Tags: employment | wages | expanding | manufacturing

Full Employment, Higher Wages Hinge on Expanding US Manufacturing Base

Full Employment, Higher Wages Hinge on Expanding US Manufacturing Base
(Dollar Photo Club)

By    |   Monday, 30 July 2018 02:38 PM

The American worker is facing some tough challenges right now. There are some sixteen million Americans who are unemployed, underemployed, or have simply given up looking for work. Although things are looking up according to government unemployment statistics, these can be misleading. Labor Force Participation is not what it should be. At this point in our recovery at least 66% of able bodied Americans should be in the workforce compared to just 63% today.

The Trading Economics newsletter reports that the U.S. unemployment rate rose to 4 percent in June 2018 from 3.8 percent in the previous month, which was the lowest since April 2000 and above market expectations of 3.8 percent. The number of unemployed persons increased by 499,000 to 6.6 million.

The Unemployment Rate in the United States averaged 5.78 percent from 1948 until 2018, reaching an all-time high of 10.80 percent in November of 1982 and a record low of 2.50 percent in May of 1953.

What this means is that while millions of Americans are employed, the data again can be misleading. There are millions of Americans still sitting on the sidelines. Many of these are women and minorities. We are not preparing our people for the jobs and opportunities that exist today. It is time for our government, businesses and educational institutions to evolve from adversaries, and come together as partners in prosperity.

What’s more, too many of the jobs being created are part-time, low-paying positions.

This is especially prevalent for our veterans, where Marketplace quotes a new study from ZipRecruiter and Call of Duty Endowment that found that nearly a third of veterans are underemployed, which means they are working a job that they are overqualified for.   The U.S. Chamber of Commerce Foundation survey found that 44 percent of veterans left their first post-military job within a year — often because the veterans didn’t feel they were the right fit or because they struggled to find a sense of purpose in their job.

“Underemployment appears to disproportionately affect veterans, impeding their economic success after military service,” said Phillip Carter, one of the study’s co-authors and a former U.S. Army officer who directs the Military, Veterans and Society program at the Center for a New American Security. “However, current government statistics barely notice the underemployment phenomenon, and do not begin to constructively address it through improved training, job search and network programs, among other approaches.”

Fortunately, a solution is readily available to put veterans and others into meaningful, high-paying jobs.

“Over the next decade, nearly 3.5 million manufacturing jobs will likely need to be filled because of baby boomer retirements and U.S. economic expansion, according to the Manufacturing Institute. However, nearly half of these could go unfilled, as fewer than 10 percent of high school and college graduates are entering manufacturing today.”

One reason is the lack of interest and knowledge about today’s “smart” manufacturing plants. But a more important factor is the skills shortage in America. Training existing manufacturing employees and inspiring them is also required to qualify for today’s well-paying manufacturing jobs.

Media Planet notes that the scarcity of workers with the right skills has U.S. manufacturing executives worried. “In a recent survey conducted by the Manufacturing Institute and the consulting firm Deloitte, 78 percent of manufacturing leaders believe the talent gap will hurt their ability to adopt new technologies and increase productivity. However, with the right training and inspiration, workers can realize that today’s manufacturing jobs provide well-paying, fulfilling jobs in a collaborative, clean and safe environment.”

Media Planet showcases Project Lead The Way, a national nonprofit that gives K-12 students the opportunity to gain STEM skills. The organization develops world-class curriculum in computer science, engineering and biomedical science. It also trains teachers how to engage and inspire students in these subjects.

Along with better training, the key to growing our manufacturing base in this country is to ensure that we create an environment that makes it advantageous for American manufacturers to stay in America and not move jobs overseas. A much better outcome is to start bringing back home our manufacturing jobs, a process known as “backshoring or reshoring.” How can this happen if we do not have the skills to run the sophisticated manufacturing facilities of today?

There is too much false information about backshoring, particularly as it applies to American jobs being sent to China. The truth is that the bulk of reshored or backshored jobs — about 60 percent from 2010 through 2016 — came from China. Recent data from the Reshoring Initiative suggests that labor has become more expensive in China than in the past, with Chinese wages going up 12 percent to 15 percent a year for the past 15 years.

Even labor costs in Europe exceed U.S. manufacturing wages, with costs nearly twenty percent higher in Italy, sixteen in Germany and France, ten in Japan, and eight in the U.K. Besides this the social costs in Europe are astronomical.

The bottom line is that this country needs more jobs with a great deal more value – the kind of value inherent in manufacturing jobs. Manufacturing jobs are careers that can provide a good living for families. And the vast majority of these jobs do not require a lengthy and expensive education.

It is estimated that 70 percent of manufacturing jobs do not require a four-year college degree. Among the hardest positions to fill are mechatronics engineers — which are essentially mechanical, hydraulic and pneumatic engineers rolled into one. The job calls for an associate's degree and on-the-job training plus, in some cases, a willingness to spend long stretches away from home on service missions. It pays about $25 to $30 an hour.

Some people say that America needs to move on from manufacturing, but there’s clear evidence that a manufacturing rebound is not only possible, but well within our reach.

There is mounting evidence that there are good paying manufacturing jobs for people who need only invest the time and have the desire to learn the skills required to succeed.

Let’s not sell American manufacturing short. As it is said: “Manufacturing significantly boosts a region’s economic health and vitality, due to higher wages and economic output.”

Neal Asbury is chief executive of The Legacy Companies.

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There are millions of Americans still sitting on the sidelines. Many of these are women and minorities. We are not preparing our people for the jobs and opportunities that exist today.
employment, wages, expanding, manufacturing
Monday, 30 July 2018 02:38 PM
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