I recently caught a segment of “60 Minutes” titled “3 Million Open Jobs.” It covered U.S. manufacturing, primarily in Nevada, where the unemployment rate in October was 11.5 percent—the highest in the nation. Ironically, this state had the fastest growing job market in the country just 5 years earlier.
With more than 20 million people unemployed or underemployed in the U.S., there are still more than 3 million job openings, with an estimated 500,000 available in manufacturing. With so many people out of work, why aren’t these jobs being filled? It’s called the “skills gap.”
The TV program showed how difficult it is for companies in Nevada to find good people to fill open positions, especially entry-level ones. Ryan Costella, head of strategic initiatives for Click Bond Inc., Carson City, Nev., a manufacturer of bonded fasteners, defined good people as showing up on time and being able to read, write, do math and solve problems. I noticed he didn’t indicate they must have machine shop experience or know how to machine exotic materials.
Costella noted that when it expanded production, Click Bond bought some machines from a manufacturer in Watertown, Conn. Eventually, Click Bond purchased that part manufacturer’s factory in Connecticut just to get the qualified people needed to run those machines in Connecticut—unbelievable!
As part of a solution to the skills gap, Costella and others convinced community colleges in Nevada to design a training program and enroll unemployed people in it. This program is similar to ones at traditional vocational-technical schools but is only 16 weeks long. The training is free and participants still collected unemployment. They train on controls and machines found in today’s shops, as well as how to use computers, read blueprints and perform trigonometry.
After completing the program, some were able to secure positions starting at $12 an hour, knowing that in the next few years, as their skills increased, they could exceed $60,000 per year with overtime. By the way, the training program cost $60,000 to prepare 20 students, or $3,000 per student.
“60 Minutes” also interviewed Klaus Kleinfeld, president and CEO of Alcoa Inc., about the skills gap. The interviewer suggested the lack of skilled labor was because manufacturing did not pay well. Kleinfeld disagreed.
Someone who did agree with the interviewer was Peter Cappelli, a management professor from The Wharton School at the University of Pennsylvania. He explained, in essence, that if you don’t pay more, don’t expect to get better people. Based on the law of supply and demand, a shortage of workers should lead to rising wages.
From my point of view, the industry already provides good wages. I know of hundreds—if not thousands—of industry professionals who make a decent wage, buy homes and vehicles, put their kids through school and live quite well, thank you. If they didn’t make enough, the choice would be simple: find a shop that paid better.
Cappelli also suggested that companies today do not expect to have to train new hires, but noted they provided training a generation ago. I disagree with this view as well. Employers do train their new hires, albeit some better than others. I’ve been in the business more than 35 years, and companies back then had training programs similar to the ones used now. Training will always be part of running a manufacturing operation, whether it is on the job or in a classroom, like the training program Costella helped set up. Finding the people to train, however, remains a big challenge. CTE
About the Author: Mike Deren is a manufacturing engineer/project manager and a regular CTE contributor. He can be e-mailed at mderen1@wi.rr.com.
Author
Michael Deren is a manufacturing engineer/project manager and a regular CTE contributor. He can be reached via e-mail at mderen1@wi.rr.com.
