Improvement in the manufacturing sector has been one of the emerging and rare bright spots in the struggling U.S. economy as it continues a recovery that has built new fortunes on Wall Street even if it hasn’t done much to get the foreclosed homes sold off of Main Street. Data recently released by the Federal Reserve reports that the long embattled sector is outpacing the rest of the economy by 3-to-1 in job creation. U.S. manufacturing, for the first time in decades, has emerged as the strongest actor in the overall economy.
This would be better news if part of the reason for the manufacturing boom were not the declining wages of manufacturing workers, making them more competitive with workers in China and other low-wage Asian manufacturing hot spots, and a good bit of the other part was the continued weakness of the U.S. greenback. Still any positive news out of this long-beaten down sector of the U.S. economy is welcome—manufacturing employment has declined steadily over decades to about 8 percent of the U.S. workforce.
Analysts report that the United States may be on the verge of a manufacturing renaissance, as the U.S. may now be the most cost-effective production site in the developed world. The U.S. manufacturing sector overall, after shrinking by six million positions between 1997 and 2009, has added 240,000 workers since the beginning of 2010. Time magazine reports that in the first quarter of 2011, U.S. manufacturing output grew by 9 percent, five times as fast as the overall economy. The news is not all good.
Manufacturers are reporting that as the mini-boom in the sector continues they are having trouble finding qualified workers to fill the thousands of positions that are opening. After decades of deindustrialization, the old skills have not been passed on and young workers not primed to learn the new ones. An education system that continues to produce mismatches between what the economy wants in terms of job skill-sets and what students actually study contributes to the problem.
Another gray cloud preventing the more rapid filling of new or reopened positions is the reluctance of employers to hire on the unemployed. That’s right. Not having a job is one of the main reasons the unemployed have trouble, well, finding a job. Employers feel that those out of work too long have eroded or outdated skills and poor attitudes. Overcoming that prejudice would do much to move the economy through its continuing hard times. But if the improved performance of manufacturing is to be encouraged into a long-term trend rather than a happily fortunate statistically blip, the structure and intentions of secondary education need to be reevaluated—and quickly.
Seems these days that most U.S. high school students are on a path to college or to dropping out. Looking at how other developed countries, Germany, for instance, excel in preparing their young people for meaningful and good-paying careers in manufacturing work and other lifelong skill-building that doesn’t necessarily include college, would seem to be imperative if we want to get more Americans back to work.
For a contrarian perspective, visit “The manufacturing rebound is a myth.”
