Industries brace for skilled-labor shortage

By JONATHAN WEGNER
Omaha World-Herald
February 17, 2005

There may not be enough Gary Joneses in America.

Growing up in Papillion, Jones played with a model train set but was more moved by the circuits than the circular motion.

"I was always wiring it," he said.

Jones, now studying electrical mechanical maintenance at Metropolitan Community College, didn't know he was practicing for a profession.

And his timing could not have been better. Manufacturers, especially those in the rural Midwest, say they are on the verge of an acute skilled labor shortage brought on by the looming retirement of the baby boomers.

The unfolding demographic trends have industry groups like the National Association of Manufacturers fretting about whether they'll be able to find enough young employees in places like Omaha.

Manufacturers say they face a twofold problem in attracting young people to skilled trades: outmoded stereotypes of Henry Ford-style assembly lines; and the widely held belief that four-year degrees are prerequisites for success.

The association has launched a $2.5 million pilot campaign in concert with Kansas City, Mo., manufacturers to promote manufacturing jobs to young people there. Similar programs are in the works for Houston and other cities, including Omaha. A coalition of Nebraska industrialists and educators has said it plans to begin developing a program in concert with the National Association of Manufacturers within the next two months.

Jones hopes such a program helps students like him improve skills necessary to pursue technical careers right out of high school. He believes his high school overemphasized college preparatory courses instead of practical skills training.

"They really pushed you to go for a four-year (degree)."

Phyllis Eisen, vice president of the Manufacturing Institute in Washington, D.C., said today's modest labor shortages, if left unchecked, could spread throughout industry and ultimately hurt American competitiveness.

Monthly Mid-America Business Conditions Index surveys show that some Nebraska and Iowa businesses already are struggling to find enough welders, machinists and die-cast workers.

The problem could become especially acute in Midwestern states and rural areas, where emigration of young workers threatens some communities' sustainability, said Ernie Goss, an economist at Creighton University who conducts the monthly surveys.

"People have a short memory. In 1999 and 2000, we were talking significant labor shortages all across rural and urban areas," Goss said.

With the resurgence of the economy, the problems that became common five years ago will resurface, and worker shortages could worsen as demographic inevitabilities play out, he said.

A National Association of Manufacturers report compiled in conjunction with Deloitte & Touche predicts that manufacturers will need as many as 10 million new skilled workers by 2020. Although those estimates may be excessive - U.S. Bureau of Labor Statistics show that a total of 14.4 million manufacturing jobs exist in the United States - no one disputes that employers must develop a next generation of workers or face pressures to move overseas.

Teachers and parents promote four-year degrees as a ticket to success, but that belief is disconnected from the career trends emerging in today's economy, according to NAM officials.

Goss agrees.

"The evidence clearly shows that Nebraska probably needs fewer four-year degree persons and more highly skilled individuals," he said.

Millions of taxpayer dollars spent to subsidize four-year degrees at Nebraska's state universities probably contribute to the emigration of young people from the state, Goss said. Numerous studies have shown that graduates of four-year colleges are more likely to move because of a job than workers with two-year degrees, he said.

Manufacturers acknowledge that they have done a poor job promoting themselves and have failed to link the notion of a career in manufacturing with the things about which young people feel passionate.

Dwayne Probyn, director of work force development at Metropolitan Community College, said many students don't realize how much creativity and cutting-edge technology is involved in manufacturing jobs.

"Young people don't regard (manufacturing jobs) as a high-profile way to develop a career path," Probyn said.

Manufacturers also have failed to show how they've modernized, embraced new technologies and involved workers in management and product development, said Tom Whalen, a principal at Omaha's Silverstone Group who specializes in human resource development.

"During the last 20 years, management finally got it in this country: To fully utilize the human aspect of the business, you have to engage workers," he said.

This paradigm shift led to dramatic changes in factory conditions, which often still suggest stereotypes of back-breaking labor and grimy working conditions, he said.

"(Young people) think of the kind of manufacturing model of 20, 30, 40 years ago," Whalen said.

The stereotypes include total compensation, Eisen said. The average salary-and-benefit package for manufacturing workers was $62,700 in 2003, according to the Commerce Department. The national average for all jobs was $51,200.

David Huether, a NAM economist, said the disparity is not due to wages, which are only marginally higher in manufacturing. The disparity stems from health benefits, he said, which manufacturers provide more of than any other sector except government.

The National Association of Manufacturers' promotion campaign, known as "Dream it Do it," will advance manufacturing as a way for young people to turn an interest in technology or art into a career, Eisen said.

She plans to meet in April with Omaha business and education leaders as well as representatives of the Chamber of Commerce to begin implementing the campaign here.