A new warning about the manufacturing labor shortage
Manufacturing in the U.S. faces a labor shortage at a scale not seen in decades, as the country's economy expands and aging workers retire — only half of whom will be replaced by new ones.
Why it matters: For the U.S. to stay competitive, experts say it must take a page from the Chinese playbook. As we’ve reported, China is investing billions in factory robots as wages rise and labor becomes more expensive.
By the numbers: A study released Wednesday by Deloitte and The Manufacturing Institute paints a dire picture of the manufacturing labor shortage.
- In the next 10 years, they expect 4.6 million new manufacturing jobs to be created, 2.4 million of which will remain unfilled because of a skills shortage.
- Nearly half of those openings will result from retirement, as baby boomers leave the workforce en masse.
- Over the course of the decade, this shortage could cost the U.S. economy $2.5 trillion.
Companies are making short-term changes, like offering higher salaries and relaxing hiring requirements, to attract skilled workers, the study found.
- Perks like remote work could lure new workers — like women and college graduates — who typically shy away from manufacturing jobs, said Paul Wellener, who leads the U.S. industrial products and construction practice at Deloitte.
- The study also calls for companies to implement training programs and hire gig economy workers to help make up the shortage.
The bottom line: In the long term, automation will help close the gap — but it will take immediate investment in robotics to get there, according to a recent report on manufacturing competitiveness from Boston Consulting Group and Carnegie Mellon University.
- "The US urgently needs a more aggressive approach to developing and adopting robotic technologies for manufacturing," the report’s authors wrote.
- Robots will help counteract several forces threatening to hold back manufacturing in the U.S.: the labor shortage, decreasing productivity, rising barriers to trade and China's swift robotization.