Wanted: Blue-Collar Workers. Who will power America’s new industrial revolution?
To many, America’s industrial heartland may look like a place mired in the economic past—a place that, outcompeted by manufacturing countries around the world, has too little work to offer its residents. But things look very different to Karen Wright, the CEO of Ariel Corporation in Mount Vernon, Ohio. Wright’s biggest problem isn’t a lack of work; it’s a lack of skilled workers. “We have a very skilled workforce, but they are getting older,” says Wright, who employs 1,200 people at three Ohio factories. “I don’t know where we are going to find replacements.”
That may sound odd, given that the region has suffered from unemployment for a generation and is just emerging from the worst recession in decades. Yet across the heartland, even in high-unemployment areas, one hears the same concern: a shortage of skilled workers capable of running increasingly sophisticated, globally competitive factories. That shortage is surely a problem for manufacturers like Wright. But it also represents an opportunity, should Americans be wise enough to embrace it, to reduce the nation’s stubbornly high unemployment rate.
Driving the skilled-labor shortage is a remarkable resurgence in American manufacturing. Since 2009, the number of job openings in manufacturing has been rising, with average annual earnings of $73,000, well above the average earnings in education, health services, and many other fields, according to Bureau of Labor Statistics data. Production has been on the upswing for over 20 months, thanks to productivity improvements, the growth of export markets (especially China and Brazil), and the lower dollar, which makes American goods cheaper for foreign customers. Also, as wages have risen in developing countries, notably China, the production of goods for export to the United States has become less profitable, creating an opening for American firms. The American Chamber of Commerce in Beijing expects China’s “low-wage advantage” to be all but gone within five years.
It’s also true that American industry hasn’t faded as much as you might think. Though industrial employment has certainly plummeted over the long term, economist Mark Perry notes that the U.S. share of the world’s manufacturing output, as measured in dollars, has remained fairly stable over the last 20 years, at about one-fifth. Indeed, U.S. factories produce twice what they did back in the 1970s, though productivity improvements mean that they do it with fewer employees. Recent export growth has particularly helped companies producing capital equipment, such as John Deere and Caterpillar, and many industrial firms are even hiring more people for their plants, especially in the Midwest, the Southeast, and Texas.