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Manufacturers cant find skilled american workers Original Source Link: (May no longer be active)
http://www.usatoday.com/money/economy/employment/2006-12-05-skilled-workers-shortage_x.htmhttp://www.usatoday.com/money/economy/employment/2006-12-05-skilled-workers-shortage_x.htm
U.S. manufacturers getting desperate for skilled people
Updated 12/5/2006 11:27 AM ET
By Barbara Hagenbaugh, USA TODAY
EMMAUS, Pa. — Michael Bunner has done everything he can think of to hire workers.
He's increased pay, offered training and recently, hired a man straight out of prison.
While his story isn't too surprising given that the unemployment rate of 4.4% is at a 5 ½-year low, what is unexpected is that Bunner is in the manufacturing sector, an industry that has been grabbing headlines for losing jobs.
But despite all those layoffs, Bunner can't find plastic welders or even people who are willing and able to be trained for the specialty job.
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"I'm turning down contracts," says Bunner, president of Electro Chemical Engineering and Manufacturing, which makes chemical tanks. "I could expand 20-30% overnight if I had more people."
Much has been made of the loss of millions of manufacturing jobs in the USA in recent years.
But manufacturers, regardless of size, specialty or location, across the USA are reporting a dire shortage of skilled workers: people such as welders, electricians or machinists with a craft that goes beyond pushing buttons or stacking boxes but does not require a degree.
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That shortage is threatening their ability to meet current demand, let alone expand their businesses. The gap could threaten the viability of the U.S. manufacturing sector at a time when it is facing heavy competition from abroad.
In a survey of 800 manufacturers conducted by the National Association of Manufacturers (NAM) last year, more than 80% said they were experiencing a shortage of skilled workers. In October, manufacturers surveyed by the Federal Reserve Bank of Philadelphia said "finding qualified workers" was their biggest business problem.
The shortage of skilled workers is the result of a number of factors. One of the biggest is that manufacturing in the USA is becoming more high-tech and skill-based as the more repetitive, less-skilled work is moving abroad. Such jobs require greater expertise.
Plus, baby boomers with years of experience are retiring. And younger people are bypassing factory jobs, viewing them as repetitive, dirty and without much opportunity, a view that hasn't been helped by all the factory closings and headlines about manufacturing jobs moving to China.
These factors have combined to create a serious worker shortage with no end in sight.
"I've never seen anything like it in my life," says Bunner, whose father worked in a factory when he was growing up in West Virginia. "When I was a kid, people would stand in line for hours for an opportunity at a job like I have available. I can't get people to show up for an interview."
More specialized work
There were 10.2 million manufacturing production workers in the USA in October, down 19% from 10 years ago and 28% fewer than 40 years ago.
The percentage of all workers in the USA employed in manufacturing has been declining for 50 years. In October, 10% of the U.S. workforce was employed in the manufacturing sector, an all-time low. In 1946, one out of every three workers had jobs in manufacturing.
But the loss of jobs doesn't mean that manufacturing is disappearing from the USA. U.S. manufacturing production last year totaled $1.5 trillion, or 12% of gross domestic product, the broadest measure of economic activity within U.S. borders.
The sector has become more specialized, with a greater focus on technology. With a boom in productivity in manufacturing, firms are able to produce more with fewer workers.
Innovation in the manufacturing sector means that the jobs require greater skills than ever before. According to an analysis by economists Richard Deitz and James Orr at the Federal Reserve Bank of New York, employment in high-skilled manufacturing jobs rose 37%, or by 1.2 million jobs, from 1983 to 2002. At the same time, low-skilled factory jobs dropped 25%, or by approximately 2 million workers.
"The time when you can be relatively unskilled and work in manufacturing for a long time with just a high school degree and make a good salary to support a family is gone," National Association of Manufacturers chief economist David Huether says.
But finding people with the right skills isn't easy.
"It's limiting my growth," says John West, president of Fox Valley Metal-Tech in Green Bay, Wis.
Earlier this year West turned down a $1.5 million contract with Kraft Foods because he didn't have enough welders. That order would have grown his business by 10%.
Multiple job offers
West's firm, which produces metal machinery parts, has increased pay and offers full health benefits, training, a matching 401(k) plan and bonuses to employees who refer people to work there.
"You get a good worker who has that skill set, you make sure they don't want to leave," West says. "You pay them well; you treat them well."
That's good news for Richard Smith. The 29-year-old from Chillicothe, Ohio, is graduating Dec. 15 from a nine-month welding program at the Hobart Institute of Welding Technology. He's received three job offers, paying $16 to $19 an hour, or more than three times the federal minimum wage. The companies are also paying medical benefits, offering 401(k) plans and paying for additional training.
"It really took me off my feet," says Smith, who got interested in welding while he was in the Navy.
Andre Odermatt, president of the Hobart Institute in Troy, Ohio, says job postings at the school have risen 40% in the last year. Companies are increasingly offering sign-on bonuses of as much as $3,000 and are coming from as far away as California and offering to pay relocation for students willing to move, he says.
"It's like having gone through Harvard," he says. "The world is open for them."
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Odermatt and others say they think the shortage of skilled manufacturing workers is largely a function of perception.
"Culturally, we have browbeaten manufacturing to such an extent that we don't have people interested," says John Sinn, interim director of the Center for Applied Technology at Bowling Green State University.
Sinn and others say it is now up to people in manufacturing to change that perception, particularly among younger people and their parents.
"Everyone wants their kids to be doctors, lawyers and dentists. … (But) all of us can't be that," says Lloyd McCaffrey, director of manufacturing technology at Williams International, a gas turbine manufacturer in Ogden, Utah.
McCaffrey's company is investing $30 million in a program at nearby Ogden-Weber Applied Technology College that will bring in students, some of them in high school, for hands-on training in machining.
Representatives at Oklahoma State University-Okmulgee meet with students, some of whom are in middle school, to teach them about manufacturing. The university also recently started a program to help train disadvantaged youths, some of whom are on probation, in manufacturing basics.
"What we're saying is, 'Here is a good option.' … This is a very good career for a lot of people," says Roy Cail, executive director of the economic development and training center at the university.
What concerns Cail and others is that as the workforce ages and the baby boomers retire, the shortage of skilled manufacturing workers could grow more acute.
In 2005, 43% of manufacturing workers were 45 years old or older. That's up from 32% in 1995, according to a NAM analysis of Labor Department data.
"As the labor force ages, there really aren't young kids coming into the trades," says Patrick Duffy, president of American Machine & Gear in Portland, Ore. Duffy recently paid workers triple time to work on Thanksgiving to get an order out.
Special skills in demand
At Electro Chemical Engineering and Manufacturing, workers create tanks that are used to process, store or haul chemicals. The steel tanks are lined with a special plastic that prevents erosion and sometimes contain reactors to make the chemicals. Bunner's clients include major companies in the pharmaceutical, chemical and high-tech industries, such as Dow Chemical, Bayer, DuPont and General Electric.
Building the tanks takes a special skill in plastic welding. Even the tiniest crack can mean a chemical leakage, a potentially dangerous and even deadly situation.
But finding plastic welders, or even people interested in learning the skill, has become next to impossible. Bunner has had three open slots for welders since April. People have come in who can't do simple math — such as calculating square footages, a key skill when 1 square foot of plastic material goes for $250. He's also had people come in who have never used a tape measure or read blueprints.
Not only has Bunner increased pay, he offers a 401(k) with a matching program, health insurance and vacation time. But that still isn't working, so he's had to "go outside the box" to recruit, as he puts it.
When a local company shut down, he set up a booth in its human resources department. He hired two people that way. And he's working with the local rescue mission and prison ministry to try to identify candidates.
Bunner is also trying to bring former employees back. An employee who retired at 65 came back to work when he was 68. Soon, the company will be mailing letters to 13 former employees, asking if they'd be interested in working night or weekend hours.
"The fact that they worked for us and they are still alive, we are contacting them," he says.
Bunner notes with a tinge of irony that his business is just down the street from Allentown, Pa., the town Billy Joel made famous in 1982 with his song Allentown. In it Joel described the area's declining manufacturing base, particularly in the steel sector, saying it was "getting very hard to stay."
Electro Chemical used to serve the steel industry but has since adapted to more high-tech uses in the evolving economy, like many other companies.
"We had to adapt or die," he says.
But unless he finds enough people who can, as he puts it, "work with your hands and work with your head," companies like his are going to struggle to get ahead. He's perplexed why more people aren't going into manufacturing.
"Manufacturing has an ugly aura," he says. But "you can't have everyone sitting in a Dilbert cubicle. … Working with your hands, there's nothing wrong with that."
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