FORECAST: What does the future of American manufacturing look like? And what will it take to get there?
MIT is an interesting place to discuss manufacturing because the school's students will likely serve in the vanguard of 21st Century manufacturing as it grows into an ever more high-tech industry.
High-tech manufacturing jobs are important, not just for supporting potential American innovation in key renewable energy sectors like wind and solar power, but because they can provide a middle class income for millions of Americans. In fact, Secretary Bryson wisely pointed out that "manufacturing workers earn pay and benefits about 17 percent higher than average."
But while unveiling a new Commerce Department report on "The Benefits of Manufacturing Jobs," the Secretary was quick to point out that manufacturing jobs are becoming more skilled and heavily reliant on science, technology, engineering and math-- the so-called "STEM" fields. He emphasized the work being done in "cutting-edge fields like flexible electronics, robotics, and biomanufacturing," and cautioned that without properly trained workers, the essential link between innovation and manufacturing could fail. What's really at stake is a the education of America's future workforce:
Clearly, we need the right people with the right skills to fill the thousands of good jobs that are open – right now – especially in advanced manufacturing. And the key to that is in STEM education.
STEM workers are at the forefront of inventing and producing new technologies. Over the last decade, STEM job openings climbed three times as fast as jobs in other sectors.
However, in recent years, only about 13 percent of U.S. college graduates got STEM degrees. That is much lower than other countries like Korea and Germany, which are at about 25 percent.
The solution, as the Alliance for American Manufacturing (AAM) has repeatedly suggested, is for the U.S. to provide a renewed focus on technical and vocational education while also rewarding companies that invest in skills and training for their workers.
Because manufacturing know-how is such an important asset, the Secretary also praised the Manufacturing Extension Partnership (MEP), which has 1,400 experts across 50 states:
The MEPs help small manufacturers get started, find partners and customers, and integrate themselves into supply chains. Notably, for every dollar we invest, the MEP program generates about 30 dollars in sales growth.
Overall, Secretary Bryson urged greater investment in "vibrant manufacturing communities throughout the nation." He touted a rebound in the manufacturing sector that could signal future job creation and also underscored some of the key benefits of a strong industrial base, including:
- On average, hourly wages and salaries for manufacturing jobs were $29.75 an hour in 2010 compared to $27.47 an hour for non-manufacturing jobs. Total hourly compensation, which includes employer-provided benefits, was $38.27 for workers in manufacturing jobs and $32.84 for workers in non-manufacturing jobs, a 17 percent premium.
- After controlling for demographic, geographic, and job characteristics, manufacturing jobs experienced a significant 7 percent manufacturing wage premium. In other words, all else being equal, workers in manufacturing tend to earn 7 percent more per hour than their counterparts in other private industries.
- Like manufacturing workers, science, technology, engineering and mathematics (STEM) workers are catalysts for innovation in the economy. Not surprisingly, there is considerable overlap between the STEM and manufacturing workforces, with nearly one-third of college educated manufacturing workers holding a STEM job.
- The educational attainment of the manufacturing workforce is rising steadily. Today, more than half of manufacturing jobs are held by persons with at least some college education.
- Manufacturing workers are more likely than other workers to have significant, highly-valued employer-provided benefits, including medical insurance and retirement benefits. Taking these into account increases the manufacturing compensation premium to 15 percent.
- The size of the premium, including or excluding benefits, increases consistently with educational attainment of a worker. Furthermore, the compensation premium has risen over the past decade across all levels of educational attainment.
Learn more about the overall benefits that manufacturing offers for the U.S. economy by clicking here.
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