By: Tracy Watson
The Demand: The State of the Manufacturing Union
In the 2011 Skills Gap study conducted by Deloitte Consulting LLP and the Manufacturing Institute of over 1,100 manufacturing executives, 83% reported a moderate to severe shortage of skilled production workers and expect this shortage to worsen over the next three to five years. The survey found that 5% of current jobs at those manufacturers who responded to the survey were unfilled due to insufficient qualified applicants. That translates to roughly 600,000 jobs that are going unfilled, despite the 12.5 million Americans out of work, as of July 2012.
The consequences of this on the industry are acutely disruptive. U.S. manufacturing has grown (Q1 2012) by 9.1% versus 1.8% for the total economy, escalating the need to clear the recruitment pipeline and rapidly bring in employees who can support the industry’s growth. In the absence of those employees, manufacturing’s growth could begin to regress. 51% of the manufacturers who responded to the Deloitte study reported difficulty in meeting consumer demand for production, 35% reported difficulty in achieving production targets, 27% reported difficulty in new product development and innovation, 24% reported difficulty implementing new technology, and 20% struggled to implement quality improvement processes, as a result of labor shortages. Furthermore, labor shortages in skilled production jobs (e.g., machinists, operators, craft workers, distributors, and technicians) and production support positions (e.g., industrial engineers, manufacturing engineers, planners, etc.) are adversely affecting their company’s ability to expand operations and improve productivity, according to 74% and 42% of the manufacturers who responded, respectively.
The Supply: Veterans in the Labor Market
As of 2011, there were 21.6 million men and women ages 18 and older who have served in our Armed Forces (approximately 2.4 million of which have served since September 2001) within our civilian population. There are more high school graduates and those who have completed some college among today’s veterans than those in earlier cohorts, according to the Bureau of Labor Statistics.
The 2011 unemployment rate for all veterans was 8.3%, below the overall unemployment rate for those who had never served in the military (8.7%), which, given the considerable challenges veterans face reentering the marketplace, is testament to their resiliency and industriousness. The unemployment rate for post-9/11 veterans – many of whom have fairly recently reentered civilian life – averaged 12.1% in 2011. The unemployment rate was 30.2% for the youngest post-9/11 veterans (those aged 18 to 24), much higher than the 16.1% unemployment rate for non- veterans in the same age group. As of May 2013, there were 1.9 million unemployed veterans.