Labor and Employment

As demand for raw materials escalates, mining companies in the U.S. are struggling to find enough workers to keep up, reports The Wall Street Journal (subscription).

What’s happening: The U.S. is advancing its green-energy transition while also developing new domestic sources of minerals to decrease reliance on China.

Workforce shortage: “The overall industry’s seasonally adjusted head count shrank by nearly 39% since 1990 … according to the Bureau of Labor Statistics.”

• While colleges and universities—not to mention companies themselves—are working to fill the gap, they are not turning out new workers fast enough.
• “‘The problem is that talent isn’t lying around waiting to be paid more—there just isn’t enough of it,’ said Andrea Brickey, an associate professor of mining engineering and management at the South Dakota School of Mines & Technology.”

Get help: If you are searching for ways to attract or upskill workers, the Manufacturing Institute (the NAM’s 501(c)3 workforce development and education affiliate) has you covered. It can also help you start preparing now for manufacturing’s biggest opportunity to reach young people and prospective workers: MFG Day.

The NAM is standing up for manufacturers in courtrooms nationwide. Funded by voluntary contributions from NAM members, the NAM Legal Center is the leading voice for manufacturers in the courts, promoting manufacturing interests by reining in regulatory overreach, protecting vital manufacturing priorities and litigating on behalf of manufacturers across the United States.

As part of that work, the Legal Center brings the powerful voice of manufacturing into ongoing cases and helps shape the legal environment for the entire sector. That’s where the Legal Center’s Amicus Program comes in.

What it does: The Legal Center’s Amicus Program is focused on supporting NAM members in their litigation—whether they are pushing back against harmful rules that are impacting their operations or defending themselves in lawsuits with broader implications for the manufacturing sector.

The wins: The Amicus Program has achieved a series of critical wins for manufacturers in recent months, including the following:

• Save Jobs USA v. DHS: The Legal Center helped turn back an anti-immigration challenge in the District of Columbia, thus preserving the ability of H-4 visa-holders to work in the U.S. The victory protected manufacturing employees and their families, along with employers and the health of the overall economy.
• Brown v. Saint-Gobain Performance Plastics Corporation: The Legal Center successfully pushed back against an effort to invent a new type of legal claim for so-called “medical monitoring” that would have forced the company to compensate individuals with no current injuries. The victory protected manufacturers from unpredictable and potentially unbounded liability in New Hampshire and avoided setting a dangerous precedent that other states might follow.
• PhRMA v. Williams: The Legal Center effectively blocked an attempt by the state of Minnesota to force manufacturers to provide their products for free in a lawsuit against an insulin manufacturer. By helping defeat this effort, the NAM helped protect property rights for businesses in every sector.
• CRA v. City of Berkeley: The Legal Center stood with manufacturers in Berkeley, California, who faced a backdoor ban on gas appliances in new construction. The victory averted a regulatory patchwork and safeguarded appliance manufacturers.

The last word: “The breadth of the subject matter shows how expansive and effective the Legal Center is,” said Michael Tilghman of the NAM Legal Center. “Our national Amicus Program is addressing issues before federal and state courts ranging from government overreach to high-skilled immigration and product liability—and manufacturers can be confident that we have their backs.”

Contact us: As a member-driven program, the Legal Center pursues cases that are important to NAM members, whether they’re a party in the case or the case will have an important impact on manufacturing. To share potential opportunities for our involvement, email Tilghman at [email protected].  

The NAM is standing up for manufacturers in courtrooms nationwide. Funded by voluntary contributions from NAM members, the NAM Legal Center is the leading voice for manufacturers in the courts, promoting manufacturing interests by reining in regulatory overreach, protecting vital manufacturing priorities and litigating on behalf of manufacturers across the United States.

As part of that work, the Legal Center brings the powerful voice of manufacturing into ongoing cases and helps shape the legal environment for the entire sector. That’s where the Legal Center’s Amicus Program comes in.

What it does: The Legal Center’s Amicus Program is focused on supporting NAM members in their litigation—whether they are pushing back against harmful rules that are impacting their operations or defending themselves in lawsuits with broader implications for the manufacturing sector.

The wins: The Amicus Program has achieved a series of critical wins for manufacturers in recent months, including the following:

• Save Jobs USA v. DHS: The Legal Center helped turn back an anti-immigration challenge in the District of Columbia, thus preserving the ability of H-4 visa-holders to work in the U.S. The victory protected manufacturing employees and their families, along with employers and the health of the overall economy.
• Brown v. Saint-Gobain Performance Plastics Corporation: The Legal Center successfully pushed back against an effort to invent a new type of legal claim for so-called “medical monitoring” that would have forced the company to compensate individuals with no current injuries. The victory protected manufacturers from unpredictable and potentially unbounded liability in New Hampshire and avoided setting a dangerous precedent that other states might follow.
• PhRMA v. Williams: The Legal Center effectively blocked an attempt by the state of Minnesota to force manufacturers to provide their products for free in a lawsuit against an insulin manufacturer. By helping defeat this effort, the NAM helped protect property rights for businesses in every sector.
• CRA v. City of Berkeley: The Legal Center stood with manufacturers in Berkeley, California, who faced a backdoor ban on gas appliances in new construction. The victory averted a regulatory patchwork and safeguarded appliance manufacturers.

The last word: “The breadth of the subject matter shows how expansive and effective the Legal Center is,” said Michael Tilghman of the NAM Legal Center. “Our national Amicus Program is addressing issues before federal and state courts ranging from government overreach to high-skilled immigration and product liability—and manufacturers can be confident that we have their backs.”

Contact us: As a member-driven program, the Legal Center pursues cases that are important to NAM members, whether they’re a party in the case or the case will have an important impact on manufacturing. To share potential opportunities for our involvement, email Tilghman at [email protected].

As job growth has risen in industries that don’t require college degrees, high school graduates are increasingly going directly into the workforce, according to The Wall Street Journal (subscription).

The big number: “The college enrollment rate for recent U.S. high school graduates, ages 16 to 24, has declined to 62% last year from 66.2% in 2019.”

• At the same time, the unemployment rate for teenage workers fell to a 70-year low of 9.2% last month.

What’s happening: High school graduates are turning toward jobs that offer competitive wages, particularly in industries like manufacturing, without requiring a pricy degree beforehand.

• For example, machinists earn $23.32 an hour, above the national median wage of $22.26 an hour.
• “If you can get [a job] without a B.A. and with decent wage growth, why go get a B.A.?” as ZipRecruiter Chief Economist Julia Pollak put it.

Demand for training: Meanwhile, more young people are pursuing other forms of job training.

• “The number of apprentices has increased by more than 50%.”
• The changing economy has led to wider acceptance of forgoing college, as employers’ interest in hiring high school graduates has grown, according to Steve Boden, a supervisor at Maryland’s Montgomery County Public Schools.

What we’re doing: The Manufacturing Institute, the NAM’s 501(c)3 workforce development and education affiliate, has been training students so they can enter rewarding career paths that do not require degrees.

• FAME, founded by Toyota in 2010 and currently operated by the MI, is a work/study career pathway program that provides education, training and certifications for the Advanced Manufacturing Technician occupational track.
• If you are interested in understanding the FAME model of skills or what it takes to join or start a chapter, sign up for an informational session here.​​​​​​​​​​​​​​

The number of ships waiting to dock at the ports of Los Angeles and Long Beach is growing as labor slowdowns continue, according to CNBC.

What’s going on: “On Wednesday, six vessels were delayed at the Port of Los Angeles, while two vessels at the Port of Long Beach were at anchor on arrival—unable to interface with the port operations, according to a vessel update announced by the Marine Exchange of Southern California Vessel Traffic Service, Los Angeles and Long Beach.”

• The backlogs are the result of a long-simmering labor dispute between the International Longshore and Warehouse Union and the Pacific Maritime Association—dockworkers and their employer, respectively.
• Earlier this week, the largest terminal operator at the Port of Long Beach closed for day and night shifts, following a weekend when many longshore workers did not show up for work. Scattered labor activity has resulted in operational disruptions at ports across the coast since last Friday.

The background: The ILWU and PMA have been negotiating terms of a work contract for more than a year, and dockworkers have been operating without a contract since last July.

Why it’s important: “Data from MarineTraffic shows that vessel problems are shifting from isolated to more pervasive. Over the past 2½ months, average wait times at anchorage in LA were between a half-day to 1½ days, with service time averaging of two to five days. ‘This indicates we’ve broken past the ‘normal’ and are back into a stressed maritime supply chain,’ said Capt. Adil Ashiq, head of North America for MarineTraffic.”

• The disruptions—which come as peak inventory-building season begins for shippers—could ultimately contribute to the kind of container congestion seen during the global pandemic.

Pushing for White House weigh-in: On Wednesday, NAM President and CEO Jay Timmons urged President Biden to intervene in the negotiations and cited an economic study that found even a brief, localized port closure could cost the U.S. economy nearly $500 million a day.

• “This ongoing work stoppage will exacerbate inflation and lead to dramatic economic consequences across all industrial and consumer product sectors,” wrote Timmons. “Your leadership and intervention are needed.”

Keeping her employees happy and engaged is something Pamela Kan, president and owner of Bishop-Wisecarver, takes seriously.

And for good reason. Workforce retention is a pain point for many manufacturers and consistently cited, along with recruitment, as a top business challenge in the NAM’s Manufacturers’ Outlook Survey.

For Kan, meeting this challenge starts with getting her employees’ input—what’s on their minds, their career aspirations and the ways they think the company can improve. Then she acts on it.

Garnering feedback: To assess engagement, Bishop-Wisecarver surveys its employees and calculates an employee net promotor score, which is an internal measurement of employee satisfaction. Kan, the executive director of culture and people and department heads then discuss the areas that need improvement.

• “We share with employees where we have friction points or where things need to change,” Kan said. “We make that very visible. We then start checking these things off the list.”The company also offers employees many different opportunities to share what’s on their minds, through informal check-ins, team huddles, employee lunches and skip-level meetings.

• “Every single one of these times we are asking for feedback,” Kan emphasized. “We document it and follow up on it, because whenever you ask for feedback and you don’t then respond with changes or next-level discussions, you break the trust with your employees that you care about them.”
• “I reach out to new employees at the 60-day mark to see how it’s going,” she continued. “One actually reached out and said, ‘yeah, we need to talk.’ It was all positive. Some things he didn’t quite understand, being new [to the company], and it showed me some gaps in our onboarding process.”

Read the full story here.

Manufacturing shed 2,000 jobs in May, the second month of declines for the industry in the past quarter, according to the Bureau of Labor Statistics.

What’s going on: Manufacturing has added just 10,000 workers year to date, a significant slowdown from the 385,000 and 390,000 employees in 2021 and 2022, respectively.

• However … there were 12,984,000 manufacturing employees in May, just shy of the 12,988,000 in February, the highest number in more than 14 years.

Earnings are up: Average hourly wages of production and nonsupervisory employees in the sector increased 0.6%, from $26.03 in April to $26.19 in May.

• Manufacturing wages saw 4.9% growth in the past 12 months, which is an increase from the 4.7% year-over-year growth in April.

The bigger picture: Overall, U.S. employers added 339,000 new workers in May, an increase from April’s 294,000.

• While the U.S. economy has added 1,570,000 workers through the first five months of 2023—a strong pace—the U.S. unemployment rate increased to 3.7% in May from 3.4% in April.

​​​​​​​​​What’s up: The largest employment gains in manufacturing in May occurred in transportation equipment (up 10,500, including 6,800 for motor vehicles and related parts), electrical equipment, appliances and components (up 2,100), primary metals (up 2,000), chemicals (up 1,700), wood products (up 800) and miscellaneous nondurable goods (up 300).

What’s down: The biggest employment declines in the sector in May occurred in furniture and related products (down 4,000), machinery (down 2,400), fabricated metal products (down 2,300), printing and related support activities (down 2,000) and textile mills (down 2,000), among others.

The NAM says: In May “the labor market remained solid, with wages continuing to increase at healthy paces despite some deceleration from the 40-year highs seen last spring,” said NAM Chief Economist Chad Moutray.

The NAM is leading a coalition of business groups in advocating against a potential new overtime rule from the Department of Labor.

The background: The current overtime rule, part of the Fair Labor Standards Act, mandates that employees must receive overtime pay of at least time and a half for hours worked over 40 in a workweek.

• However, it contains certain exemptions for white-collar workers. If an employee makes a minimum amount of money or is classified as an executive, administrator or professional, they are exempt from overtime pay.

The new rule: The new rule is expected to raise the salary threshold from the current $35,568 per year.

• ​​​​​​​The change would potentially cause challenges for employers, as well as for employees who have worked to advance themselves away from hourly jobs and into salaried company positions, as the NAM has long argued.
• In addition, the widespread adoption of hybrid work brought about by the pandemic “makes compliance with potential changes to the white-collar exemptions measurably more difficult,” the coalition pointed out. New regulations may force employers to restrict these work arrangements that many workers value highly.

The last word: As the coalition told the Department of Labor, “Many businesses are not well-positioned to absorb new labor costs associated with changes to the overtime pay regulations, and such changes would only exacerbate the difficulties businesses are currently facing”—including inflation, supply chain disruptions and the aftereffects of the pandemic.

Activist shareholders from across the ideological spectrum have increasingly influenced public companies’ proxy ballots, and the Securities and Exchange Commission has unlawfully become their willing partner. That’s why the NAM has moved to intervene in a court case on the matter.

What’s going on: The NAM yesterday filed a motion to intervene in a case challenging the SEC’s authority to compel manufacturers to use their proxy ballots to speak about divisive social and political issues that are unrelated to a company’s business or long-term value.

• If granted intervenor status, the NAM will argue that the SEC’s rules requiring companies to include activist proposals on the proxy ballot violate federal securities law and the First Amendment.

The background: An activist group that holds shares in Kroger Co. sought a shareholder vote on a proposal to have the grocery chain issue a public report concerning its equal opportunity employment policy.

• Kroger sought permission from the SEC to exclude the proposal from its proxy ballot, which the SEC granted. The group has sued the SEC, accusing the agency of acting in an inconsistent and politically motivated manner.

Why it’s important: Though the SEC rejected this proposal, the agency often requires companies to publish shareholder proposals it deems to have “broad societal impact.”

• The NAM’s motion to intervene argues that the SEC’s requirement that companies publish and respond to these proposals is a violation of the First Amendment’s prohibition on government-compelled speech.
• Furthermore, federal securities law does not permit the SEC to dictate the content of company proxy statements, so the agency’s politicization of corporate governance has unlawfully federalized issues that have traditionally been governed under state corporate law.

Unnecessary—and increasing: Forcing manufacturers to take political positions on their proxy ballots drives up costs for the companies and draws needless and unwanted controversy, the NAM says. Yet, the number of activist proposals on proxy ballots is only growing.

• “In total, 682 shareholder proposals were filed for annual meetings being held through May 31,” The Wall Street Journal (subscription) reported.

How we got here: The NAM has been urging the SEC to prioritize the needs of long-term shareholders over activists’ agendas for many years.

• The NAM opposed the SEC’s guidance requiring companies to include most environmental and social proposals on their proxy ballots.
• It also urged the agency not to move forward with a proposed rule limiting companies’ ability to exclude activist proposals.

The last word: “The corporate proxy ballot is not the appropriate venue for policy decisions better made by America’s elected representatives, and manufacturers are regularly caught in the middle as activists on the left and the right bring fights from the political arena into the boardroom,” said NAM Chief Legal Officer Linda Kelly.

• “The NAM Legal Center is standing up for manufacturers to ensure they can focus on growing their businesses, driving economic expansion and job creation and creating value for shareholders.”

Activist shareholders from across the ideological spectrum have increasingly influenced public companies’ proxy ballots, and the Securities and Exchange Commission has unlawfully become their willing partner. That’s why the NAM has moved to intervene in a court case on the matter.

What’s going on: The NAM yesterday filed a motion to intervene in a case challenging the SEC’s authority to compel manufacturers to use their proxy ballots to speak about divisive social and political issues that are unrelated to a company’s business or long-term value.

• If granted intervenor status, the NAM will argue that the SEC’s rules requiring companies to include activist proposals on the proxy ballot violate federal securities law and the First Amendment.

The background: An activist group that holds shares in Kroger Co. sought a shareholder vote on a proposal to have the grocery chain issue a public report concerning its equal opportunity employment policy.

• Kroger sought permission from the SEC to exclude the proposal from its proxy ballot, which the SEC granted. The group has sued the SEC, accusing the agency of acting in an inconsistent and politically motivated manner.

Why it’s important: Though the SEC rejected this proposal, the agency often requires companies to publish shareholder proposals it deems to have “broad societal impact.”

• The NAM’s motion to intervene argues that the SEC’s requirement that companies publish and respond to these proposals is a violation of the First Amendment’s prohibition on government-compelled speech.
• Furthermore, federal securities law does not permit the SEC to dictate the content of company proxy statements, so the agency’s politicization of corporate governance has unlawfully federalized issues that have traditionally been governed under state corporate law.

Unnecessary—and increasing: Forcing manufacturers to take political positions on their proxy ballots drives up costs for the companies and draws needless and unwanted controversy, the NAM says. Yet, the number of activist proposals on proxy ballots is only growing.

• “In total, 682 shareholder proposals were filed for annual meetings being held through May 31,” The Wall Street Journal (subscription) reported.

How we got here: The NAM has been urging the SEC to prioritize the needs of long-term shareholders over activists’ agendas for many years.

• The NAM opposed the SEC’s guidance requiring companies to include most environmental and social proposals on their proxy ballots.
• It also urged the agency not to move forward with a proposed rule limiting companies’ ability to exclude activist proposals.

The last word: “The corporate proxy ballot is not the appropriate venue for policy decisions better made by America’s elected representatives, and manufacturers are regularly caught in the middle as activists on the left and the right bring fights from the political arena into the boardroom,” said NAM Chief Legal Officer Linda Kelly.

• “The NAM Legal Center is standing up for manufacturers to ensure they can focus on growing their businesses, driving economic expansion and job creation and creating value for shareholders.”

​​​​​​​NAM in the news: POLITICO (subscription) and Bloomberg (subscription) covered the NAM’s legal efforts.