by Ron King
Joseph Poole will make more than $100,000 in wages and overtime by the end of the year.
The 21-year-old works in what looks like NASA’s mission control, monitoring the manufacturing process at Chevron Phillips petrochemical plant in Houston. Poole didn’t get the job with the engineering degree he originally considered. Instead, Poole landed it with a two-year course at a local community college.
“The potential to make just as much money as an engineer, but for half the cost of the education, was here,” Poole says. “Just seeing firsthand how things are made is something I really enjoy doing.”
By 2017, an estimated 2.5 million new, middle-skill jobs like Poole’s, are expected to be added to the workforce, accounting for nearly 40% of all job growth, according to a USA TODAY analysis of local data from Economic Modeling Specialists Intl. and CareerBuilder.
Not all pay as much as Poole’s, but all pay at least $13 an hour; many pay much more. These jobs require some training but far less school than a bachelor’s degree. Technology has given many a makeover, leaving them worlds away from their assembly-line predecessors and challenging the notion that good blue-collar jobs are dead and that the only path to a good career is a four-year degree.
Jobs are coming back
The loss of blue-collar jobs — accelerated by the recent recession — has resulted in the “hollowing out of the middle,” which has left behind either low-paying jobs or higher-paying jobs that require significant skills say some economists. Some optimistic economists disagree; they say the middle is not gone; rather, it’s growing. There will be tremendous demand for these jobs when the Baby Boom generation retires. Currently, Boomers make up about 20% of the workforce.
The growing middle class jobs are coming back, but they are coming back different. More technician jobs are returning, which pay more. There may be fewer jobs, but they are better jobs.
This however means more training, given that nearly 80% of the new blue-collar jobs require such training, typically less than a year. Some companies can provide it, but many require prospective workers to find their own classes. In Marlboro County that is at Northeastern Technical College (NETC). Even in job growth, you’ll need training.
“If you have no skills, you’re not necessarily going to pop down here and find a job,” says Bobby Hitt, Director of the South Carolina Department of Commerce. “You need to get some training or education … otherwise, you’ll end up in the same old situation you were in before our comeback.”
‘More than one road to heaven’
Society’s push of the last decade, to get all young people into four-year colleges contributes to a shortage of skilled workers. People degrade or demean jobs that don’t require a four-year degree; that’s not what they want their kids to do. At the same time, high schools have dropped vocational and technical education programs over the past 30 years, eliminating a key way young people are introduced to these careers.
Higher education has been in one column and everything else was called alternative. And those kinds of pursuits are reserved for people who are somehow deficient or somehow not cut out for the desirable path. Some worry there are too many young people going to four-year colleges, racking up huge amounts of debt and ultimately ending up unemployed, when they could’ve taken a less-expensive path and ended up with a good-paying job.
“Students need to know what the real employment prospects are going to be, including financial costs,” Hitt says. “What will school cost you? What will the pay be?”
Community and technical colleges are filling the gap by enrolling young adults who either drop out of a four-year college or can’t find a job after graduation.
The Information Gap
Researchers say there are some legitimate reasons employers might be having trouble finding qualified workers in certain locations or positions. This could include markets with low unemployment, jobs with relatively new skills and rural areas with a limited labor pool.
“It is such a local problem,” Hitt says, referring to what he calls an “information gap.” “Employers don’t know the talent is available in another area and (workers) don’t know they can make three times as much three hours away,” he says.
Employers may say they can’t find workers for political leverage: to loosen immigration laws, particularly for higher-skilled workers, and to get educational systems and public tax dollars to take over the burden of training workers.
If employers can’t persuade the government to take action, then I think we’ll see employers get creative, figure out ways to train people as we did 30 years ago and the market will work this out.
“South Carolina is committed to putting the mechanisms together to identify real jobs. We’re just saying here’s where the jobs are, here’s the requirements, here’s how you get those requirements and we’ll help you pay for it, if you qualify.”
Hitt cites a program that taught CNC skills to five workers with no previous experience for three available openings. All graduated, and within days, were hired at very competitive salaries.
The US White House released its jobs report in July, stressing the importance of employers working with schools to make sure students are getting the right skills, and promotes more apprenticeships. Marlboro County’s Career Technology Team is already working on this through the Marlboro County Economic Development Partnership (MCEDP) Education and Workforce Committee, under the leadership of Dr. Ron Bartley and great support by local industry, Marlboro County School District (MCSD), Adult Ed, NETC and others linking programs at the school. Together data on supply, demand, wages and required skills for local occupations is collected and accessed. For example, there are 26 current job openings for students in the Applied Welding program — also referred to as Production Welding— in the area. Salaries can reach as high as $20 an hour, but there aren’t students being trained for these jobs. The college is converting an existing program to meet this immediate need.
Colleges, like NETC, are trying to respond to the ebb and flow of job demand by offering fast-track, non-degree courses that get trained students into the workforce faster, but also can be easily scaled back or dismantled when the supply of workers meets demand.
“We need students who are college-ready and ready for an intensive experience,” said Sherrie Chapman, vice president of workforce development at NETC. “We’re doing this to create a worker.”
Harry Moser (right) meets
VP, Merchandise Finance & Strategy – Softlines,
Walmart U.S. Guy Rockey during Walmart’s
U.S. Manufacturing Summit.
A few weeks ago, I came across a couple articles and they struck me as very informational and as a potential difference maker for U.S. communities and organizations like ours. Here is an adapted excerpt from one of them.
From Ed Crooks in Financial Times wrote…
American companies are increasingly “reshoring” manufacturing operations from China to the US, according to a survey of executives.
The shift reflects China’s ebbing competitive advantage as a low-cost manufacturing centre after years of rapid wage inflation and points to rising employment in US manufacturing, even though official data have shown little growth over the past year.
Recent examples of companies announcing plans to shift production from China to the US include Element TV, coming to Winnsboro, SC.
The Boston Consulting Group (BCG) survey found 21 per cent of a sample of 200 executives of large manufacturers were either already relocating production to the US, or planning to do so within the next two years. A further 33 per cent said they were considering it, or would consider it in the near future.
Labor costs were the factor most commonly cited by executives as determining location decisions, and China’s advantage has been slipping. Wage inflation has been running at about 15-20 per cent per year. Average hourly earnings in US manufacturing have risen just 1.6 per cent per year since 2011.
However, Hal Sirkin of BCG said he expected the effect of reshoring would begin to show in the data over the next few years.
BCG is predicting that, by the end of the decade, reshoring and rising exports will have created 0.6m-1.2m new manufacturing jobs in the US.
The effect will vary across industries, BCG says. Prime candidates for reshoring are industries that have relatively lower labor costs, and relatively higher transport costs. Other reasons cited were to be close to their customers.
For the complete article navigate your browser to http://www.ft.com (The Financial Times)
Harry Moser has decades of experience in the manufacturing industry, and shares an obvious passion for U.S. manufacturing, as I do. This passion and his concern over the loss of manufacturing jobs to other countries compelled him to create The Reshoring Initiative – an industry-led effort to bring manufacturing jobs back to the United States. The organization’s primary agenda is to help companies evaluate the total cost – not just price – of offshoring manufacturing operations and supply chains. Harry asserts that sourcing decisions are too often made without evaluating criteria such as inventory carrying costs, traveling costs to check on suppliers, intellectual property risks and opportunity costs from product pipelines being too long. When these are included, companies will frequently conclude that reshoring makes sense.
The best part about the Reshoring Initiative is that it is a non-profit with a variety of resources to help companies and communities bring jobs back to the U.S. One of these resources is the (free) Total Cost of Ownership Estimator, which will help calculate all these “other costs” and help companies make better supply chain decisions. I would strongly recommend that every economic developer whose community wants to attract and retain manufacturing jobs become familiar with the Reshoring Initiative and that the Total Cost of Ownership Estimator should be an integral part of the business retention and expansion toolkit.
The mission of the Reshoring Initiative is to bring good, well-paying manufacturing jobs back to the United States by assisting companies to more accurately assess their total cost of offshoring, and shift collective thinking from offshoring is cheaper to local reduces the total cost of ownership.
Total Cost of Ownership Estimator™ – The Reshoring Initiative offers a free online estimator tool to help in making your sourcing decisions and selling against offshore competitors.
Every once in a while, you run across the perfect solution — the one ideally aligned with your company’s goals.
Apprenticeship Carolina may just be that solution.
Housed in the SC Technical College System, this unassuming program is an absolute gem for building South Carolina’s skilled workforce. Apprenticeship Carolina dedicates its resources to increasing registered apprenticeship in the state. And, they have done just that. South Carolina currently boasts one of the fastest growing apprenticeship systems in the country and is garnering numerous national accolades and recognitions.
That growth has quickly found its way into Marlboro County. Several industries have already taken advantage of the apprenticeship program and several others are currently developing programs.
Apprenticeship Carolina proactively reaches out to nontraditional sectors such as healthcare, finance, hospitality and tourism, information technology and advanced manufacturing with the message that apprenticeship has evolved. It is no longer limited to just traditional occupations.
A commitment to building South Carolina’s talent lies at the heart of Apprenticeship Carolina’s growth. “We have a very business-centric focus. As we introduce the benefits of registered apprenticeship, companies see the value in it – higher skills, decreased turnover, consistent training and a reliable plan for transferring knowledge from an aging, experienced workforce to the next generation of talented employees,” said Brad Neese, director of Apprenticeship Carolina. “We walk companies through the process. We make it very easy – painless, in fact.”
In addition, eligible businesses can receive a South Carolina tax credit of $1,000 per apprentice per year for up to four years.
As South Carolina works to grow its skilled workforce, enhance its competitiveness and increase the employability of its citizens, Apprenticeship Carolina is a program ideally aligned with these goals — it very well could be that perfect solution.
To find your workforce solution, contact Teri Luther at (803)896-5203 or LutherT@sctechsystem.edu to discover how to set-up your apprenticeship program. For more information, visit apprenticeshipcarolina.com
The American South has always and will always rely on middle-skill workers. They are the machinists who will use new computer numerically controlled technologies to create new products for export. They are the chemical technicians who will help develop the medications that keep our families healthy and the skilled production workers who make those drugs a reality. Middle-skill jobs pervade almost every industry in this country, from licensed practical nurses and radiological technicians, to claims adjusters and paralegals, to auto repair diagnosticians. Many middle-skill jobs are local, hands-on jobs, meaning that they are unlikely to be outsourced to other countries.
Regions must ensure that investments in training and education are targeted to meet the full range of skill needs of local industries, and that all stakeholders connected to those industries are engaged to ensure the greatest return for local workers and firms. Sector partnerships do this by creating the capacity to organize key stakeholders connected to an industry—multiple firms, education and training providers, community-based organizations and the workforce education systems—to develop customized solutions for that region. Rather than one company and one educational institution forming a partnership with limited returns, sector partnerships promote growth and competitiveness across an entire region by developing immediate strategies to fill pressing skilled workforce needs, as well as long-term plans to grow industry with a better trained and more productive workforce. In addition, these partnerships improve worker training, retention and advancement by developing cross-firm skill standards, career pathways, job redefinitions, and shared training and support capacities that facilitate the advancement of workers at all skill levels, including the least skilled.
The American South’s need for qualified middle-skill workers today is as great as ever. As economic recovery gathers momentum, and economic development investments pay off in new jobs, existing and emerging job vacancies will need to be filled. Investments in our economy will pay off only if a base of middle-skilled talent is in place to meet projected demand for skills. However, as regions focus on growing the middle-skilled workforce to support new industry, they can’t forget the “old” industries that have traditionally served as the backbone of their economies. A 2011 report on the South’s workforce found that the recession accelerated the region’s shift to a knowledge based economy and that industries that traditionally have relied on a large available low-skilled labor pool will need more highly skilled workers to survive. The report found that many Southern workers, incumbent and dislocated alike as well as a large share of current jobseekers are simply not prepared for the transition and face severe challenges in adapting to this new economic reality.
This economic reality and these skill challenges do not set Marlboro County apart from the region.
They do not set the South apart from the rest of the nation. What will set the South and individual regions apart is how they respond to these challenges. Regions that make targeted investments and policy reforms aimed at closing the middle-skill gap will be in the best position to survive the innovation transition in old industries, grow new innovation industries, support job creation, and prepare the region for better times ahead.
Jobs: Demand for Middle-Skill Jobs is Strong
Over 50 percent of all jobs in 2009 were middle-skill jobs.
Job Openings: Demand for Middle-Skill Jobs
Will Remain Strong
In the decade between 2008 and 2018, 46 percent of all job
openings will be middle-skill.
Job Openings by Skill Level, South Carolina, 2008–2018
A Middle-Skill Gap
Middle-skill jobs account for 53 percent of South Carolina’s
labor market, but only 47 percent of the state’s workers are
currently trained to the middle-skill level.
Middle-Skill Gap Will Persist
Educational projections for South Carolina suggest
that the state is likely to face a continued shortage of
middle-skill workers in the future. During the fifteen
years between 1995 and 2010, the state saw an increase
in residents with educational attainment at the middle and
high-skill level, while the number of residents
with low-skill education levels decreased. The state’s
projected education trends for the subsequent fifteen
years suggest that while there will be a slight uptick
in middle-skill educational attainment, middle-skill
worker shortages will continue.
Percentage Change in Educational Attainment,
South Carolina, 1995–2025
The Workforce of Tomorrow
is in the Workforce Today
South Carolina cannot address its middle-skill
challenges by focusing its education and training
resources solely on the next generation of workers
coming out of high school. Two-thirds of the people
who will be in the state’s workforce in the year 2025
were already working adults in 2010—long past the
traditional high school-to-college pipeline.
South Carolina’s 2025 Workforce
If you search the internet for workforce development best practices, you will sadly come up with very little.
The lack of a “best practices” list for workforce development is troubling because of the importance of structuring program offerings around the needs, trends, and resources in the community we serve. However, by observing other organizations that are excelling it is still possible to gain new ideas for quality improvement and recognize new opportunities for our own programs.
Theworldofworkhaschanged.Manyindividualscannolongerrely onmaintainingthesameoccupation–orevenworkingforthesameemployer–throughouthisorherworkingyears.Technologicaladvances–especiallycomputers–havechangedhowandwherewework,ashastheshifttotheindustrial and tothepost-industrialeconomy.Moreover,ourpopulationstructurehasalsochanged,not only at the national level but alsowith variations between and within regions and LOCALLY.
Changesintheeconomy atthelocal,regional,state,andnationallevels hasbroughtattentiontotheissueofworkforcedevelopment. ManypublicandprivateEconomic Development organizationsnowengageinsomeformofworkforcedevelopment.
Considerthecomplexworldofworkforcedevelopment.Workforceconsistsofseveraldistinctsub-groups:existingworkers,newentrants,unemployed workers, andtheunderemployed workers.Each sub-group hasitsown development needs and there is variation withingroupsaswell.Therearemanyplayersintheworkforcedevelopmentgame:K-12education, post-secondary education (especially Technical or Community Colleges), job training providers, individual businesses and theirorganizations,andgovernmentatalllevels.Eachorganization’seffortsareshapedbyitsownmissionandgoals,itsownperception of local or regional needs, and their available resources.Thoseengagedinworkforcedevelopmentmustnotignoreorforget the context in which theyoperate; LOCAL!
Workforcedevelopment efforts vary widely in scope, goals, and specific program activities.However,intermsoftheirlargerpurposestheycanbecategorizedasprimarily focused towardeconomicdevelopment,minimizing poverty, educational reform, or a combination ofthose.WithineachofthoseverybroadgroupingsareEconomic Development Organizations basedefforts,whichtendtoemphasizeoneofthefollowing:government spending locally,welfare-to-work,school-to-work,stay-in-school,employeetraining,qualitymanagement.IndividualEconomic Developmentmemberssitonworkforceboards,providefinancialsupport,networkwithotherparticipants,serveasmentors,provideinternshipsandjobs,andadviseonschoolcurricula.However,anyEconomic Development Organization effortmustbebasedoncarefulanalysisofits own LOCAL and regional circumstances.
Althoughprogramsandefforts vary widely and there is no single exemplary “Best Practice”program,thereareindividual“bestpractice”characteristicsortraitsthateffectiveprogramshaveincommon.Theyrelatetohowaprogram defines the problem, designs the solution,implementsthesolution,andmeasuresresults,andtheycanbemodelsforothers.“Bestpractices” include:
- Definingtheproblem:Collectdataonlocalandregionaleconomictrends,workforceneeds,workforcedevelopmentcapabilities,theexisting and thepotentialworkforce.Analyze the data to find the mismatches, inadequacies, and problem areas.
- Designingthesolution:Define your mission clearly; determine the geographic scopeofbothproblemandprogram;determinehowlargeaneffortyoucanconduct; linktootherparticipants;targetkeyindustriesorsectors;targetaworkforcesub-population; build in an evaluation-feedback-revision loop.
- Determiningeffectiveness:Establishaprecedentandsystemforaccountability.Trackyourresults;andcomparethemwithbothyourgoalsandtheidentifiedneeds.Reviseyoureffortto accommodate changedcircumstances.
Nosingleprogramoreffortexamineddidallthesethingswell.Butmanywereexemplaryinoneormore of them, and those programs were the more effective ones.Collectively, then,these“bestpractices”providetheguidepostspointingtosuccessinworkforcedevelopment.
Best Practice #1 – Evaluate the Current Landscape
There are different challenges that must be taken into consideration by the local workforce development programs. Every region has different needs for employees and employers It is not possible to create a cookie-cutter solution that is applicable everywhere. This is why workforce development programs are largely state- or community-based. A federal workforce development program would not be in the best position to assess the needs of those they were trying to serve. As local workforce organizations, it is important for us to craft our strategies and workforce development best practices around the needs of our community.
Best Practice #2 – Implement Strategically
All organizations face the danger of mission creep, where they try to offer services that extend beyond the scope of their mission. While we all want to do the greatest good, we cannot do any good if our resources are spread too thin. By trying to accomplish more than we planned for, we can easily overextend our staff and service delivery and end up not serving anyone effectively.
Before starting new initiatives, it is important to ensure that they are within the scope of the organization’s mission and that the organization has sufficient resources to effectively implement these solutions. In other words, it is important to have a good plan in place to evaluate new opportunities.
Best Practice #3 – Measure Outcomes
In an age where modern technology allows us to track every variable of our program operation to determine the best formula for success, utilizing these tools is non-negotiable. By using effective reporting strategies, it is possible for each organization to create its own specific and highly relevant workforce development best practices, making this the most important practice of all.
While we cannot offer best practices that will be effective across the board, there are processes your organization can follow to develop your own workforce development best practices. By considering the needs of the area and population you are serving, acting in alignment with the goal and mission of your organization and tracking results effectively, you can ensure that your programs are fulfilling their role in the workforce development space.
In a press release from Raytheon Company (NYSE: RTN), they are highlighting the importance of math to the 21st century workforce in observance of Mathematics Awareness Month. Here, I would like to highlight some of their other observations. First, that “The Gap between the skills available in the current workforce and those needed for many 21st century jobs creates a serious challenge” to the US. Secondly, that “11.7 million Americans are unemployed, yet 3.9 million job openings remain unfilled”. Later I will come back and address the rest of their observations and conclusions.
Wonk [ wongk ] policy expert: an expert in matters of policy, especially in government, the economy, or diplomacy; a student who spends much time studying and has little or no social life; grind. (1) Noun – An expert in a field, typically someone who is fairly young and very intelligent. (2) Verb – To use ones mastery of a specific subject to perform some type of work.
I am going to go semi-wonk for the next few paragraphs, combined with a lifetime (long lifetime) of observations about the ebb and flow of workforce and employment. In addition to the observations/facts presented by Raytheon, I need to add the following facts to get to the real wonkish conclusions about our workforce.
Babies were born in 1990 and 1992 at a rate of about 343,000 per month. This is relevant to the number of adults being added to our current workforce monthly. Only @ 63% (workforce participation rate) of this number or 216,000 of adults are in the workforce in our general population.
About 1.4 million legal immigrants enter the US annually. They would be adding to the workforce at a rate of @ 74,000 assuming the same workforce to population ratio.
Baby boomers are retiring and will be retiring for the next 19 years at a rate of 10,000 per day or @300,000 per month. Within this group will be 40% of our technically savvy experienced workforce.
Lastly, we need to discuss employed persons moving to social security disability. Over the last 10 years 24,251,615 people have applied for SS disability. Of that only 8,981,512 (or 74,846/month) were actually granted that status. This is only about 37% of applicants getting an awarded status, but it is still @ 75,000 per month.
So on average how many people (net) will we be adding per month to the workforce, making no assumptions about workers getting frustrated by being unemployed for extended periods of time. If we add the persons turning 18 or 22 each month (High School or College graduates or someone dropping out along the way) that is 216,000. Then we add the legal immigrants at 74,000 to the 216,000 we get 290,000. We are losing 300,000 valuable, but old senior workers to retirement each month along with 75,000 workers moving to Social Security Disability.
The economy has been producing over the last year 169,000 full time jobs. Some economists believe the number to be more like 202,000 per month based on the reported W2s to IRS for 12/31/2012. I will use the more conservative number of 169,000.
Using all of these monthly rates we will net a loss to the workforce of 254,000. That is new workers 216,000 plus immigrant workers 74,000 minus new jobs at 169,000 disable workers at 75,000 and retirees at 300,000. I believe this is the minimum as I have used high number of entrant and low numbers of jobs created,
Let’s do some math:
3,900,000 Open jobs
As every four months pass we will be reducing this balance by over 1,000,000. Therefore by the end of 2013 the number of unemployed non-farm workers minus the job openings will be only @5,514,000. If the existing workforce is able to absorb the 169,000 jobs each month, the number of unemployed will be down to 10,200,000 and the workforce number will be down to 153,000,000 yielding an unemployment rate of 6.7%. By this time next year, assuming all of the monthly rates do not significantly change, that would yield @ 9,700,000 unemployed and a workforce number of @ 152,200,000 or 6.4%. Even with the sluggish recovery numbers of the past year as a guide, we can see that we will be back to a working ‘full employment rate” next year.
I do not see this happening as our job opening number has grown from 2,179,000 in July 2008 to 3,925,000 in February of 2013. This would seem to indicate that our skills gap is widening. When you throw in the fact that some states are as low as 3.3% unemployment it reinforces that we have a mismatch of skills and openings in most states on a more local geographic basis. The last time we had job openings of 3,900,000 was in February of 2008 and our unemployment rate was only 4.9%.
How, you might ask, does this relate to the high unemployment in our area and specifically to the 13.9% unemployment in Marlboro County? Tune in next time for my ‘wonkish’ and practical answers.