WASHINGTON (Reuters) — United States manufacturers cannot find skilled workers despite high unemployment, which means there is a need to align the nation's higher education system with the requirements of industry, lawmakers were told.
Georgetown University public policy professor Harry Holzer told a congressional hearing on manufacturing that although the sector had lost more than two million jobs during the past four years and unemployment was high among factory workers, companies were still having difficulty filling vacancies.
"The ratio of job vacancies to new hires in manufacturing is higher than we find in any other major industry group, suggesting that employers are having some difficulty filling their newly created jobs," said Holzer.
This implies that part of the unemployment problem confronting the economy is structural and will require gearing higher education to the needs of industry and encouraging companies to fully embrace on-the-job training.
Two years after the end of the 2007-09 recession, about 14.1 million Americans are still out of work. In June, 44 per cent of them had been unemployed for six months and more.
The economy has regained just under two million of the more than eight million jobs lost during the downturn. Job growth has stalled in the last two months, with employers increasing payrolls by only 43,000.
"On its own, our system of higher education will not produce enough skills needed by American workers to prosper. Our education and work force systems largely operate in isolation from one another," said Holzer, noting that dropout rates among college students were quite high.
Unable to fill some positions
BTE Technologies president Chuck Wetherington also told lawmakers his company had been unable to fill some positions.
"My job is getting a bit more technical. There are some micro and macroeconomic issues. Occasionally we have to recruit from abroad. There is a mismatch between skills and workers," said Wetherington.
Manufacturing has evolved from requiring very little skills many years ago, which guaranteed high school drop-outs a job, into a highly skilled and specialized industry.
Its dominance in the U.S. economy has waned over the years as manufacturers relocated to low-wage countries, mostly in Asia. Manufacturing's share of gross domestic product has dropped to about 11.2 per cent now from 17 per cent in 1989.
Factory jobs constitute about nine per cent of overall employment. Still, manufacturing is driving the economy's recovery from its worst recession since the 1930s.
The Obama administration and lawmakers from both sides are pushing for manufacturing to regain its key role in the U.S. economy. With wages in countries like China rapidly rising, some companies are starting to make the slow trek back home.
"I am convinced that if we do not make a concerted effort to produce the workforce needed by manufacturers that it will mean nothing less than giving up on much of the middle class, throwing in the towel on 'Made in the USA', and accepting that everything we buy will be made somewhere else," said Democratic legislator Daniel Lipinski.
But his Republican counterparts accused the government of policies that they say have stunted factory jobs.
They singled out National Labor Relations' decision in April to file a complaint against Boeing for setting up a new non-union 787 assembly plant in South Carolina.
"If President Obama is serious about relieving unemployment, he should act now to reverse his administration's confidence-shattering, job-destroying regulatory policies," said Rep. Kevin Brady.