Lighting More Sparks: Closing the Skills Mismatch in Manufacturing

Yesterday, President Obama did something really crucial about the economy and jobs. But I bet you did not hear a peep of it on the TV machine. He went to Northern Virginia Community College to talk about an initiative he has launched in partnership with private businesses with one goal in mind: tailor the training training of a manufacturing workforce to match the skills jobs require. First, watch the President's remarks:



There's a reason I made you sit through a 13-minute speech from the President before delving into just what is happening here and why it is so important. Nearly every word the president said was essential. But here is the part the partnership he announced focuses on and the central focus of this column (from the transcript):
...the irony is even though a lot of folks are looking for work, there are a lot of companies that are actually also looking for skilled workers. There’s a mismatch that we can close.
The mismatch President Obama is talking about is not trivial - not in manufacturing, and not in our economy in general. Now, I should mention at the outset that the skills mismatch is not solely responsible for the employment situation in this country; it does not even bear anywhere close to majority responsibility. But it is significant, and creative solutions to this problem will most certainly help ease the jobs crunch. Every little bit counts in this economy, and this is a good chunk. Let's quickly explore the scope of the problem and the solution President Obama is proposing in concert with educational institutions and business leaders.

The Skills Mismatch Problem

So let's first take a look at how the skills mismatch is hurting our job market. You have employers in the market looking to hire, and you have people looking for jobs. But in way too many cases, the skillset employers are looking for are not the skillset of those who are looking for jobs. So beyond just the problem of supply in the labor market outstripping demand, we also have a problem of a supply-demand mismatch. If the skills could be matched, the jobs picture could look significantly better. How much better? According to Manpower, 3 million better as of last September.
"We still have a very serious mismatch in Milwaukee," said Timothy Sullivan, chief executive of Bucyrus International Inc., the Milwaukee-area manufacturer of mining machinery and heavy equipment. Bucyrus has sounded an alarm for several years that it cannot find and train enough welders, once a common trade in Milwaukee's machine shops.

According to Manpower Inc., the global job-placement company, the nation has a gaping disconnect between openings and qualified candidates - a gap contributing to around 3 million unfilled U.S. jobs - which in turn hampers growth.
That 3 million is a small fraction of the 14 million unemployed Americans, but absent the skills mismatch, we would have 11 million unemployed. In addition to those 3 million jobs, there is a ripple effect factor to consider.

3 million more people with jobs would mean 3 million more consumers spending a bit more freely, 3 million more people able to make their mortgage payments (if they have a mortgage), 3 million more people paying taxes. This would result in greater consumer demand, leading to more hiring in retail and supply chains. It would ease, if only by a bit, the downward pressure on the housing market. At the same time, it would result in additional tax revenue for local, state and federal governments, which would prevent states and local governments from laying off teachers, law enforcement and firefighters and other essential public service workers. After all, in the last year or so, private sector hiring has ticked up while states and localities have been laying off essential personnel.

President Obama's Leadership in Crafting a Solution with the Private Sector:

The skills mismatch is one of those things that hurts not only the American worker but also American businesses. They are not looking to hire 3 million people out of the goodness of their hearts. They are looking to do so because there is a demand out there for the products and services the people employed in those positions would produce. This is where the federal government can show some leadership, and of course, President Obama is showing leadership.

The initiative, called Skills for America's Future, has existed for a while, and what President Obama did today was to announce a major expansion of it, targeting the manufacturing sector. So what is Skills for America's Future? It's a national initiative by government, businesses and community colleges to close the skills mismatch. President Obama's announcement yesterday expanded the efforts significantly:
As part of the partnership with Skills for America’s Future, the National Association of Manufacturers (NAM) and the Manufacturing Institute, a closely-affiliated non-profit, have established a goal of providing 500,000 community college students with industry-recognized credentials that will help them get secure jobs in the manufacturing sector. The newly-formed partnership joins together NAM’s commitment to helping students become certified with competency-based, customized education and training with Skills for America’s Future’s effort to connect employers with community colleges. The Institute will continue to partner major manufacturing employers with local community colleges as part of the Skills for America’s Future initiative.
They will do this partly by targeting unemployed and underemployed Americans with access to critical resources, assistance, and tools to discover their skills matches and get trained.

This is a president who understands the vital importance of America's manufacturing. A sector neglected by American politicians for three decades, Americans have only recently come to the realization that we cannot simply be an economy that makes nothing. The laser-beam focus on manufacturing, combined with the initiative to match job seekers with the skills being highly sought by employers and skills that are applicable in a broad range of localities and intra-industry lines, is taking the form of the Manufacturing Skills Certification System.
The Manufacturing Skills Certification System, developed with manufacturing firms at the table, will give students the opportunity to earn manufacturing credentials that will travel across state lines, be valued by a range of employers and improve earning power. In designing this program, the Manufacturing Institute has partnered with leading manufacturing firms, the Gates Foundation, and the Lumina Foundation, and key players in education and training including ACT, the Society of Manufacturing Engineers, the American Welding Society, the National Institute of Metalworking Skills, and the Manufacturing Skills Standards Council. This will allow students and workers to access this manufacturing credentials and pathways in community colleges in 30 states as a for-credit program of study.
But of course, the President by himself can only do so much, if Congress does not make the essential investments in our future. In his speech yesterday, the President called on Congress to pass the Workforce Investment Act, or more specifically, for Congress to extend and expand it to provide more funding in these partnership programs to match our workers with the work available. In his speech, the President made clear that investing in America's future cannot be on the chopping block.
David said whatever he ends up doing, the automotive training program here was “the spark [he] needed to get [his] career started.” The spark he needed to get his career started.

Lighting a spark. That’s what community colleges can do. That’s what learning a new skill or training in a new field can do. And that’s the reason that I’m here today. We’ve got to light more sparks all across America [...]

We could choose to walk away from our community college system. We could say to ourselves, you know what, given foreign competition and low wages overseas, manufacturing is out the door and there’s not much we can do about it. We could decide, in solving our fiscal problems, that we can’t afford to make any of these investments, and those of us who’ve done very well don’t have to pay any more taxes in order to fund these investments.

But I want to make clear, that’s not our history. That’s not who we are. I don’t accept that future for the United States of America. I see a United States where this nation is able to out-compete every country on Earth, where we continue to be the world’s engine for innovation and discovery. I see a future where we train workers who make things here in the United States, and continue a important and honorable tradition of folks working with their hands, creating value, not just shuffling paper. That’s part of what has built the American Dream.
If anyone doubts that future is possible, or this president's commitment to American workers, American jobs and American manufacturing, the President pointed them to auto industry success story.

Concluding Remarks

As I had said in the opening, simply closing the skills mismatch won't be a silver bullet for solving our unemployment woes. There are no silver bullets. But precisely because of the fact that people are suffering, we cannot leave any stone unturned. Every solution - especially something as significant as this - must play its part. This will not end our unemployment problems, but it is a targeted solution that is good for the economy today, and as the skills gap closes, bodes well for the future.

Another thing to mention here is that the President alone cannot do this. The effort President Obama launched yesterday to target the manufacturing sector needs to be duplicated across industries, states, institutions and yes, policymakers. Manufacturing, engineering, technology - both consumer and health care and health information technologies, health care, renewable energy are all industries that can use this effort. This should become part of an effort not simply to recover but to rebuild, as President Obama says, to a new, 21st century, more vibrant economy. Recovery from a near complete collapse of the global economic system does not happen overnight, but as it happens, even slowly, rebuilding is just as important as recovering.