Skilled Labor Shortage in the Manufacturing Industry

The Federal Reserve released its most recent Beige Book on June 5, 2019, which summarizes current economic conditions, including challenges, opportunities and trends of the 12 Federal Reserve Districts. A common theme noted in the publication was tight labor markets and shortages of skilled laborers with a rising demand for such workers. This is not news to most manufacturing companies, as recruiting and hiring skilled laborers has been an obstacle for several years.

There are two main causes of this shortage. First, a significant number of laborers who belong to the baby boomer generation are reaching retirement age. Second, there has been difficulty in getting the younger generation interested in jobs within the manufacturing industry.  The aging workforce combined with the trouble of attracting younger workers has presented a difficult situation for most manufacturing companies.

Several solutions to the labor shortage have been presented and implemented throughout the country in the form of apprenticeships and work-based learning programs.  The goal of these programs is to attract younger workers to the engineering and technical aspects of the industry. Currently in the United States, the top four industries for apprenticeships are construction, military, public administration and manufacturing. Manufacturing apprenticeships are typically focused on production and machine workers as well as engineers. These apprenticeships provide specialized training and application-based learning, which in turn produces competent, efficient and effective workers.  Apprentices typically command higher wages, but can create cost savings in the long run.

Another solution is work-based learning programs, which focus on educating high school students on the opportunities within the skilled trades industries. Throughout the country, companies have teamed up with educators to introduce students to the inner workings of the manufacturing industry, including the various jobs available and the skills needed to adequately perform them. Without these programs, it is unlikely that high school students would be aware of these opportunities.

As the industry progresses and grows, companies are also faced with decisions to invest in technology and automation rather than their workforce. However, for the foreseeable future, skilled laborers are still needed. Perhaps investment in the programs mentioned above could be the solution to the labor shortage and the key to creating an effective and efficient workforce.

For further information on manufacturing apprenticeships, see:

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