Until now, the challenge to the U.S. economy posed by globalization largely has focused on the lower wages and environmental standards in the developing world. We cannot compete on price, so the story goes. Throw in punitive tariff rules on many goods and it looks like our domestic economy is doomed to continue losing the fight.
But a joint report issued last month by the National Manufacturers Association, the Manufacturing Institute and Deloitte Consulting joins the growing chorus of voices in finding fault with the quality of the American work force.
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According to the report, more than 80 percent of the 800 manufacturers surveyed nationwide reported a lack of trained employees, with 83 percent indicating that these shortages are affecting their ability to serve customers.
In addition, nearly half of the respondents indicated their current work force has inadequate basic employability skills, 46 percent have shortfalls in problem-solving skills and 36 percent display insufficient communication skills.
Joseph Cannon, president of CAS America, a manufacturer of box furniture in East Greenwich, said the transformation of the American manufacturing economy from smokestack industries to modern, high-tech production and clean, safe and well-paying jobs demands a work force that is highly skilled. But, the success of the modern manufacturing enterprise is not guaranteed.
“The future is bright if companies are willing to invest in people, technology and are committed to being innovative,” he said.
Cannon believes the government could offer incentives or tax reductions to entice manufacturers to make more of a commitment to finding and training employees. But it is an uphill battle.
According to the U.S. Bureau of Labor and Training, the number of employees in the manufacturing industry peaked at nearly 17.6 million in 1998. Last year, the bureau reported about 14.3 million manufacturing workers.
Locally, statistics from the R.I. Department of Labor and Training showed the manufacturing industry in Rhode Island lost nearly 44,000 jobs in the last 15 years.
John Grady, executive director of the Rhode Island Manufacturers Association, said one major bargaining chip in changing the image of manufacturing – and in attracting investment and employees – is the fact that starting pay averages 25 percent to 30 percent more than other industries.
RIMA’s TrainRI program is already in the game, training existing employees in computer skills, leadership development and high-tech manufacturing principles. The program trained nearly 2,400 employees in the last two years. But more entry-level workers are needed to fill positions, he said.
In New England, the higher cost of living – specifically the price of housing – makes it a difficult area to live and train for a job, said Grady.
Programs in elementary and middle schools about careers in manufacturing also would help change the image and stigma of the industry, said Cannon.
Jerry Jasinowski, president of the Manufacturing Institute, the research arm of the National Manufacturers Association and based in Washington, D.C., said in the report that employers indicated that a high-level work force is the most important factor in future business success.
“The human capital performance gap threatens America’s ability to compete in today’s fast-paced and increasingly demanding global economy,” he said.
