Viewpoints: Labor Shortage! Help Wanted!
Yes, the headline is correct and no, you do not have to have your eyes checked. A major dilemma facing our membership at AMT (and similar manufacturing industries) is the lack of skilled workers. Yet, surprisingly, we are constantly bombarded by news of manufacturing job losses.
Look, I am a facts and data operating person. From 1987 to 2002 the number of manufacturing jobs in the US was relatively unchanged. From 2002 through 2007, however, the number of manufacturing jobs fell approximately 15%. If you listen to populist politicians, the press, and pundits, they will tell you these jobs were exported to operations in Asia and elsewhere that utilize cheap labor. That is not entirely true. The overwhelming majority of those jobs were lost due to improvements in productivity here in the US.
Our consumption of durable goods is four times higher today than in 1990 and continues to rise. To keep up with our consumption here in the US, output per employee is twice as high today as it was in 1987. Although our output has significantly improved, we still could not produce enough products to keep up with demand. Thus we turned more and more to imports to supplement our quality of life.
Everything changes over time, and manufacturing is no exception. Most "touch" labor jobs have gone overseas, but the need for skilled labor remains high. For example, while the national unemployment rate is 6.5% as this is written, the rate is less than half that in skilled trades. The Society of Manufacturing Engineers has posted over 500 jobs on their Jobs Connection Web site page since November, and more than 1320 jobs currently remain unfilled.
If we want to continue to increase our nation's output of manufactured durables we will have to do it with fewer workers. In fact, that is exactly what we have been doing. Since 1979, value-added durable goods manufacturing has grown 2.8 times while employment in the sector has fallen. How did we accomplish this task? Productivity. And that is how this nation will compete against cheap foreign labor in the face of a national deficit of skilled machinists. We must increase productivity by investing in new technologies to remain competitive.
Manufacturing is going through its most significant transition since World War II. The transition can be separated into three categories—environmental, evolutionary, and revolutionary. The environmental transitions include shifting trends with regard to whom in the supply chain owns the production equipment, and the geographical location of industries. Evolutionary transitions take place in technology, such as the knee mill giving way to machining centers and the subsequent development of multitasking machines. However, the most exciting element of the transition is in the area of the revolutionary changes in technology. If you get a moment, review the Smart Machine being developed in a cooperative effort involving AMT, TechSolve, and the US Army (http://www.techsolve.org/SMPI.php). Predictive technologies, new materials showing up in consumer products, and additive manufacturing processes are examples of revolutionary technologies that are changing the way we manufacture products. But they only add to the wealth of your company if you invest.
Several weeks ago I heard Paul Zane Pilzer share his six laws of economic alchemy. Pilzer's sixth law is "The immediate economic potential for an individual, an industry, or a society can be explained by examining the technology gap—the best practices possible with current knowledge versus the practices in actual use." The technology is there for the taking. The best way to move your company forward, to be more competitive, is for you to invest in the latest and greatest—placing your company on the right side of the technology gap.
But, we need workers who understand how to utilize the new technology to make worldclass products. As the rate of change in technology accelerates, the demand for skilled labor will also increase. Today's manufacturing plants are not the 'smoke stack' plants of some 20 years ago. Today's plants are highly automated. Computer screens color the floor, showing what's going on at each step of the process, and the workers are more engaged in their work and output than ever before.
For generations our nation has been the world leader in manufacturing technologies, and the future is even brighter. But we must stay ahead of the curve. Help is wanted to meet our demands and to maintain our manufacturing excellence.
This article was first published in the March 2009 edition of Manufacturing Engineering magazine.