Manufacturing holds a vaunted place in the American psyche. From Henry Ford to the modern era, manufacturing is often seen as the epitome of America’s industrial prowess. With manufacturing so intimately intertwined with the nation’s self-image, it’s natural that fears about manufacturing’s decline will organically extend to fear about America’s decline. We hear this sentiment often echoed by politicians. But is American manufacturing actually in decline?
While the evidence paints a mixed picture, several distinct trends emerge. Here are the five most notable:
1) Due largely to automation, manufacturing productivity has nearly doubled over the past twenty years
2) In contrast to the service sector, manufacturing employment has remained stagnant the past twenty years
3) Despite employment stagnation, the manufacturing sector faces a widening shortage of workers
4) The manufacturing labor shortage is largely due to a lack of talent with required skills
5) Due to labor shortage, manufacturers are squeezing more out of their existing workforce
Bottom Line Nationally:
The stagnation in manufacturing job creation does not mean there are not opportunities in the sector. On the contrary, the productivity of American manufacturing has exploded and as baby boomers continue to retire a multitude of high-paying jobs are opening up. The problem is a skill gap – there are not enough skilled workers to fill the openings. In lieu of a trained labor force, manufacturers are forced to stretch their human capital through frequent mandatory overtime. This creates added payroll burdens and employment law complexities.
But is there a solution? Of course there is a solution and it is not magical or global or even political. The manufacturing sector’s best approach to meeting its labor needs is via a thoughtful, systematic, and strategic approach to recruiting, managing, and developing talent.
While we speak about the manufacturer sector nationally, the lack of skilled workers also impacts our local and regional businesses. Every day Minnesota business owners navigate their own workforce needs and challenges. For some, this skilled work force challenge creates immediate legal complexities and costs. For others, the lack of a skilled work force waiting to replace their aging work force impacts the long-term value of their business enterprise. Whether faced with a short-term or long-term challenge, most business owners grapple with these issues.
This article was written by attorney Kim Lowe.