The return of manufacturing. But...

The return of manufacturing. But...

Dear Colleagues,

In a recent post, I shared with you reports of a resurgence in U.S. manufacturing. The return of manufacturing jobs, referred to as “in-shoring” or “on-shoring,” has been celebrated in the press and in the political sphere and has led to new and expanded education programs across the country.

A recent article from CNN highlights this trend:

Trade schools nationwide are bursting at the seams as demand for skilled factory workers pushes enrollment to record highs. American manufacturers in certain sectors are enjoying a rebirth fueled by the return of overseas production back to the United States. As factories crank up, they have an urgent need for high-skilled workers such as machinists and tool-and-die makers knowledgeable in computers.

This good news is tempered by other labor market analyses suggesting that job growth in manufacturing amounts to far less than the jobs that were lost in the 80s and 90s. Further, manufacturing jobs may be coming back not only as higher skilled, but also perhaps lower paid. This Atlantic article offers an extensive analysis of changes in the new manufacturing:

The average wages of production and non-supervisory employees in manufacturing are lower than they were in 1985, when adjusted for inflation. In September, those employees made an average $8.63 an hour, in 1982 to 1984 dollars, while they made an average of $8.80 an hour in 1985, according to the Bureau of Labor Statistics.

These trends in manufacturing may be contributing to the overall decline in labor force participation rates over the past decade documented by economists Erik Brynjolfsson and Andrew McAfee from MIT in their recent book, The Second Machine Age. This decline seems to be affecting men more than women, as a Georgetown Center on Education and the Workforce analysis of 2000-2012 CPS data showed. CEW found a substantial drop in the percentage of 21- to 25-year-old and 26- to 30-year-old men engaged in the labor market.

Brynjolfsson and McAfee’s analysis also showed that median income has stagnated. Between 1973 and 2011, the median hourly wage in the U.S. barely changed, growing by just 0.1 percent per year. And for the first time since the Great Depression, in 2012, over half the total income in the United States went to the top 10 percent of Americans.

The  labor market is changing rapidly and in ways difficult to predict. This fact makes planning career pathways more than challenging. For example, a recent report, Strengthening Skills Training and Career Pathways across the Transportation Industry, estimated a need for two million new truck drivers by 2022 arguing for creating career pathways to address this need.  Truck driving is one occupation singled out by Brynjolfsson and McAffee as a job ripe for automation and which is the "number one occupation for U.S. males," employing more than three million people. This point is underscored in a ZDNet article on automation in the workplace. Truck driving is not an occupation resistant to automation, the article’s authors argue, because it does not rely on emotional understanding or complex physical tasks. The challenge for schools, colleges, and other providers of career training is that skills useful in the past and even the present economy may be mismatched with skills needed in the future.

All of these issues create challenges for building career pathways that connect youth to a prosperous future.

As always, I enjoy hearing from you and would appreciate your thoughts on the task (and economy) ahead of us. Happy thanksgiving!

Best,