Study: Manufacturing in U.S. Could Need Up to 3.8 Million Workers
The U.S. manufacturing industry could require some 3.8 million jobs to be filled within the next decade, according to a new joint study from the Manufacturing Institute, the NAM’s 501c3 workforce development and education affiliate, and Deloitte.
What’s going on: “Taking charge: Manufacturers support growth with active workforce strategies” found that manufacturing in the U.S. has emerged from the global pandemic on strong footing and is likely to continue to grow in the next few years.
- That growth will call for even more skilled workers—particularly statisticians, data scientists, logisticians, engineers, computer and information systems managers, software developers and industrial maintenance technicians—spotlighting the need to build the national talent pipeline.
- “Pandemic-driven shifts have already created hundreds of thousands of new jobs, and now we are seeing increased demand for digital skills that need to be met or risk further widening of the talent gap,” said Manufacturing Institute President and Executive Director Carolyn Lee.
Key findings: Top takeaways from the report include:
- If workforce challenges are not addressed, more than 1.9 million of the up to 3.8 million jobs likely to be needed between this year and 2033 could go unfilled.
- Some 65% of manufacturers polled said attracting and retaining talent is their primary business challenge.
- About 90% said they are forming at least one partnership to better attract and retain employees, and on average they have at least four such partnerships.
- Approximately 47% indicated that apprenticeships, work study programs or internships at manufacturing companies would be the most effective way of increasing interest in the industry.
- Some 47% also said flexible work arrangements—such as flex shifts, shift swapping and split shifts—have been their top retention tool.
The bottom line: Manufacturers continue to face a talent shortage—and the MI has the initiatives and resources ready today to help manufacturers address these challenges.
- From the recent flexibility white paper—which explains how manufacturers can build and deploy flexibility options for the 49% of workers that are on the production teams—to the high school internship toolkit that allows manufacturers to start a recruiting pipeline in high schools, to the FAME USA apprenticeship program training global best multi-skilled maintenance technicians and more, the MI has solutions to the hurdles highlighted in this study. Learn more at themanufacturinginstitute.org.
Skilled Trades See Interest Uptick
More young people are choosing skilled trade jobs after high school, The Wall Street Journal (subscription) reports.
What’s going on: “Enrollment in vocational training programs is surging as overall enrollment in community colleges and four-year institutions has fallen. The number of students enrolled in vocational-focused community colleges rose 16% last year to its highest level since the National Student Clearinghouse began tracking such data in 2018. The ranks of students studying construction trades rose 23% during that time, while those in programs covering HVAC and vehicle maintenance and repair increased 7%.”
Why it’s important: The trades, including manufacturing, have experienced a worker shortage in recent years as the older generation of employees retires.
- Finding and retaining quality talent is consistently a top business challenge among manufacturers, according to the NAM’s Manufacturers’ Outlook Survey, a quarterly polling of the industry.
- But now, trade-apprenticeship demand is surging, perhaps a signal that positions will start to fill.
Perception change: For many years the vocational education wing of one high school in Sheboygan, Wisconsin, was called “greaser hall,” but lately that’s started to change, a counselor there told the Journal.
- “[B]usinesses have raised funds and donated new equipment, including robotic arms … [and] those classrooms now sit at the building’s main entrance. ‘There’s still a presumption that four-year college is the gold standard, but it doesn’t take as much work to get people to buy into the viability of other options,’ [he said].”
The last word: Indeed, the Manufacturing Institute, the NAM’s 501(c)3 nonprofit workforce development and education affiliate, is seeing significant growth in its FAME initiative, an earn-while-you-learn training program with more than 40 chapters in 16 states—and more forming all the time. FAME, which was founded by Toyota and is now led by the MI, is truly the American model of skills training, according to MI President and Executive Director Carolyn Lee.
- “FAME is training thousands of global best technicians nationwide and the number of program participants is on the rise,” she said. “This is good news for manufacturing, which sorely needs talent to continue to make the many, many things people use every day.”
Manufacturers: Walkaround Rule Exceeds OSHA’s Authority
Washington, D.C.: Following the release of the Occupational Safety and Health Administration’s recent rulemaking on the Worker Walkaround Representative Designation Process, National Association of Manufacturers Chief Legal Officer Linda Kelly released the following statement:
“Today’s rule does nothing to advance OSHA’s mission of ensuring safe working conditions. Forcing businesses to accommodate third parties with no safety expertise in their facilities infringes on employers’ property rights, invites new liabilities and introduces elements of chaos and disruption to safety inspections.
“By unlawfully expanding third-party access to manufacturers’ worksites, this proposal clearly violates OSHA’s statutory mandate to conduct inspections within ‘reasonable limits and in a reasonable manner’ with ‘minimum burden’ on employers, and potentially violates manufacturers’ constitutional rights. And, for the first time, OSHA would determine who qualifies as an ‘authorized representative’ of employees, which until now has been exclusively recognized as the jurisdiction of the National Labor Relations Board.
“This is another clear example of the federal regulatory onslaught—a proposal that upends settled precedent and ignores the reasoned decision-making required by the Administrative Procedure Act. For these reasons, the NAM will be considering legal action to reverse this incredibly destabilizing decision.”
-NAM-
The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.85 trillion to the U.S. economy annually and accounts for 53% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.
Baltimore Bridge Collapse to Hit Shipping, Port Jobs
Vessel traffic in and out of the Port of Baltimore—which contributes $15 million a day in economic activity, Business Insider reports—was suspended Tuesday after a container ship hit the Francis Scott Key Bridge in the early morning. The collision caused the bridge to collapse, sending at least seven vehicles and their occupants into the Patapsco River, according to the Baltimore Sun (subscription).
What’s going on: “Officials, who spoke amid a continuing and massive search and rescue mission, said the port was not shut down and remained open to process trucks inside terminals.”
- Other ports are likely to be able to absorb container ships headed for Baltimore, The New York Times (subscription) reports.
Why it’s important: “The port, which generates more than 15,300 direct jobs, had rebounded from global supply chain difficulties and disruptions during the coronavirus pandemic and hit records last year for handling cargo,” according to the Baltimore Sun. “It is the nation’s 16th busiest port, ranking first for volume of autos and light trucks, roll-on/roll-off heavy farm and construction machinery, imported sugar and imported gypsum.”
- Baltimore is the closest Atlantic port to major Midwestern manufacturing hubs.
- Truckers are concerned about increased congestion resulting from the closure, “particularly because deliveries such as hazardous material loads cannot travel through Interstate 895 or I-95 tunnels.” Trucking companies are already warning customers of delays for shipments going through the Mid-Atlantic, according to The Wall Street Journal (subscription).
- In addition to affecting consumers in the Baltimore area, the traffic stoppage is likely to affect jobs at the port.
Q&A: What You Need to Know on Tax Policy
Earlier this year, the House passed the Tax Relief for American Families and Workers Act, and the bill is now with the Senate to consider. NAM Vice President of Domestic Policy Charles Crain discusses what’s included in the bill, why the provisions matter to small and medium-sized manufacturers, other tax policies the NAM is focusing its advocacy efforts on and how SMMs can get involved.
Q: There is a major tax package moving through Congress. Can you explain what is included in the legislation?
Crain: “The Tax Relief for American Families and Workers Act includes three of the NAM’s top tax priorities: the ability to immediately deduct domestic R&D expenses, enhanced interest deductibility on business loans and the ability to fully deduct the cost of capital investments in the year acquired (full expensing). All three of these provisions were implemented by the 2017 Tax Cuts and Jobs Act.”
Q: What exactly are these provisions and why do they matter to SMMs?
Crain: R&D – “For almost 70 years, the U.S. tax code allowed businesses to fully deduct their R&D expenses in the same year they were incurred. But starting in 2022, businesses were required to deduct those expenses over a period of years, making it more costly to conduct R&D in the U.S.”
Interest Deductibility – “Many manufacturers need to borrow funds to finance long-term investments in equipment and facilities. The interest that businesses pay on these loans is generally tax deductible, subject to a cap. Prior to 2022, the cap was based on a company’s earnings before interest, tax, depreciation and amortization (EBITDA); now, it’s based on a company’s earnings before interest and tax (EBIT). Lowering the cap limits the amount of interest that companies can deduct—effectively imposing a tax hike on manufacturers that finance job-creating capital projects.”
Full Expensing – “Manufacturing is a capital-intensive industry. The TCJA allowed companies to immediately deduct 100% of the cost of equipment and machinery in the year purchased—called ‘full expensing.’ But full expensing began to phase out in 2023; it’s currently down to 60% and will be completely eliminated by 2027. That significantly increases the after-tax cost of capital equipment purchases.”
Q: Why is it important for Congress to restore these tax provisions for SMMs?
Crain: “These are provisions that manufacturers, especially SMMs, use to grow their businesses and compete globally. The tax code must be fair and consistent. The first step is addressing these crucial issues.”
Q: What other tax policies is the NAM focusing its advocacy efforts on?
Crain: “We are in the middle of a three-part story. If the TCJA was the first part of the trilogy, the second act is the Tax Relief for American Families and Workers Act—and the grand finale will come in 2025, when many other TCJA provisions expire. Changes that will impact SMMs at the end of 2025 include the expiration of the 20% pass-through deduction, increases in individual income tax rates and a reduction of the estate tax exemption threshold. Without congressional action, this would affect the laws in effect for tax year 2026 and beyond. For SMMs organized as corporations, the corporate tax rate could also be at risk. The NAM is already pushing back, and we know manufacturers are ready to pull out all the stops to prevent them from taking effect in 2026.”
Q: Where can SMMs find more information, and how can they get involved?
Crain: “The NAM has created online action centers for R&D, interest deductibility and full expensing with information on why these issues remain important. NAM members are encouraged to check out these action centers for tools and resources they can use to contact lawmakers on these issues. They need to hear from you! You can also reach out directly to NAM Senior Director of Tax Policy Alex Monié.”
Q: What else do SMMs need to know?
Crain: “There is an old saying in D.C.: ‘Tax bills are hard.’ We have gotten the Tax Relief for American Families and Workers Act through the House, but more work needs to be done in the Senate. And the next 20 months will be an all-out sprint to prevent damaging tax increases from taking effect at the end of 2025. The NAM was successful with the TCJA in 2017—and, I believe, will be successful both this year and next—thanks to our members. Your stories are absolutely crucial to showing that manufacturers kept our promises following tax reform’s passage—and illustrating the economic damage that will happen if R&D expensing, interest deductibility and full expensing aren’t revived this year, or if tax increases are allowed to hit SMMs in 2026. Please reach out to your membership adviser, or to Alex, to share any stories, feedback or ideas as we continue to advocate for pro-growth tax policies for manufacturers in America.”
Group Urges Ratification of Deep-Sea Mining Treaty
A group of former political and military leaders is urging the Senate to ratify the United Nations’ Convention of the Law of the Sea to kickstart U.S. deep-sea mining efforts, The Wall Street Journal (subscription) reports.
What’s going on: A draft letter seen by the Journal and signed by 331 individuals, including former Secretary of State Hillary Clinton and former Secretary of Homeland Security Michael Chertoff, calls “on Senate leaders to ratify the treaty in a bid for the country to stake its claim over areas of international waters where minerals such as cobalt and nickel, considered critical for the energy transition and in defense applications, can be sourced.”
- The treaty, which the U.S. recognized after it went into effect in 1994 but never ratified, is an international agreement governing the use of ocean resources.
Why it’s important: The treaty’s governing body, the International Seabed Authority, meets next week in Jamaica to determine “the final parts of the mining code—the set of laws and regulations that will eventually govern seabed mining. … As a nonvoting member, the U.S. has no say on laws pertaining to the seabed and also can’t be awarded exploration contracts to mine the seafloor in international waters. China currently has five.”
A groundswell: Deep-sea mining is gaining political support.
- Earlier this month, Reps. Carol Miller (R-WV) and John Joyce (R-PA) introduced a measure in support of it.
- “It’s vital to our security and economic interests that the [China]-controlled monopoly on these materials is broken,” Rep. Joyce said.
NAM: Make Employer-Sponsored Health Insurance Easier
Manufacturers are committed to providing employer-sponsored health insurance to their workers, the NAM told Congress late last week—and that’s why any changes made to the Employee Retirement Income Security Act of 1974 should facilitate rather than hamper those offerings.
What’s going on: “ERISA underpins manufacturers’ ability to provide health insurance to their employees,” NAM Vice President of Domestic Policy Charles Crain said in response to a call by the House Committee on Education and the Workforce majority for comments on how to improve ERISA as the law’s 50th anniversary nears.
- “The law allows manufacturers to provide uniform benefits to workers located across multiple states, and to tailor those benefits to meet the unique needs of their workforces.”
Why it’s important: Manufacturers have continued to offer high-quality health care plans to their employees—even absorbing cost increases in recent years to keep premiums affordable—but they “increasingly find their efforts to be responsible stewards of their health plans undermined by the complexities, bureaucracy and ineffective design of the broader health care system,” Crain told the committee.
What should be done: It is ERISA’s federal preemption of state and local laws that allows manufacturers to offer uniform health benefits, Crain continued, and that preemption must be preserved.
- “Eroding or eliminating preemption would make it significantly more difficult for manufacturers operating in multiple states to offer their employees health insurance because the manufacturer would be forced to comply with cumbersome and potentially conflicting state-based rules, a costly and untenable situation,” he said.
- In addition to maintaining ERISA preemption, Congress should seek to “make health care data more accessible and user-friendly for employer plan sponsors,” and reduce regulatory burdens on employers.
- Given that pharmacy benefit managers contribute to the increasing costs of providing employer-sponsored health care, the NAM also continues to call for PBM reform to increase transparency into these underregulated actors.
Dockworker Labor Talks to Restart Amid Tension
Contract talks between dockworkers and their employer on the East and Gulf coasts have yet to begin, but tensions are already flaring, The Wall Street Journal (subscription) reports.
What’s going on: “The International Longshoremen’s Association … is already threatening a strike against shipping companies and port employers if a deal on a new multiyear contract can’t be reached before the current agreement expires Sept. 30.”
- The ILA, which represents more than 45,000 dockworkers “at ports from Maine to Texas, has told local chapters to resolve local work issues with employers by May 17 so that a coast-wide deal can be negotiated before the current contract expires. Formal negotiations would be scheduled once the local agreements are reached.”
- Talks began in late 2022 but stalled a year ago.
The background: In September, after 14 months of often-tumultuous negotiations and several walkouts and work stoppages, West Coast dockworkers reached an agreement with their employer, the Pacific Maritime Association.
- The Biden administration stepped in to help broker that deal.
Why it’s important: “Any walkout would hit the gateways in the middle of the busiest part of the shipping season, when retailers and other importers prepare for holiday consumer sales.”
- To avoid potential delays, East Coast importers are expected to bring in holiday-season goods early this year or send more goods from Asia to the U.S. via West Coast ports.
- The large wage increases ILA is said to be pursuing could prove difficult for carriers to sustain, given the post-pandemic decline in freight demand.
Extend Pro-Growth Tax Policies, Small Manufacturer Tells Senate
If manufacturing is a team sport, the rules of the game are the U.S. tax code—and to ensure a level playing field for everyone, that code must remain constant, Ketchie President and Owner and NAM Small and Medium Manufacturers Group Chair Courtney Silver told the Senate Finance Committee Tuesday.
The main way to do it, she said, is by restoring three key tax policies: immediate expensing for domestic R&D, enhanced interest deductibility and full expensing.
What’s going on: Thanks to the 2017 Tax Cuts and Jobs Act, Silver’s family-owned, North Carolina–based precision machining company and many other manufacturers were able to grow their companies, invest in workers and give back to their communities, Silver said in testimony during the “American Made: Growing U.S. Manufacturing Through the Tax Code” hearing.
- But two years ago, “the rules of the game began to change, making it more difficult for manufacturers to thrive in America,” she went on. “Crucial policies began to expire.”
Why it’s important: If Congress does not act soon, additional pro-growth tax cuts will expire, further harming manufacturing in the U.S.
- And “more tax increases are on the way,” Silver told committee members, referring to the additional TCJA provisions scheduled to expire next year. “Other critical provisions expire at the end of 2025, which will have a direct impact on the manufacturing sector. Ketchie will be directly harmed by the loss of the pass-through deduction, the increases in our tax rates and the reduced protection from the estate tax.”
Unstoppable combination: The 2017 tax reforms, “paired with pro-growth policies like immediate expensing of capital investments, drove historic growth in the manufacturing sector,” Senate Finance Committee Ranking Member Mike Crapo (R-ID) said during the hearing, citing NAM data on the significant, positive impact of the cuts.
- Indeed, “Ketchie might not be here today if we did not have the economic boom caused by tax reform in the years prior to the pandemic,” said Silver, who called immediate expensing for domestic R&D expensing, enhanced interest deductibility and full expensing “a game-changer for the manufacturing industry.”
Team players: Congress must restore these three provisions and other critical provisions that are set to expire next year.
- “Manufacturing truly is a team sport, and you are all on that team,” Silver told the committee. “Small companies like mine are counting on you to play with us rather than against us, and to ensure that our tax code does the same.”
- The NAM has called on the Senate to advance the House-passed Tax Relief for American Families and Workers Act, which would restore the three key tax policies.
A Merck Manufacturer Leads the Way
For Alexandra Bryant-Boose, being a mentor matters—because she’s seen firsthand what good mentorship can accomplish.
From a mentor at a homeless shelter where she and her mother lived for a time, to an eighth-grade science teacher who pointed her toward a scholarship at an engineering summer program, she is grateful for all the people who helped guide her in the right direction.
- “There were so many experiences where someone gave me an opportunity,” Bryant-Boose said.
Today, as an automation specialist at Merck Manufacturing Division, part of Merck in Durham, North Carolina, Bryant-Boose is paying that opportunity forward, making sure that others are able to find their passion and achieve their dreams.
Discovering manufacturing: Bryant-Boose graduated from North Carolina State University with a degree in chemical engineering, a concentration in biomolecular engineering and a double minor in microbiology and biotechnology.
- When the COVID-19 pandemic hit, she began looking at careers at Merck, and in her words, just stumbled onto automation. After doing some research, she was hooked.
- “Automation is like playing investigative journalism or being a detective,” said Bryant-Boose. “Sometimes there’s a problem and no one will know what the issue is—and automation is about looking into the nitty-gritty, getting a little dirty and opening up a system to find what the issue is. That way of thinking and working is what makes me enjoy what I do.”
Educating young people: In 2022, Bryant-Boose launched a project designed to spread opportunities in science, technology, engineering and math to young people who might not otherwise be able to learn about those subjects.
- She started small in 2022, with a program at a local middle school. Last summer, in collaboration between the Society of Women Engineers and Durham Parks & Recreation, the project grew into a STEM summer camp with about 30 Merck volunteers.
- “We hosted 90 kids in three locations who all got that face-to-face interaction with Merck employees,” she said. “It was a lot of work to organize, but it was good to pay it forward. I’m giving kids someone to look up to and helping them figure out where they might go.”
Promoting support: Bryant-Boose is also a talent acquisition lead for the League of Employees of African Descent at Merck. The internal group, which offers both mentoring and reverse mentoring—in which younger employees provide advice and knowledge to executive team members—gives her a chance to both advise and be advised.
- “I like being able to give people advice that I wish I had,” said Bryant-Boose. “At the end of the day, it’s good to be around people who can relate to things you’re going through. And I find that LEAD allows me to do that at Merck.”
Gaining recognition: Recently, Bryant-Boose was named an Emerging Leader in manufacturing by the 2024 Women MAKE Awards, a distinction for a select few women under the age of 30 who have achieved unique accomplishments at the start of their careers in manufacturing.
Offering advice: Some of Bryant-Boose’s best advice is to encourage people— especially women—to find their own mentors.
- “I know coming into what’s historically been a male-dominated field can be intimidating,” said Bryant-Boose. “If you’re a woman considering manufacturing, or actively getting into it, find that person who can be your mentor. Claim them. Go to them when you need someone to talk to.”
Go deeper: To see the full list of 2024 Women MAKE Award Honorees and Emerging Leaders, click here. To learn more about the Women MAKE Awards, click here, and to learn more about the MI’s free Women MAKE Mentorship Program, click here or contact the team at [email protected].