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Supply Chain News: Lack of Manufacturing Labor has Reached Crisis Stage, Manufacturing Institute Chief Says


Shortage of Millions of Workers Expected in Coming Years, 500,000 Now

Sept. 4, 2018
SCDigest Editorial Staff

The current shortage of US manufacturing workers "is a full-blown workforce crisis."

So says Carolyn Lee, executive director for the Manufacturing Institute at the National Association of Manufacturers (NAM), writing in a guest column on web site.

Supply Chain Digest Says...

NAM's Lee says that key to changing perceptions showing the manufacturing workers of tomorrow what the modern manufacturing industry actually looks like.

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Lee says that "I hear the same thing time and again from industry leaders around the country: America needs more manufacturing workers."

In a sense it's a good problem to have, in a sense, with the shortage of workers in large measure the result of the good times for many manufacturers. The Purchase Managers Index from the Institute for Supply Management came in again strongly for August, in numbers just released by ISM, at a level of a robust 61.3 , well over the 50 mark that separates manufacturing expansion from contraction.

It also marketed the 24 consecutive month of US manufacturing expansion.

A recent NAM survey, 95% of manufacturers felt optimistic about the future and about job growth, a record high.

But the fact that the labor shortage is partially the result of prosperous times for manufacturers doesn't make the problem any less of a burning issue. Most manufacturer simply can't find enough workers to fill their shop floor positions.

And it is likely to get worse.

"This manufacturing workforce crisis will only continue to worsen as we move into the next decade," Lee writes. "Right now, manufacturers in the United States have nearly 500,000 open positions, and the workforce crisis is only projected to deteriorate with the industry having to fill millions of open jobs in the coming years," in part due to an expected wave of retirements

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But highlighting the problem is the easy part. How to address it is another matter.

Lee says the Manufacturing Institute is championing several initiatives it expects to make a difference.

A key issue, Lee says, is "one of manufacturing's most difficult challenges - its perception problem; the idea that manufacturing is more like the industry your grandparents might remember than the high-tech, 21st-century, well-paying sector it is today."

She says key to changing perceptions showing the manufacturing workers of tomorrow what the modern manufacturing industry actually looks like.

That is the driving idea behind the upcoming national Manufacturing Day on October 5. That day, and then also throughout the month of October, thousands of factories, technical schools and business associations across the United States will open their doors for tours by parents, teachers and students.

Part of the message will be that today's high-skilled manufacturing careers usually pay more than an average American job, offer a safe and stimulating work environment and promise career-long job security. Most often, they don't even require a college degree or the associated college debt, Lee also notes.

Lee also says that NAM has programs to support women already in manufacturing and those looking to join them, along with a program for veterans called Heroes MAKE America that connects transitioning service members with manufacturing career opportunities and gives them the granular training and certifications needed for those jobs.

Will all that be enough to turn the tide in terms of the shortage of manufacturing workers? Seems to SCDigest that higher wages must also be part of the solution.

According to the Bureau of Labor Statistics, the average hourly wage (including benefits) for shop floor manufacturing workers was about $21.44 in July, up from $20.88 in 2017, or about 2.2% growth year over year.

That's also up from the $17.75 or so per hour in July 2008, or a rise of 20.8% over 10 years. That's a cumulative growth rate of 1.91%. So wages have risen modestly, about equal with inflation, and thus not enough to improve a worker's lifestyle, especially while healthcare costs take more and more of the paycheck.

Is there a crisis shortage of US manufacturing workers? Is it perception - or wages?
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