It’s Complicated

The Wall Street Journal reported yesterday that while manufacturing has experienced some modest job growth lately, manufacturers are struggling to fill their open jobs. The story notes that the number of open manufacturing jobs has steadily risen since 2009, and that openings in manufacturing are at their highest level in 15 years.

I’m always a little suspicious, though, when anyone starts the ticker in 2009, which was when we were in the middle of one the worst recessions in history. Pretty much everything looks better if you start in 2009. It’s worth pulling the data from further back in time to get a better a better perspective on this recent growth:

Job Openings - Manufacturing, as of June 2016

Total U.S. Job Openings, Manufacturing, Dec. 2000 – Jun. 2016 (In thousands, seasonally adjusted). Source: Bureau of Labor Statistics

Here you can see that, yes, manufacturing job openings have rebounded since 2009, although they really had nowhere to go but up. In fact, they’ve climbed back to just about where they were in 2006. (We hit a high of 396,000 openings in April of that year, and there were 397,00 openings in April of this year.) So actually they are possibly at their highest levels in ten years, not fifteen.

But equally important is just how many more openings there were 15 years ago, if that’s what you count as your high-water mark (the BLS data only goes back as far as December of 2000). In January of 2001, there were an estimated 496,000 open jobs in manufacturing—100,000 more than there are today.

The second thing that I think is worth pointing out is that while job openings in manufacturing have been on the rise recently, employment in manufacturing has been on the decline for decades, and I don’t think anyone sees it coming back to where it was a few decades ago. Here’s another chart from the BLS showing the number of people employed in the manufacturing sectors since 1979:

Manufacturing Employment Trends

All Employees, Manufacturing, Dec. 2000 – Jun. 2016. (In thousands, seasonally adjusted). Source: Bureau of Labor Statistics

In this instance, the BLS data goes back to the 1930s, but I started at 1979 because this is the high-water mark for manufacturing employment in this country. (And remember, there were fewer people in the labor force back then, and, well, fewer people, period, so the percentage of people working in the sector was much higher than today.) But you can see that manufacturing jobs started rapidly disappearing in the 2000s, and really cratered during the Great Recession. So the sector has come back a little bit, but it’s nowhere near where it once was.

Executives told the Journal that the reason that jobs are going unfilled is because they can’t find workers with the skills to run the advanced machinery these companies have invested in. (The machinery that in many cases allowed them to lay off all of their lower-skilled workers to begin with.) But let’s say that  we did give all those lower skilled factory workers who got laid off over the last 15 years the skills employers say they need—I think it’s unlikely, looking at the chart above, that the sector is would produce enough new jobs in the foreseeable future to hire them all back again.

(Let’s table, for the purposes of this discussion, the argument as to whether, in certain cases, employers have a moral responsibility to do more than just hang up a “Help Wanted” sign and hope for the best in those communities that were hit hard when all that advanced machinery enabled them to cut a bunch of jobs. Some might argue that these employers ought to stop complaining and invest in what is needed to skill up those folks for these new openings. I’ll let you make up your own minds about that.)

It’s also worth noting—again—that there are those who study this stuff who argue that the skills gap in manufacturing  is overblown. I’m reminded also, of this paper, published a few years ago by the Federal Reserve Bank of Boston, which found that as a result of the Great Recession and the high unemployment rate that followed, employers simply got used to being able to hire workers with relatively high skills at a fairly low wage, a trend the study authors called “opportunistic upskilling.” Once the labor market tightened up again, hiring and retaining a workforce of higher-skilled people across the board was clearly going to be more challenging. They expected employers to adjust, by either lowering their skill requirements for some of these jobs or by raising wages. Those unwilling to do so would find that the average time to fill a position would grow longer. I have no idea if that is what’s going on at some of the companies highlighted in this article—but it could be!

The point of all of this is—it’s complicated. I don’t have any doubt that many manufacturing jobs require more advanced skills than they did a decade or two ago, but a reluctance by employers to raise wages, or to look at lowering the skill requirement for some jobs (and/or investing in more training on the job) may also be factors.

Why do I care about this? Well, because from a workforce training/adult education perspective, I want know with as much precision as I can what the actual employment trends are in order to figure out what the actual need for training really is, and whether there are other things we need to look at in order to get people into (or back into) a job.

Manufacturing Job Growth: Nothing to Get Excited About

A month or two ago I was talking to some people who work in the community college/workforce development field, and they were rather insistent that U.S. manufacturing jobs were roaring back. I still don’t know what they are talking about. As Jared Bernstein notes in this post about today’s jobs report, manufacturing accounts for about 9% of total employment in this country, and less than 4% of our job growth over the past year. While obviously some new jobs are being created at some companies in some parts of the country, it’s actually the only industry in this slowly recovering economy that, on the whole, appears not to be growing.

What Makes a Jobs Bill a Jobs Bill?

From an article in The Hill this past Wednesday:

Democrats have said Republicans for the last two years have failed to bring up any major jobs bills, which they generally define as bills that increase spending to fund construction projects.

In contrast, Republicans have said the House has passed dozens of jobs bills, which they generally define as bills that remove federal regulation to make it easier for companies to do business and expand. (my emphasis)

Educating and Training for Adults Largely Ignored in 2013 State of the Union Address

Last night I was reviewing the President’s 2013 State of the Union address alongside my my notes on last year’s address. The thing I remember most strongly about last year’s speech was the President’s reference to a “maze of confusing training programs” which, at the time, (tweeting on behalf of D.C. LEARNs), I thought might be interpreted as a vague endorsement of the proposal then being floated by House Republicans to consolidate Workforce Investment Act (WIA) job training programs:

2012 SOTU Tweet

Sure enough, when House Republicans released their WIA reauthorization bill last spring, (H.R. 4297, the Workforce Investment Improvement Act of 2012), they used this quote in their fact sheet. In retrospect, I think the quote was taken entirely out of context (it seems clear when you read the President’s entire speech that he was talking about consolidating information about federal job training programs, not the programs themselves) but the House Committee on Education and the Workforce used the President’s words time and time again throughout the spring to support their arguments.

But hey, at least the President talked about job training and adult skills last year. Jobs were, in fact, explicitly linked to a proposal to support more job training. The President said that he had been hearing from business leaders “who want to hire in the United States but can’t find workers with the right skills.”  He then issued this call to action:

Join me in a national commitment to train 2 million Americans with skills that will lead directly to a job. My administration has already lined up more companies that want to help.  Model partnerships between businesses like Siemens and community colleges in places like Charlotte, and Orlando, and Louisville are up and running.  Now you need to give more community colleges the resources they need to become community career centers -– places that teach people skills that businesses are looking for right now, from data management to high-tech manufacturing. (my emphasis)

And I want to cut through the maze of confusing training programs, so that from now on, people like Jackie have one program, one website, and one place to go for all the information and help that they need.  It is time to turn our unemployment system into a reemployment system that puts people to work.

But on Tuesday night the President barely mentioned adult skills. And when he did, it was to introduce other education proposals:

These initiatives in manufacturing, energy, infrastructure, and housing will help entrepreneurs and small business owners expand and create new jobs. But none of it will matter unless we also equip our citizens with the skills and training to fill those jobs. And that has to start at the earliest possible age.

Study after study shows that the sooner a child begins learning, the better he or she does down the road. But today, fewer than 3 in 10 four year-olds are enrolled in a high-quality preschool program. Most middle-class parents can’t afford a few hundred bucks a week for private preschool. And for poor kids who need help the most, this lack of access to preschool education can shadow them for the rest of their lives.

Tonight, I propose working with states to make high-quality preschool available to every child in America. Every dollar we invest in high-quality early education can save more than seven dollars later on – by boosting graduation rates, reducing teen pregnancy, even reducing violent crime. In states that make it a priority to educate our youngest children, like Georgia or Oklahoma, studies show students grow up more likely to read and do math at grade level, graduate high school, hold a job, and form more stable families of their own. So let’s do what works, and make sure none of our children start the race of life already behind. Let’s give our kids that chance.

Let’s also make sure that a high school diploma puts our kids on a path to a good job. Right now, countries like Germany focus on graduating their high school students with the equivalent of a technical degree from one of our community colleges, so that they’re ready for a job. At schools like P-Tech in Brooklyn, a collaboration between New York Public Schools, the City University of New York, and IBM, students will graduate with a high school diploma and an associate degree in computers or engineering.

In 2012, preparing Americans for unfilled jobs required job training and community colleges and partnerships with businesses to retrain workers for new jobs. Last night, by contrast, when the President said that we must “equip our citizens with the skills and training to fill [new] jobs,” he immediately pivoted to his preschool proposal, and retraining adults is never mentioned. He then goes on to discuss the need to ensure that high school diplomas “puts our kids on a path to a good job.”

In other words, in 2012, preparing citizens for new jobs was linked to job training for adults; this year, it was linked to preschool and high school education. Adult training or re-training was never actually discussed at all. (It was only mentioned again as a segue into his discussion of immigration reform.)

No one I know in the field of adult education or job training is opposed to the idea of improving high school education or improving access to high-quality pre-school, (although, if we are serious about preparing kids for success in school, our strategy should include efforts to improve the skills of parents/caregivers), but I’ve never understood how improving preschool education is going to help us fill the jobs that are available now.

And it can’t help but make one wonder about the adminstrations’s engagement/commitment to WIA reauthorization. Perhaps after House Republicans appropriated his remarks on job training last year, he decided it was best not to get into the subject again last night. Or maybe it’s just a case of not having the time to hit on every priority, and/or wanting to keep the speech fresh. Hopefully it’s not a sign that adult education and training has slipped a further down the administration’s list of priorities.