Lack of skilled labor threatens manufacturing
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During the 2016 primary election, several presidential candidates repeatedly lamented the loss of American manufacturing jobs. Bernie SandersBernie SandersParliamentarian deals setback to GOP repeal bill OPINION | Hey Dems, Russia won't define 2018, so why not fix your party's problems instead? OPINION | They told us to abandon ObamaCare — then came the resistance MORE and Donald TrumpDonald TrumpObama intel chief wonders if Trump is trying to make 'Russia great again' Trump Jr., Manafort reach deal to avoid public hearing next week House Intel panel to interview Kushner amid Russia probe MORE built their populist economic platforms around the issue, soon followed by other candidates and members of Congress. None of the rhetoric explains manufacturing as an industry or the entire economy.

Over the last 20 years, low-skilled manufacturing jobs have vanished from the U.S. while high skilled jobs flourish. The central political narrative is that jobs are primarily lost to overseas competitors.

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While this may be anecdotally true, low-skilled manufacturing jobs disappeared primarily as the result of automation — which, ironically, is produced by US manufacturers. Offshoring only happened as a result of automating low-skilled operations.

I work in manufacturing (specifically metal machining) and my experience has given me much needed perspective on the issue. Most people do not realize that manufacturing is a cannibalizing industry in terms of employment.

For example, Ethicon contracted an American engineering firm to design and build equipment that automates the production of surgical suture packets. Prior to this equipment, American labor manually assembled each suture packet, completing one about every three to five minutes.

American manufacturers produced enough machines to outfit Ethicon’s facility in Puerto Rico. Now, surgical suture assemblies are built at a rate of one per minute — a threefold improvement.

In other words, an American manufacturer was contracted by an American corporation to produce equipment that would send American jobs overseas. Once automated, production no longer requires the same skill and high wages, thus it is sent where lower wage labor simply monitors the equipment and refills materials.

Manufacturing has cannibalized its own employment for a very long time. This is one example of many industries where automation permanently replaced jobs and moved production overseas. In my industry, manually operated mills and lathes have long been replaced by state-of-the-art CNC equipment where one person operates multiple machines.

No matter your political convictions, there’s no reasonable economic argument that our economy would be “better off” in a scenario where these automations did not occur. Your surgical sutures are now less expensive and we can produce complex parts for cutting edge applications that are the backbone of modern technology.

Our economy is not a fixed pie; it grows, changes, and creates wealth in new areas. The oft-cited statistic is that we have lost more than five million manufacturing jobs from 2000 to 2015. Although true, it misses a crucial piece of information: during that time, the United States economy had a positive net increase of three million jobs. We lost five million jobs, but created eight million.

In fact, 5.3 million of those new jobs were created in healthcare and professional business services — industries with average wages higher than average manufacturing wages. Growth industries create jobs that pay well, and we have seen this growth over the long run.

Job losses are an unfortunate part of economic growth and restructuring. What’s important, however, is that we create jobs elsewhere in our economy. By all measures, our economy created more than enough well-paying jobs to offset these losses.

A more troublesome fact is the lack of skilled labor in the manufacturing workforce. Personally, I can tell you that it is very difficult to find skilled CNC machinists that are young and motivated. I suspect the reason is because an entire generation was herded into colleges to earn subsidized low-value, high-cost degrees without the consideration of trade.

As the National Association of Manufacturing found, there are 600,000 unfilled jobs in manufacturing primarily due to a lack of skilled labor. It is this skills mismatch that plagues the US labor market as the leading cause of structural unemployment.

American manufacturing is stronger than ever and will continue to revolutionize the economic playing field. We produce some of the highest-value goods in the world like the Nikon 3D scanner for automotive quality control.

Whatever perceived economic ills are largely misdiagnosed by politicians who claim they can “create” growth in industries that are already growing.

Grant Phillips is a Young Voices Advocate. He is a member of Unbiased America and panelist on UA Live. Follow him @mod_libertarian.


 

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