Manufacturing Jobs in the USA: Yes, It Can Be Done
With the attention focused by the White House on returning manufacturing jobs to the United States contrasting with those who insist that American manufacturing jobs are gone for good, it is critical for companies and other stakeholders (including employees, students, and even legislators) to understand from the business perspective the realities with which domestic manufacturers (and potential manufacturers) are grappling.
Let’s be brutally honest for a moment: When most people hear the oft-quoted statistic that 70,000 American factories have closed over the past couple of decades as their production (and jobs) have been offshored, they naturally infer that manufacturing in the United States has correspondingly dropped over that time. The reality is quite the opposite, as American manufacturing has, in fact, grown during this period. Growth in manufacturing output, that is — NOT growth in jobs.
Make no mistake about it. The job loss is very real — and permanent. Very few of those offshored manufacturing jobs will ever return, even if the factories themselves do, because in a global economy, low-skilled manufacturing jobs will always find their way to the low-wage, less-regulated economies in the under-developed world.
The dramatic rise in automation, both in the form of increasingly dynamic robotics and artificial intelligence, is also a critical factor to the reduction of American manufacturing jobs. Yet it is these precise supposed “job killing” factors — automation and technology — that are responsible for the rebounding competitiveness of American manufacturing on the world stage. Companies are embracing automation because its return on capital far outpaces that of low-skilled labor, particularly by improving efficiencies, expanding capacities, and lowering operating costs.
That advances in technology and automation produce such dramatic changes is certainly not novel. The inventions of the tractor, combine, and other equipment revolutionized the farming industry, reducing the percentage of American wage earners who worked in agriculture from over 60% to under 2%. And those changes, though difficult for farm workers, resulted in significant societal benefits in the form of dramatically increased crop yields and varieties. The farming population slowly migrated to cities, spawning the era of urbanization and a very different employment picture in America.
But while the financial impact of automation is much discussed, its job creation is too often overlooked. In fact, the research and development, design, installation, networking, and operation of manufacturing robots and automated solutions all create a significant number of well-paying high-skilled jobs. And these jobs tend to be more secure, as those filling them tend to have substantially more education and the flexibility to adapt to the continuously evolving environments that are the factories of the twenty-first century.
The rise of manufacturing jobs in the United States, therefore, begins with the understanding that American manufacturing is no longer the bastion of low-skill, repetitive task, forty-hour-per-week-shift jobs. For companies to effectively compete and grow, they must focus on product and process innovation, which means cultivating a highly-skilled workforce of designers, engineers, and technicians, all trained in the most up-to-date techniques and technologies.
Data collection and management already play a very significant role in manufacturing. With the rise of the IOT (Internet-of-Things), which includes production equipment, emphasis on data utilization in factories will only increase, necessitating an important new category of manufacturing programmers and analysts.
So regardless of the rhetoric, the reality is that American manufacturers and their suppliers are currently creating — and will continue creating — more jobs. Professional jobs. Technical jobs. Ever-developing jobs. Companies that understand, plan, and implement around this dynamic have gained a competitive edge as a result.
I write from personal experience. My company, Cambridge Security Seals, is a perfect example of a manufacturing company who understands and operates on this equation. We created CSS in Pomona, New York in 2011 as a domestic manufacturing response to the consolidation and offshoring of American security seals production, and we have quickly grown from three to 70 full time employees. Currently engaged in our third major capabilities and demand-driven capacity expansion, CSS has been operating 24 hours per day/7 days a week since early 2015.
What defines CSS is its laser-like focus on both product and process innovation by a highly skilled workforce in its relentless pursuit of sustainable competitive advantage. The pace of innovation at CSS is staggering. Our company is dedicated to R&D, focusing on designing and implementing new manufacturing technologies, retrofitting existing equipment under a Continuous Improvement mandate, and continuously training production personnel for technical proficiency. By combining internal design and engineering expertise with specialized subcontractors and equipment manufacturers to customize and build production processes, we achieve both cost and efficiency advantages. CSS will shortly install highly innovative production lines featuring its third generation of technological enhancements in six years.
The rapid growth of CSS does not occur without significant challenges, including the difficulty in finding skilled equipment operators and maintenance technicians. To meet our needs, our managers have developed the skills (and they are certainly skills) to recruit and train ambitious but relatively inexperienced workers to understand and develop competencies in injection molding, automation, robotics, tooling and machining, and even programming and electronics. Our company provides multiple advancement tracks within our manufacturing departments for those who excel, several of whom have already advanced to supervisory positions.
We are continually asked if the high R&D and personnel costs in such a capital-intensive business preclude CSS from competing globally? The reality is that while the quality of our best-in-class seals make them sought-after products by multinational companies around the world, it is the value of the dollar relative to other currencies, particularly the Chinese yuan, along with the less cumbersome regulations and government subsidies enjoyed by overseas competitors, that can be the more significant anti-competitive factors. These are the macroeconomic growth inhibitors that so many American industries face, and that the Trump administration has vowed to combat.
American manufacturers can thrive — and American manufacturing jobs can grow. Innovation is the key, and education is essential to fostering innovation. Training, not complaining, is what will increase the number of manufacturing jobs. Businesses will certainly do their part. Hopefully, the politicians will figure out how to do their part.