In anticipation of the debates, our infographic illustrates the importance of U.S. manufacturing and its workforce and what the candidates are saying about these critical components of the U.S. economy.
The number of manufacturing workers in the U.S. is over 12 million people, with the average annual salary totaling over $84K, according to the U.S. Bureau of Labor Statistics. U.S. manufacturing contributed $2.38 trillion to the economy in 2018, and if it were a nation, U.S. manufacturing alone would rank the eighth largest in the world. While manufacturing is currently a huge contributor to the U.S. economy, future forecasts predict the industry could expand further.
There are a number of signs that reshoring of U.S. companies is starting to happen. A record 145,000 jobs returned to the U.S. last year. Plus, the 2019 A.T. Kearney Foreign Direct Investment (FDI) Confidence Index executive survey ranks the U.S. as the country most likely to attract the most investment in the next three years, beating out China, Japan and Germany. Additionally, a recent McKinsey Global Institute report says U.S. manufacturing GDP could climb to $3 trillion in 2025.
Regardless of whether the contributors to reshoring are the tariffs, tax cuts or other factors, what is important is that companies reshoring are investing heavily in automation to optimize the output of the factory floor. While this may lead to a lower number of jobs of assembly workers, it increases the requirements for skilled labor to keep the machines and robots running.
However, what is holding the industry back is the skills gap, which is the lack of available skilled workers to fill the number of U.S. manufacturing jobs open. This issue is exacerbated by older skilled laborers retiring and the younger generation not having the knowledge to fill the demand. A recent study by Deloitte and The Manufacturing Institute shows that 2.4 million jobs could remain open in the next decade because of the skills gap.
U.S. manufacturing’s need for training
With many manufacturers already having trouble finding workers with the right knowhow, this problem will worsen if training efforts to close the skills gap are not put into place. While retooling the traditional education system in the U.S is important, this is only part of the equation to properly give future workers the right skills needed and does not help reskilling current workers. The private sector will likely have to play a big role in the retraining efforts. This trend appears to have begun with Amazon’s recent announcement of investing $700 million to upskill its U.S. employees to fill the company’s in-demand jobs.
It is with this sense of importance that we wanted to survey the current field of candidates and summarize what their campaigns indicated they would do if they became president.
After an analysis of the 24 Democrats running for U.S. president in 2020, Simutech Multimedia, a global leader in simulation training, has found only a fraction of the candidates are including manufacturing and/or skilled labor in their platforms. The research was conducted based on the candidates’ websites, interviews given by them and other public comments they made. Only four of the candidates are including the word “manufacturing” in their talking points, and only one candidate, John Delaney, identifies the “skills gap” as a major issue.
Furthermore, when the Democratic candidates are talking about the future of making products in the U.S. at all, they are using terms like the “Green New Deal” or “clean energy economy.” Senator Elizabeth Warren is calling her plan “Green Manufacturing,” which entails investing $2 trillion over the next ten years in green research, manufacturing and exporting. Senator Bernie Sanders says the Green New Deal will, “generate millions of jobs by transforming our energy system away from fossil fuels to 100% energy efficiency and sustainable energy.”
While providing clean energy is important, associating it with manufacturing may reinforce the widespread, but ill-conceived perception that making food, beverages, cars and other products is a dirty business. The U.S. manufacturing industry is becoming increasingly high-tech and extremely advanced in its automation and connectivity. This is placing a further strain on finding skilled labor to meet today’s demands.
The irony is, that if green manufacturing is successful, the skills required to sustain green energy are the same skills required to sustain a distribution center, a winery or a car manufacturer today.
And to be clear, the skills gap problem is not a party-specific issue. Even with President Trump’s focus on bringing U.S. manufacturing back, it remains to be unseen what the larger reskilling efforts will be to train scores of new manufacturers as well as retrain the older workforce to equip them with advanced automation skills.
So, no matter who succeeds in the 2020 presidential election and for whatever reason U.S. manufacturing continues to grow, the skills gap problem needs to be addressed. We look forward to learning more about how all the candidates as well as President Trump plan to address this serious issue. In the meantime, this infographic is our summary of what the Democratic candidates currently say or do not say, about manufacturing and the skills gap.