there is or there is NOT a skills gap in manufacturing? Again, as stated yesterday, there are still more than 11 million unemployed Americans. Regardless of who is to blame for the shortage of jobs or if there truly is a skills gap in manufacturing, it all comes down to PERSONAL CHOICE by individuals and as business owners to do our part to invest in our workforce either by training, or by ponying up more money to hire and truly invest to get where we all need to go long term.
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