Minnesota’s Economic News — W/E 10/22/21
Labor market Kare 11: Retailers ramp up hiring for the holiday shopping season KEYC: Childcare shortage impacts southern Minnesota families, economy Bemidji Pioneer: Minimum wage set to increase 2.5% as…
The following excerpts are from Chapter Five, “Potential Economic Detours,” in Mitch Pearlstein’s new book, Education Roads Less Traveled: Solving America’s Fixation on Four-Year Degrees. Published by Rowman & Littlefield, it will be released in April. Stay tuned for information about a big book party.
Darlene Miller is owner of Permac Industries, a precision manufacturing business in Burnsville, Minnesota. In an interview touching many bases, she talked about how large proportions of young people who go to college have “no clue” about what they want to do with their lives.
“That makes it easy for guidance counselors who can say, ‘Just go to a four-year college. You’ll find your path. It’ll all work out in the end. Life will be beautiful.’ With manufacturing or any of the trades it’s specific. You’re going to be a machinist. You’re going to be a plumber. You’re going to be a carpenter. But counselors don’t know enough about these avenues to even help direct them.”
In time, I got to another heart of the matter: How is the shortage of sophisticated machinists and other well-trained men and women in trades hurting the economy?
“Regardless of the industry,” Miller said, “we won’t continue to grow. We won’t be able to build enough cars, enough airplanes. But it’s not just manufacturing, it’s also not having anyone fix plumbing in our homes. It’s going to take six months to get someone to do a new roof.”
Hyperbole for effect? Yes. But then there was another business owner, Myron Moser, who we also met earlier, who spoke of a friend, the CFO of a large automotive group, who said she had openings for 77 mechanics, and that if she had them today, she’d hire them today. Moser also talked about the immense amount of money a big bakery—the kind that makes buns for McDonalds—would lose every hour if one of its major pieces of equipment went down and there were too few specifically trained people in the vicinity to fix it quickly. Moser said the loss would be about $100,000 an hour—a number I can’t confirm but which certainly is impressive.
One more exchange with Darlene Miller. She had just talked about how much manufacturing had changed over the previous 25 years:
“When I got into the business, we were making simple components. Many employees got out of their pickup trucks, came in, and functioned. Now it’s totally the opposite.” To which I wondered how many young people simply would be scared away by the intricacy of it all. To which Miller said, “You’re right, it could be intimidating, but kids tend to find it fascinating because they’re looking at screens all day as it is. These kids are talented when it comes to computers, so much more than people our age.” . . .
The chapter returns a short time later to what other interviewees had to say about the importance of expertly trained men and women in manufacturing and other fields and trades, especially given how approximately 10,000 baby boomers are hitting age 65 every 24 hours. But as noted right below, the chapter also looks at major studies, starting with a report released by the Manufacturing Institute and Deloitte in 2015, “The Skills Gaps in U.S. Manufacturing 2015 and Beyond.”
Right at the start, the Manufacturing Institute and Deloitte study projects how 3.5 million manufacturing jobs “likely” would need to be filled over the decade beginning in 2015, but because of the skills gap, 2 million of them would go unfilled. Two major dynamics would contribute to the shortage: the retirement of 2.7 million men and women, large numbers of whom would be previously mentioned baby boomers, born between 1946 and 1964; with “natural business expansion” leading to another 700,000 unfilled positions. The report immediately cited four additional factors for the gap: “loss of embedded knowledge” because of all the movement of experienced workers; negative impressions about manufacturing on the part of young people; a lack of STEM skills; and the decline of technical education offerings in high schools.
How much might the skills gap diminish what U.S. businesses could do? In a survey tied to the report, 82 percent of responding executives said they believed it would “impact their ability to meet customer demand.” And 78 percent said it would “impact their ability to implement new technologies and increase productivity.” From another angle, the Manufacturing Institute and Deloitte report cited a study that estimated “average” manufacturers in the United States losing 11 percent of their annual earnings because of talent shortages, with another study estimating an average loss of $14,000 per each unfilled position. All substantial hits.
In another report, this one released in 2005, the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine “undertook a study of America’s evolving competitiveness in the global economy.” The resulting publication, Rising Above the Gathering Storm, opened by noting how the United States “takes deserved pride in the vitality of its economy, which forms the foundation of our high quality of life, our national security, and our hope that our children and grandchildren will inherit ever-greater opportunities.” Nonetheless, about 500 pages later, it concluded: “Without a renewed effort to bolster the foundations of our competitiveness, we can expect to lose our privileged position.”
Five years later, in 2010, many of the truly distinguished men and women who participated in the 2005 project reassembled and produced a follow-up, Rising Above the Gathering Storm Revisited, which concluded that not nearly enough progress had been made in a range of scientific, educational, governmental, and other areas. Disconcerting as the update was, it was not surprising for no other reason than not many national reports conclude by declaring victory.
Problems identified in 2005 were insufficiently solved by 2010 because they were intrinsically tough, possibly compounded by national embarrassment, as when it was noted that, “The World Economic Forum ranks the United States forty-eighth in quality of mathematics and science education.” Or even more pertinently to what we’ve been dissecting, “The United States has fallen from first to eleventh place in the OECD in the fraction [of] 25- to 34-year-olds that has graduated high school,” while the “older portion of the U.S. workforce ranks first among OECD populations of the same age.” (OECD is the acronym for the Organization for Economic Co-Operation and Development.) For our purposes, though, one paragraph stands out in the Academies’ 2010 report.
“It should be reiterated that the need to strengthen science and math education in the nation’s public schools is not simply to produce more graduates possessing the qualifications needed to pursue degrees and careers in science and engineering. The spectrum of jobs that is available to high school as well as college graduates is increasingly demanding at least rudimentary skills in these fields.” I would like to think that if this were written now instead of 2010, the last sentence would refer not just to high school and (presumably) four-year graduates, but specifically also to recipients of associate of arts degrees and one-year and two-year certificates, as well as to graduates of apprenticeship programs and veterans who learned occupational skills in the military. . . .
The focus of Pathways to Prosperity, published by the Harvard Graduate School of Education in 2011, is primarily on transitions between high school and what might, or might not, constitute postsecondary studies of some sort, including hanging-out on old-style street corners. Whereas my focus is on transitions between high school and specific kinds of postsecondary institutions: four-year schools and two-year schools, as well as apprenticeships and military service. Nevertheless, Pathways to Prosperity (subtitled Meeting the Challenge of Preparing Young Americans for the 21st Century) was one of the more persuasive publications of its kind when I read it several years ago, and it remains so, especially since it contains a vivid critique of the “college-for-all” ethos, as in:
“[E]ducation reformers have mounted a sustained effort over the past two decades to raise standards, improve test-score performance, and promote ‘college for all’ as the primary pathway to success.” This drive has had “many ameliorative effects.” But after 20 years of strenuous and exceedingly expensive efforts, “the time has come for an honest assessment.” While there have been modest gains, the movement’s “bottom line measure of success is college completion. And on that score, we have still been unable to get more than 30 percent of young adults to earn a bachelor’s degree by their mid-20s.” And then the kicker: “‘College for all’ might be the mantra, but the hard reality is that fewer than one in three young people achieve the dream.”