By William Reinsch
Last week I discussed my confusion about the actual state of the U.S. economy. My conclusion was that while it may not be as good as the Democrats say it is, it is almost certainly better than what Donald Trump said it was. Indeed, one of the likely political ironies of the next several years will be that Trump will get the credit for a significant recovery that got underway late in the Obama administration. Bill Clinton benefited from the same thing in 1993, although his policies enhanced and sustained it. Hopefully, that will happen again.
Regardless, it remains clear that some parts of our population continue to fall behind economically. In previous columns I have tried to define this group, or at least that part of it which voted for Trump — often white, often rural, over 35 and under 65, with a high school education or less. Many of them had good jobs in manufacturing which have disappeared as factories have closed or moved. They blame trade for their loss, but that is hardly the whole story.
The irony is that despite these unemployed, there are thousands of good manufacturing jobs going begging. Company after company is telling stories of how difficult it is to find workers, even when they are willing to train them. Last October, there were 322,000 job openings in manufacturing, which is more than three times what were available in the recession year of 2009. One recent example from Reuters:
“After years of running flat out, U.S. Gulf Coast refiners are lining up repairs to plants in 2017 – but facing a severe labor shortage that could delay work, drive up costs and raise accident risks….Refiners are now competing for pipe fitters and ironworkers with a host of billion-dollar energy projects…. “Refiners are going to have trouble finding even the lowest skilled workers, such as scaffold builders, and you can’t do work at a refinery without a scaffold,” [Anthony}Salemme [vice president at IIR] said.
I have previously talked about how well our manufacturing base is doing in terms of its production of actual stuff, although it is doing it with fewer employees. Now it turns out we could be doing it even better if we could find the workers. So, there is an obvious mismatch here — thousands of workers who say they can’t find jobs while there are thousands of good manufacturing jobs available. Why not just put them together?
As you no doubt have guessed, it’s not that simple. One size clearly doesn’t fit all. Here are some, but not all, of the reasons.
Mobility: The jobs and the unemployed are not always in the same place. Many of the latter are in small or medium-sized towns in the Rust Belt. Many of the former are nearer large urban centers or are near either coast, which seem to be growing faster than the interior. So why don’t the people move to the jobs, which has been our history? One answer is that more often than you think they can’t afford to because their houses are under water, a consequence of the 2008 financial crisis. Another answer is that they don’t want to because their extended family and support structure is where they are, and they don’t want to abandon that. We seem to have lost the spirit of the frontier that drove much of our history in the 19th and early 20th centuries. The spirit of adventure and unlimited possibilities that has defined us as a people throughout our history has itself become history.
Skills: The new assembly line is different from the old one. Walk into a manufacturing plant today and you will see a lot of industrial robots. The human workers are for the most part not attaching parts or screwing in bolts but are pressing buttons to operate machines or using computers to guide the machines. Those jobs don’t necessarily require a college degree but they do require more than the basic high school education and a skill set that our population of unemployed did not acquire. Can they get it? In many cases, yes, you can teach an old dog new tricks, but the old dog needs to believe in himself and be willing to undergo training, which older workers often find frustrating or not appropriate to their actual needs (I have previously written about how poorly we provide adjustment assistance, and that hasn’t changed).
Personal Responsibility: One issue which sadly keeps coming up is the growing number who cannot pass the drug test that many employers require. Much has been written about the opioid epidemic affecting communities across the country, and I have nothing useful to add to that except to note its economic as well as social cost.
Attitude: There is a growing feeling on the part of millennials entering the job market that manufacturing is not cool. It is perceived variously as hard, dirty, dangerous, repetitive, and boring. The truth is that it can be all — or none — of those things, just like a lot of non-manufacturing jobs. The burden is on companies to sell the advantages of a career in manufacturing and on young workers to look at their prospects realistically and to understand, as the Rolling Stones said, you can’t always get what you want. At the same time, proposals to bring back technical curricula in high schools and to grow apprenticeship programs can do a lot both to sell manufacturing and to prepare millennials for what it offers.
Finally, you may notice something missing — trade policy. We can debate whether or not it causes unemployment (my view is yes, but not as much as some other things like technology), but looking at the above it is hard to argue that changing it solves unemployment. Serious problem? Yes. Hard to solve? Yes. Trade is a scapegoat? Yes!
William Reinsch is a Distinguished Fellow with the Stimson Center, where he works principally with the Center’s Trade21 initiative.