NCPA - National Center for Policy Analysis

Addressing the Skills Gap in Manufacturing

February 1, 2013

Reports of a serious shortage of skilled manufacturing workers in the United States have been prevalent throughout the last decade of economic challenges, though the size of the shortage varies. At a time when the economy needs all the help it can get, the perceived gap between employment demand and skilled workers actually derives from a lack of manufacturers' willingness to pay, say Thomas A. Hemphill, an associate professor of strategy, innovation and public policy at the University of Michigan's Flint campus, Waheeda Lillevik, an assistant professor of human resources and management at the College of New Jersey, and Mark Perry, a scholar at the American Enterprise Institute and a professor of economics at the University of Michigan's Flint campus.

  • A 2012 Boston Consulting Group (BCG) report concluded that the existing skills gap is more limited than has been previously reported with only five of the 50 largest manufacturing centers experiencing a shortage of high-skilled workers.
  • The BCG report also found that 102 out of 389 Metropolitan Statistical Areas were facing gaps in job categories like machinists and welders who are typically paid roughly $10 per hour to operate highly sophisticated machines.
  • At only $10 an hour, many potential employees do not deem the necessary training or work rewarding enough to pursue the technical jobs in demand.
  • In total, while BCG estimates the overall skills shortage at between 80,000 and 100,000 manufacturing employees, U.S. manufacturing employment has increased by more than 500,000 positions over the last three years.

Growth in the manufacturing industry was a significant factor in helping America emerge from the Great Recession of 2009 and is expected to drive the continuing recovery.

  • According to a recent survey in a report by consulting firm Deloitte and the Manufacturing Institute, 90 percent of the 1,000 Americans surveyed believe that manufacturing is "important" or "very important" and is more likely to create 1,000 jobs in their community than energy, technology or health care.
  • The Society of Manufacturing Engineers predicts the shortfall to increase to 3 million jobs in 2015 as older workers retire -- the average age of manufacturing workers has risen from 40.5 years in 2000 to 44.1 years in 2011, according to the U.S. Department of Labor.

As the manufacturing workforce ages and the estimations of how big the gap is vary greatly, the authors emphasize the need for proper training to address the shortfall. They state that we need to stop telling children manufacturing jobs are headed overseas, offer more internships and apprenticeships to complement formal skills-related educational programs, and ensure that potential employees are paid competitive wages.

Source: Thomas Hemphill, Waheeda Lillevik and Mark Perry, "Confronting the U.S. Advanced Manufacturing Skills Gap," The American, January 28, 2013.


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