Behind the employment data: The hidden manufacturing job opportunity

Industry has 'multiplier' effect; 105,000 jobs were added in the last year.

Behind the employment data: The hidden manufacturing job opportunity

It’s no secret to economists that the health of the manufacturing sector serves as a bellwether for the U.S. economy. And while recent data shows that things are looking up — 105,000 jobs were added in the manufacturing sector over the past year alone — the manufacturing industry and the workforce at large face an increasingly pressing problem: the glut of unfilled jobs due to a skills gap.

The manufacturing sector is such a key indicator of the U.S. economy because it’s a "multiplier:" the industry has an inherent ability to produce jobs beyond the scope of just the organization that makes the goods. According to Art Wheaton, manufacturing industry expert at the Worker Institute at Cornell University, “It’s not just the person who puts the pieces on the car,” he says, “it’s the person who shipped the parts, the person who designed the product, the advertisers, the marketers. They’re all a subcomponent of manufacturing.” To put this in dollars and cents: For every $1 spent in manufacturing, $1.32 in additional economic activity is generated, according to the U.S. Bureau of Economic Analysis.

By these metrics, the recent data on the manufacturing industry paints a mostly rosy picture. According to data compiled by Wanted Analytics, ahead of the Bureau of Labor Statistics June report the industry rebounded after the December lull to reach its second highest additional job total in four years in March 2014 at slightly more than 278,000 jobs.

And yet, hundreds of thousands of high-paying manufacturing jobs remain unfilled. So what’s the problem?

In short, it boils down to skills. According to a recent study by the Manufacturing Institute, 80 percent of manufacturers report difficulty in finding skilled workers. This challenge is widespread. Its one Eric Isbister understands well. As the CEO of GenMet, a 60-employee metal welding company based just outside of Mequon, Wis., he is constantly in need of talented welders. To standardize the process, he puts every welding employee through the same training, and requires an American Welder Society certification. But it’s not simply an issue of training or certifications. More importantly, manufacturing has shifted to become an industry based in technology. Like many other sectors of the economy, it’s a field where workers are being challenged more than ever to maintain and upgrade their abilities to keep up with rapidly changing industry.

Contrary to popular belief, the demands of the manufacturing industry today require significant technological expertise. Drew Greenblatt, president of Marlin Steel Wire Products in Baltimore, Md., a company that specializes in making wire-hanging baskets for conveyer belts is particularly cognizant of this. Greenblatt says the current industry is far from your grandparents’ view of manufacturing.

“People think of the production lines, and what people did in the 1920s,” he said. “That’s out of date. It’s not measuring what’s really happening in American manufacturing.” To describe his industry, he uses words like “clean” and “safe” and “modern.” “Factories today are very sleek technologically,” he says. “People program software, people don’t do grunt work.”

For older workers who may have become accustomed to completing tasks in their own way, correct or incorrect, this can represent what feels like too big a gap to bridge.

Meanwhile, thousands of high-salaried manufacturing jobs remain open, waiting to be filled, with no one stepping up to take them. The average worker in manufacturing makes more than $77,000 per year, Greenblatt says. If the company handles exports, those wages are closer to $95,000 per year per high-skilled employee. With so many positions unfilled, that’s a hefty sum left on the table.

If the manufacturing sector is a bellwether for the U.S. economy, than the significance of this skills gap can’t be underestimated for it’s long term impact on the health of our workforce.

Education and reeducation are key to reversing this troubling trend.  And in some instances, business owners are taking on the burden of cost themselves.  T.R. Raimondo, chairman and coach of Behlen Manufacturing Co. of Columbus, Neb., refers to it as a “manufacturing renaissance.” 

He is affiliated with the “Dream It. Do It. Program,” an industry authority whose charge is to attract good candidates, educate and certify them.

Raimondo offers 100 percent tuition reimbursement and spends serious hours recruiting locally and around the United States.

“If everybody can get these skills we can make it happen,” he says, referring to hiring at Behlen, a company that employs 900 employees spread across a variety of facilities around the world.

So why does the head of a global manufacturing company spend much of his time getting in front of students and much of his resources on educating prospective talent? The answer is simple: He considers this looming skills gap as the biggest threat to growing his business.

“It’s a lot tougher to walk in the door with no skills than it used to be,” Raimondo says.