“The manufacturing workforce is shrinking,” a recent headline screamed. When we look at the peak of manufacturing (July 1979), there were 19,531,000 employed. As of Dec. 2021, there were 12,580,000 employed
in manufacturing. That is clearly a HUGE decline (by the numbers). But what really happened?
This is what happened: a total of five, yes five, economic recessions since 1979, according to the Bureau of Labor Statistics. Manufacturing employment declined in each of them. In 2020, COVID-19
curtailed much of our economy, reduced the need for consumer goods (durable and non-durable manufactured goods), and led to manufacturing layoffs, furloughs, and quits.
After those economic recessions, manufacturing kicked into high gear (again) at some of the highest rates in recent history. A 2014 Federal Reserve Economic Data (FRED) report update said it best:
“Manufacturing is growing, even when manufacturing jobs are not. What is the explanation? A prime candidate is productivity growth.” And this continues to be true today.
So, how does productivity grow in manufacturing? Manufacturers have learned, after going through multiple recessions and rebounds, that their productivity is about more than
improving skills and hiring people.
Among other things, manufacturing productivity must flex to suit consumers demands. And as RAM professionals know all too well, productivity is also about new levels of automation.
More equipment-reliability-improvement efforts. And lean initiatives.
This statement in the newspaper article also got my attention: “Manufacturing has weathered the biggest surge in workers quitting, a nearly 60% jump compared with
Employees who “quit” their manufacturing jobs in Nov. 2021 (the latest figures available at this time) was 2.3%. Think about it. Some workplaces were reeling from a COVID-19-response roller-coaster of
accommodations. Some workers found more financially rewarding “incentives” where they could work less. Jobs opened in new and expanding manufacturing facilities. Others were fed up with things like masking, vaccinations, overtime work, and long hours. Others may have grown frustrated with new technologies and decided retirement was the next best bet. So, they moved on.
Let’s compare. In the same period (Nov. 2021) when manufacturing quits were 2.3% of the employed workforce, (retail) Trade, Transportation, and Utilities reached 3.6%, Professional and business services
reached 3.7%, while Accommodation and Food Services sector reported the highest number of quits at 6.9% of their workforces.
Supply-chain bottlenecks are impacting manufacturing on both ends, I.e., receiving and shipping. When raw materials are not available and workarounds are slim to none, manufacturing slows.
Transportation is an issue because of the number of job openings (8.2% of the workforce). That should explain why the industry is aggressively exploring intermodal transportation and self-driving trucking where reliability of equipment will be an emerging issue.
The good news: Manufacturing jobs are still rewarding, and there are plenty of openings to be filled by talented people willing to learn. But let’s not beat up on manufacturing job loss, quits, and high
numbers of openings. That’s a continuing post-COVID trend across the board. Let’s do our job and keep manufacturing strong, sustainable, and reliable.