The State Of American Manufacturing

The death of American manufacturing has been greatly exaggerated.

The Bureau of Labor Statistics posted the most recent job numbers on November 3. There were some surprise numbers for the manufacturing industry.

Almost all regions of the country showed increased momentum in the industrial sector. Factories added 74,000 workers in October, or the most in four years. And manufacturing payrolls approached $12.5 million, which is the highest since January 2009.

“New business received by manufacturers increased solidly,” financial services company IHS Markit said in a statement. “Demand from foreign clients was also substantial, reflected in the quickest rise in export orders since August 2016.”

Cautious Optimism

Robotics and automation are increasingly in use in the American manufacturing industry
An industrial robot for handling flat glass in a facility in Grenzebach, Germany. Image source: commons.wikimedia.org.

Despite the good news, caution is still warranted. Because many economic analysts predict that the future of manufacturing in the United States lies in highly-skilled labor, as well as in automation.

Journalists have widely reported how many jobs have gone overseas to lower-wage workers. But despite this, American manufacturers have actually added nearly one million jobs in the past seven years.

But there’s a problem. Nearly 390,000 of those jobs are still open. So what’s going on?

The answer is that more factory jobs demand education, technical know-how, or specialized skills than they did in years past.

Instead of lower-wage jobs like picking and packing, businesses increasingly need workers to operate and troubleshoot computer-directed machinery. This includes robots as well as complex websites.


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Senator Rob Portman, a former U.S. trade representative, said in an interview: “We’re not going to see the kind of manufacturing renaissance that we all want in this country unless we focus on skills training.”

Modernizing The Workforce

One solution to this manufacturing skills gap is apprenticeships.

Stihl offers an apprenticeship program at its Virginia Beach, VA plant. The program teaches workers electrical engineering, mechanical engineering, and computer skills.

American manufacturing is changing due to increased demand for highly-skilled workers
CEO Sundar Pichai says Google has made $1 billion in philanthropic pledges to help workers develop the skills they need for jobs in the new economy. Image sources: USA Today and Google.

Google is also trying to narrow the skills gap. In October, the company announced that it will invest $1 billion over the next five years in non-profits that help workers gain new tech skills.

“The nature of work is fundamentally changing. And that is shifting the link between education, training and opportunity,” said Google CEO Sundar Pichai. “One-third of jobs in 2020 will require skills that aren’t common today. It’s a big problem.”

Google officials have handed out $100 million of the grant money in the last few months. They’ve directed the funds at programs that further education, economic opportunity, and inclusion.

The growing skills gap is a problem that won’t go away any time soon. However, studies show that Americans prefer to buy products made in the USA. As long as that demand remains high, enterprising manufacturers will have an incentive to keep their facilities in the U.S. rather than moving them overseas.

 

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Sources: Industry Week, Tech Crunch, Dallas News, USA Today, Wikimedia Commons