The 2020 Mid-Year Economic Update_long

Workforce Development Could Make or Break Future of Manufacturing in U.S.

Report: As much as 40% of U.S. manufacturing could stay or go elsewhere based on policy decisions.

U.S. factories produce about 75 percent of what the country consumes, but the right decisions by both businesses and political leaders could push that to 95 percent, according to researchers at the University of Michigan.

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Wally Hopp and Roman Kapuscinski, co-authors of "Manufacturing's Wake-Up Call," say as much as 40 percent of U.S. manufacturing hangs in the balance and could either stay in this country or go elsewhere in coming years based on policy decisions.

Factors that employers have little influence over, such as the U.S. tax code, the regulatory environment and the country’s relationship with Mexico, will all help determine whether manufacturing continues to rebound or spirals into permanent decline. Worker training and education policy, though, may be even more important according to Hopp.

Related from MDM: A Demographic Shift in Distribution

"If you talk about manufacturing long enough, all roads eventually lead to education," Hopp  says. "A huge determinant of how many manufacturing jobs remain in the U.S. will be our ability to create a skilled workforce."

According to the study, finding technically trained production workers, such as machine operators and maintenance specialists, is an issue that looms particularly large.  This may be due in part to the automation of many manufacturing processes (see Automation, not Outsourcing, Biggest Drain on Manufacturing Employment). While low-skill level jobs are increasingly being done by machines, companies have an even greater need for the high-skill workers that can program, run and maintain them.

The solution? "To remain globally competitive for manufacturing, U.S. education at all levels must be improved in four fundamental ways," Hopp and Kapuscinski write.

  1. The amount of "relevant instruction" available, including a "revitalization of the industrial arts" such as shop classes and other vocational training must be increased.
  2. "Schools must improve the quality of their execution," simply offering the classes is not enough. The classes have to provide training in the skills needed today.
  3. Students need to informed about the "continually evolving career paths in manufacturing." In a survey last fall, only 39 percent of respondents between the ages of 18 and 24 saw manufacturing as an "interesting and rewarding career."
  4. Access to the right programs needs to be improved, including consideration of subsidizing tuition for technical training programs.
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