"Capitalism is failing the middle class"

[wiegie]

Capitalism is failing the middle class

 

Global capitalism isn’t working for the American middle class. That isn’t a headline from the left-leaning Huffington Post, or a comment on Glenn Beck’s right-wing populist blackboard. It is, instead, the conclusion of a rigorous analysis bearing the imprimatur of the U.S. establishment: the paper’s lead author is Michael Spence, recipient of the Nobel Prize in economic sciences, and it was published by the Council on Foreign Relations.

 

Spence and his co-author, Sandile Hlatshwayo, examined the changes in the structure of the U.S. economy, particularly employment trends, over the past 20 years. They found that value added per U.S. worker increased sharply during that period – 21 per cent for the economy as a whole, and 44 per cent in the “tradable” sector, which is geek-speak for those businesses integrated into the global economy. But even as productivity soared, wages and job opportunities stagnated.

 

The take-away is this: Globalization is making U.S. companies more productive, but the benefits are mostly being enjoyed by the C-suite. The middle class, meanwhile, is struggling to find work, and many of the jobs available are poorly paid.

 

Here’s how Spence and Hlatshwayo put it: “The most educated, who work in the highly compensated jobs of the tradable and non-tradable sectors, have high and rising incomes and interesting and challenging employment opportunities, domestically and abroad. Many of the middle-income group, however, are seeing employment options narrow and incomes stagnate.”

 

Spence is neither a protectionist nor a Luddite. He prominently notes the benefit to consumers of globalization: “Many goods and services are less expensive than they would be if the economy were walled off from the global economy, and the benefits of lower prices are widespread.” He also points to the positive impact of globalization on much of what we used to call the Third World, particularly in China and India: “Poverty reduction has been tremendous, and more is yet to come.”

 

Spence’s paper should be read alongside the work that David Autor, an economist at the Massachusetts Institute of Technology, has been doing on the impact of the technology revolution on U.S. jobs. In an echo of Spence, Autor finds that technology has had a “polarizing” impact on the U.S. work force – it has made people at the top more productive and better paid and hasn’t had much effect on the “hands-on” jobs at the bottom of the labor force. But opportunities and salaries in the middle have been hollowed out.

 

Taken together, here’s the big story Spence and Autor tell about the U.S. and world economies: Globalization and the technology revolution are increasing productivity and prosperity. But those rewards are unevenly shared – they are going to the people at the top in the United States, and enriching emerging economies over all. But the American middle class is losing out.

 

To Americans in the middle, it may seem surprising that it takes a Nobel laureate and sheaves of economic data to reach this unremarkable conclusion. But the analysis and its impeccable provenance matter, because this basic truth about how the world economy is working today is being ignored by most of the politicians in the United States and denied by many of its leading business people.

 

Consider a recent breakfast at the Council on Foreign Relations that I moderated. The speaker was Randall Stephenson, chief executive officer of AT&T. Mr. Stephenson enthused that the technology revolution was the most transformative shift in the world economy since the invention of the combustion engine and electrification, leading to a huge increase in “the velocity of commerce” and therefore in productivity.

 

One of the Council of Foreign Relations members in the audience that morning was Farooq Kathwari, CEO of Ethan Allen, the furniture manufacturer and retailer. Kathwari is a storybook American entrepreneur. He arrived in New York from Kashmir with $37 in his pocket and got his start in the retail trade selling goods sent to him from home by his grandfather.

 

Here’s the question he asked Stephenson: “Over the last 10 years, with the help of technology and other things, we today are doing about the same business with 50 per cent less people. We’re talking of jobs. I would just like to get your perspectives on this great technology. How is it going to over all affect the job markets in the next five years?”

 

Mr. Stephenson said not to worry. “While technology allows companies like yours to do more with less, I don’t think that necessarily means that there is less employment opportunities available. It’s just a redeployment of those employment opportunities. And those employees you have, my expectation was, with your productivity, their standard of living has actually gotten better.”

 

Spence’s work tells us that simply isn’t happening. “One possible response to these trends would be to assert that market outcomes, especially efficient ones, always make everyone better off in the long run,” he wrote. “That seems clearly incorrect and is supported by neither theory nor experience.”

 

Spence says that as he was doing his research, he was often asked what “market failure” was responsible for these outcomes: Where were the skewed incentives, flawed regulations or missing information that led to this poor result? That question, Spence says, misses the point. “Multinational companies,” he said, “are doing exactly what one would expect them to do. The resulting efficiency of the global system is high and rising. So there is no market failure.”

 

This conclusion is a very big deal – Spence is telling us that global capitalism is working the way it should, but that the American middle class is losing out anyway. Since global capitalism is the best way we’ve come up with so far to run our economy, that creates quite a dilemma.

 

Spence is honest enough to admit that he has no easy answers. But he has posed the right question. American politicians in both parties are focused on a budget debate that is superficial, premature and ultimately about something pretty easy to figure out. Instead, we should all be working on the much bigger problem of how to make capitalism work for the American middle class.

Hard to argue with Spence's analysis. The question is: what, if anything, should be done to address it?

[matt770]

Hard to argue with Spence's analysis. The question is: what, if anything, should be done to address it?

I don't know that anything really can be done other than the gov't offering incentives to keep jobs here, which probably isn't practical. Individuals need to adapt to the new reality. Go into fields that can't be outsourced, like the trades, or retail, or health care, or aviation, etc. I've watched jobs in my company evaporate as we move more and more functions to eastern Europe. It's scary, and lots of people bitch about it, but the reality is the company is saving money and the trend will only continue. I've adapted by making connections, got my PMP certification, and moved into a role that is vital to my division and has to stay domestic. My colleagues haven't been so lucky, and more layoffs are coming.

[SEC=UGA]

I'm not sure what you do here, though, I will say that the expectations of America's middle class have changed with regard to the type of jobs that they are willing to work. Seemingly, the younger generation is above doing the work that historically created the back bone of the middle class, manufacturing. There have been numerous articles recently that manufacturing companies in the US are trying to fill roughly 300,000 manufacturing positions, but they can't find people to fill these positions. Some just refuse to work in these factories, some are too desperately stupid to fill these positions as even in manufacturing these positions have become more skilled, etc... It seems that we have become a society that would take more pride in working at Nordstrom for $14 an hour than having to tell their friends, "Yeah, I work on an assembly line for Whirlpool..."

 

I run into many issues trying to hire labor in the construction industry and actually am having some difficulty right now. Things are starting to pick up, we will be running 5 concurrent projects come June so I am trying to staff one of my crews up to 8 workers from the current 4, can't find anyone. The positions will start at $13.50 per hour w. health insurance, 401 K, and AFLAC benefits after 6 months (we cover 100% of Health Insurance costs and AFLAC costs.) No one wants to do it. I have found about 6 Mexicans, but we can't verify their status. We have had a few "Americans" call, we set up a time to interview and piss test them... They don't show up.

[SayItAintSoJoe]

I'm not sure what you do here, though, I will say that the expectations of America's middle class have changed with regard to the type of jobs that they are willing to work. Seemingly, the younger generation is above doing the work that historically created the back bone of the middle class, manufacturing. There have been numerous articles recently that manufacturing companies in the US are trying to fill roughly 300,000 manufacturing positions, but they can't find people to fill these positions. Some just refuse to work in these factories, some are too desperately stupid to fill these positions as even in manufacturing these positions have become more skilled, etc... It seems that we have become a society that would take more pride in working at Nordstrom for $14 an hour than having to tell their friends, "Yeah, I work on an assembly line for Whirlpool..."

 

I run into many issues trying to hire labor in the construction industry and actually am having some difficulty right now. Things are starting to pick up, we will be running 5 concurrent projects come June so I am trying to staff one of my crews up to 8 workers from the current 4, can't find anyone. The positions will start at $13.50 per hour w. health insurance, 401 K, and AFLAC benefits after 6 months (we cover 100% of Health Insurance costs and AFLAC costs.) No one wants to do it. I have found about 6 Mexicans, but we can't verify their status. We have had a few "Americans" call, we set up a time to interview and piss test them... They don't show up.

 

I don't think earning $13.50/hr gets you middle class status.

[SEC=UGA]

I don't think earning $13.50/hr gets you middle class status.

 

It's an entry level position that can go up to $25/30 rather quickly. Also, you are forgetting to add in the $ valu of the benefits when looking at the compensation which is included in most of what is reported with regard to wages.

 

Also, at 13.50, considering these guys will work 55+ hours per week (time and a half over time) they'll be knocking down 42K per year. That is middle class. Then lets add the $800 to $1,600 per month in insurance (we'll ball park at $1,200), that is $14,400 per year added tot he compensation. total compensation is 56,400 and you don't even need a HS diploma, just work and pass a piss test.

[WaterMan]

Manufacturing? The only jobs here are fastfood and banking. Do you live in China or are you latino UGA?

[SEC=UGA]

Manufacturing? The only jobs here are fastfood and banking. Do you live in China or are you latino UGA?

 

Columbia, SC is a sh!t hole.

[SayItAintSoJoe]

It's an entry level position that can go up to $25/30 rather quickly. Also, you are forgetting to add in the $ valu of the benefits when looking at the compensation which is included in most of what is reported with regard to wages.

 

Also, at 13.50, considering these guys will work 55+ hours per week (time and a half over time) they'll be knocking down 42K per year. That is middle class. Then lets add the $800 to $1,600 per month in insurance (we'll ball park at $1,200), that is $14,400 per year added tot he compensation. total compensation is 56,400 and you don't even need a HS diploma, just work and pass a piss test.

 

Well I didn't know about the 55+ hours a week. If you're advertising this job as one with a total starting compensation package of $56K a year and you still can't fill them then there is a problem. Have you tried offering these positions without the benies at like $16-$17/hr?

[TimC]

You broke the cycle. I'll keep it simple for the Economics Nobel Prize winners. Bob makes a part that Sam uses to make a product that Bill buys to sell that everyone in America likes to buy at a fair price. But when Charles Edward O'Reilly decides to hire Rajeev in India and Ling Ling in China to make the parts, the system here in America breaks down and Bob is suddenly unemployed and Bill can't make a living selling the product at it's discount rate and suddenly no one can buy the product no matter how cheap it is because no one has any money.

 

I hope that's not too complicated for you Nobel Prize Winnars.

 

Basically, Capitalism works best at a local level. You keep the supply and demand nearby. When you try to "globalize" it, you realize America is dragged down to their level and they really aren't brought up to our level. But the CEO has his artifically inflated golden parachute so it really matters not whether he is doing a good job for anyone, including his own Corporation or America.

[WaterMan]

Columbia, SC is a sh!t hole.

 

With it being under Republican control forever, I don't understand why the state is struggling so hard. They are anything but communist here.

[SEC=UGA]

Well I didn't know about the 55+ hours a week. If you're advertising this job as one with a total starting compensation package of $56K a year and you still can't fill them then there is a problem. Have you tried offering these positions without the benies at like $16-$17/hr?

 

Since I have a group plan any full time employee has the right to sign on to the group plan. If I raise the wage, I still have to offer them the insurance.

 

ETA : Though, we could probably do a better job in advertising potential compensation. Good idea.

Edited April 21, 2011 by SEC=UGA

[SEC=UGA]

With it being under Republican control forever, I don't understand why the state is struggling so hard. They are anything but communist here.

 

I'm afraid you are off on yer history with regard to who has been in control of SC "forever".

 

This will help

Edited April 21, 2011 by SEC=UGA

[Pope Flick]

Sounds like sec needs a lesson in capitlism: up your hourly offer and you'll find people willing to do the job. The market is clearly responding that you are low balling.

[SEC=UGA]

Sounds like sec needs a lesson in capitlism: up your hourly offer and you'll find people willing to do the job. The market is clearly responding that you are low balling.

 

McDonalds just hired close to 50K people at $8 per hour with no benefits.

 

Are the manufacturers also low balling at 22 to 35 dollars an hour?

 

ETA: I guess the one good thing is that I'll just end up subing out the labor, pay a fixed cost per foot, reduce my general liability and workman's comp by about 600%, not have to pay any payroll taxes... That and most likely the sub I hire will be using illegal labor, but hey, that's life.

Edited April 21, 2011 by SEC=UGA

[WaterMan]

I'm afraid you are off on yer history with regard to who has been in control of SC "forever".

 

This will help

 

This first paragraph is confusing.

 

Southern Democrats are members of the U.S. Democratic Party who reside in the American South. In the early 19th century, they were the definitive pro-slavery wing of the party, opposed to both the anti-slavery Republicans (GOP) and the more liberal Northern Democrats.

 

Eventually "Redemption" was finalized in the Compromise of 1877 and the Redeemers gained control throughout the South. As the New Deal began to liberalize Democrats as a whole, Southern Democrats largely stayed as conservative as they had always been, with some even breaking off to form farther right-wing splinters like the Dixiecrats. After the Civil Rights Movement successfully challenged the Jim Crow laws and other forms of institutionalized racism, and after the Democrats as a whole came to symbolize the mainstream left of the United States, the form, if not the content, of Southern Democratic politics began to change. At that point, most Southern Democrats defected to the Republican Party, and helped accelerate the latter's transformation into a more conservative organization.

 

After World War II, during the civil rights movement, Democrats in the South initially still voted loyally with their party. The signing of the Civil Rights Act of 1964, however, was the last straw for many Southern Democrats, who began voting against Democratic incumbents for GOP candidates. The Republicans carried many Southern states for the first time since before the Great Depression.

 

So they were called Democrats but we really Republicans. It seems after skin color, we get confused as to what to call ourselves.

Edited April 21, 2011 by WaterMan

[Bier Meister]

Since I have a group plan any full time employee has the right to sign on to the group plan. If I raise the wage, I still have to offer them the insurance.

 

ETA : Though, we could probably do a better job in advertising potential compensation. Good idea.

 

 

not sure how your ads read, but there is a big difference between putting something out there at $13.50/hr (not very attractive imo) vs stating:

 

- 5-15 hr of OT is expected

- bens covered fully

- advancement opportunities to double the hourly rate

[Pope Flick]

McDonalds just hired close to 50K people at $8 per hour with no benefits.

 

Are the manufacturers also low balling at 22 to 35 dollars an hour?

 

ETA: I guess the one good thing is that I'll just end up subbing out the labor, pay a fixed cost per foot, reduce my general liability and workman's comp by about 600%, not have to pay any payroll taxes... That and most likely the sub I hire will be using illegal labor, but hey, that's life.

 

 

I'd like to see a link to those manufacturing jobs that no one wants to work at in this economy. I find that somewhat difficult to believe.

 

I'm no construction worker, but if your hourly isn't twice that of McDonalds maybe people are hung up on that and aren't taking the benefits into account? As another poster stated perhaps its your advertising?

[SEC=UGA]

This first paragraph is confusing.

 

So they were called Democrats but we really Republicans. It seems after skin color, we get confused as to what to call ourselves.

 

 

Call 'em what you want, the fact is that Democrats controlled SC from the mid-1880's through 1996.

[TimC]

Call 'em what you want, the fact is that Democrats controlled SC from the mid-1880's through 1996.

 

Could you imagine Obama saying "Ask not what your country can do for you. Ask what you can do for your country"? No f'n way.

[bushwacked]

Could you imagine Obama saying "Ask not what your country can do for you. Ask what you can do for your country"? No f'n way.

 

 

When Kennedy was president the fear manipulation in our society wasn't to the point that people would have labeled him a Socialist if he encouraged school kids to volunteer.

[Savage Beatings]

McDonalds just hired close to 50K people at $8 per hour with no benefits.

 

Are the manufacturers also low balling at 22 to 35 dollars an hour?

 

ETA: I guess the one good thing is that I'll just end up subing out the labor, pay a fixed cost per foot, reduce my general liability and workman's comp by about 600%, not have to pay any payroll taxes... That and most likely the sub I hire will be using illegal labor, but hey, that's life.

 

 

It may also be that many people have another year or so of unemployment income to enjoy, and they would rather sit at home and do nothing than to work 55 hours a week for the same money.

[SEC=UGA]

I'd like to see a link to those manufacturing jobs that no one wants to work at in this economy. I find that somewhat difficult to believe.

 

I'm no construction worker, but if your hourly isn't twice that of McDonalds maybe people are hung up on that and aren't taking the benefits into account? As another poster stated perhaps its your advertising?

 

(CBS) Job openings at businesses fell to 2.54 million in June from 2.6 million in May, meaning there is now five unemployed workers on average for every job opening.

 

There's a brighter spot in manufacturing, where some companies are looking for workers, CBS News Correspondent Cynthia Bowers reports.

 

On a quick tour of her family's factory, Linda Fillingham proudly shows off employees making the metal parts that go into some of America's biggest machines.

 

What's holding her machine shop back isn't a shortage of work. Instead, it's a shortage of workers, whom she's willing to pay $13 to $18 an hour.

 

"Thirty to 40 we could use right now," Fillingham said.

 

And she's not alone. The government says there are 227,000 open manufacturing jobs, more than double the number a year ago. One hundred eighty-three thousand have been created since December, the strongest seven-month streak in a decade.

 

Fillingham said it's hard to fill these jobs because they require people who are good at math, good with their hands and willing to work on a factory floor.

 

She's had to resort to paying people to learn on the job, like 25-year-old Matthew McDannel. The average manufacturing worker is more than twice his age.

 

"Maybe the work's too hard," said McDannel. "Maybe it's too hot. Maybe people just think about it and they're just, like, 'Oh, I don't want to do that.'"

 

By the year 2012 it's estimated this country will be three million skilled workers short, and it's not just in manufacturing sector. A recent survey found 22 percent of American businesses say they are ready to hire if they can find the right people.

 

"They're dipping their toes in the water, seeing if it's the right time to hire, but you also have potential employees doing the same thing and testing that employer to see if it's the right place for them," careerbuilder.com's Jason Ferrara said.

 

Fillingham hopes to convince a new generation that manufacturing jobs aren't a part of the past but instead the foundation of the future.

 

"You need to come up to bat and play the game if you want to be in it," said Fillingham. "It's there if you want to do it."

 

 

TRAFFORD, Pennsylvania — Only half of the machines are running at Hamill Manufacturing, a precision parts maker nestled in the Allegheny Mountains just east of Pittsburgh, the city that was once the booming center of the U.S. steel industry.

 

But a shortage of business isn't the problem - indeed, Hamill has more orders than it can fill, despite a slowing U.S. economy. Rather, Hamill, like many U.S. manufacturers, is slowing production because it cannot find enough skilled workers to fill scores of jobs that require precision labor.

 

"I'd hire 10 machinists right now if I could," said John Dalrymple, president of the company, which makes high-end parts for military helicopters and nuclear submarines. "That's 8 to 10 percent of our work force."

 

While millions of American manufacturing jobs have moved to China and other low-cost countries in recent years, precision manufacturing remains a crucial niche in the United States - one that is chronically understaffed and in danger of losing even more momentum as fewer young workers train for these positions.

 

"Our work force is an aging work force," said Jeff Kelly, the chief executive, whose father founded Hamill nearly 60 years ago. "There isn't a queue of people lining up to come into the industry."

 

About 20 percent of small to midsize manufacturers in the United States - those with as many as 2,000 workers - cited retaining or training employees as their No. 1 concern, according to a survey by the National Association of Manufacturers. The survey was carried out last year but has not yet been published.

 

A separate study in 2005, the latest available, said 90 percent of manufacturers were suffering from moderate to severe shortages of qualified workers.

 

"The irony," Kelly said, "is we pay very well, we have good benefits, we have job security - and most of the companies that have survived the manufacturing recession at the early part of this decade can't find enough skilled workers."

 

A typical manufacturing job pays about $60,000 a year, according to manufacturing industry figures, a premium of about 25 percent over service industries.

 

At Hamill, a general machinist will start at $9 an hour, rising to $14.50 an hour after training, and going to $25 or more an hour for senior machinists, who can earn nearly $70,000 a year.

 

But that is not enough to attract younger workers into manufacturing, a sector that has suffered an image problem over the years, with layoffs in well-known companies like the Big Three U.S. automakers.

 

"Too few young people consider manufacturing careers and often are unaware of the skills needed in an advanced environment," the U.S. Labor Department wrote in a study on the issue.

 

Edward Lazear, chairman of President George W. Bush's Council of Economic Advisors, warns that as more and more baby boomers retire, the skills shortage will eventually cut into growth of the U.S. gross domestic product.

 

"You will start to see some decline in our growth rates as a result of these demographic factors," Lazear said during an interview. "As people start to retire, the labor market is going to not grow at the same rate that it did in the past, and it's going to affect our growth."

 

This is clearly the problem in Pennsylvania, which has been suffering from the decline and collapse of its steel giants, like Bethlehem Steel, since the 1980s, but which has openings for skilled workers.

 

"I can tell you on my desk right now, I have over 300 very high-quality job openings that I cannot fill," said Michael Smeltzer, executive director of the Manufactures Association of South-Central Pennsylvania, which coordinates job openings for that part of the state.

 

State officials concede that lower-skilled work will continue to move overseas where the pay is lower. The state has pledged $17 million to develop a skilled work force and keep the high-precision sector.

 

"We're not going to compete on the price of our labor, we're going to compete on the skill of our labor, said Sandi Vito, deputy secretary for work force development in Pennsylvania.

 

But for Smeltzer, that investment may not generate enough skilled workers to cover what he called a crisis of retirements.

 

"Why do I think it's a crisis today?" he said. "In 2010, which is right around the corner, we have this avalanche of skilled labor needs."

 

Smaller businesses, those with 200 employees or fewer, make up the bulk of the U.S. manufacturing sector, and for them the skills shortage is a crucial issue.

 

Nationally, one in four businesses says it has a vacancy it cannot fill, according to a survey by the National Federation of Independent Business, which groups both manufacturing and nonmanufacturing businesses.

 

"We could make more GDP if we could find some hands to do it," said Bill Dunkelberg, the group's chief economist.

 

At Hamill, demand for high-end, U.S.-made military parts is up, as the war in Iraq continues and the value of the dollar has decreased, making these goods less expensive for overseas buyers. But Hamill has not been able to take full advantage of the weaker dollar, and orders have been lost.

 

The company has a staff of 110, up from 85 two years ago, but potential growth has been stifled by the inability to bring new people in, Kelly said.

 

Glenn Skena, who runs Hamill's apprenticeship programs, said it took years to train workers. On average, the company will invest about $120,000 on an apprentice and often will send workers to college for training to use the computers that design the parts and direct the machines.

 

"We have a hard time hiring programmers from the outside, so we have to train them from within," Skena said.

 

Because these highly trained workers are such a commodity, wages are high. "We're quickly ratcheting up our wage scale," said Kelly.

 

But still there are not enough workers.

 

"We have spindles sitting idle because we don't have machinists to run them," Dalrymple said. A "Help Wanted" sign has been a fixture outside the factory for months.

 

http://www.in.gov/icw/files/dwyer_qualified_workers.pdf

 

http://money.cnn.com/2011/03/11/news/econo...dex.htm?iid=EAL

 

Manufacturing is far from dead, but too many young people think they've already seen the obituary.

 

That's the word from Gov. Tim Pawlenty and companies across the state who met late last week at a series of roundtables to brainstorm about how to attract and prepare reluctant young workers to what in many cases remains a high-paying field.

 

The governor, Minnesota Chamber of Commerce, Department of Employment and Economic Development (DEED) and MnSCU hosted roundtables in Rochester, Brainerd and South St. Paul to discuss potential solutions to the widespread problem.

 

Manufacturers told Pawlenty that they have jobs to offer, but can't find skilled workers or students interested in training.

 

Many young adults are passing up career opportunities with extensive training and salaries that begin at $50,000 a year, they said.

 

"It's frustrating," Pawlenty said at hydrant maker Waterous Co. in South St. Paul. "People have the mistaken impression that manufacturing's a dead industry and that we are not making anything in America anymore. That's not true. Thirteen percent of all the jobs in Minnesota are manufacturing. ... It remains a really important part of our economy."

 

Another myth plaguing the industry is that all manufacturing is "old, dark and dirty," officials said.

 

In contrast, most manufacturing is now done in modern facilities that use robotics and computers. "This is not your mother or father's manufacturing industry. This is not only about pulling the lever on a machine anymore," Pawlenty said.

 

Still, many parents dissuade children from heading to technical colleges and factory jobs.

 

DEED Commissioner Dan McElroy said that the National Association of Manufacturers is experimenting with a "Dream It-Do It!" education campaign that employs interactive game-like videos to introduce students to the topic. Students in Japan regularly use computer tablets and hand-held computer games to learn, McElroy said.

 

"We're in an age of YouTube, MySpace, Facebook and Photobucket. The way kids absorb and learn is so different today. So kids [encountering] someone just lecturing at the white board are often flat-out bored," Pawlenty said.

 

Educators from Minnesota schools, colleges and universities said they are trying other new approaches to reach prospective students and job candidates, but their audience often isn't receptive.

 

Ron Thomas, president of Dakota County Technical College, said his school used to offer a machining program. "It is unfortunate but we had to close it. We tried a number of things. We tried to partner with [a company] in California and tried offering full scholarships. For whatever reason, it just didn't work."

 

Todd Roth, director of bindery and subscription services at Thomson West in Eagan, said the same problem exits in printing. Finding apprentices and workers is difficult.

 

According to DEED, manufacturing accounts for 11 percent of all job vacancies in the state, second only to health care. There were 6,527 manufacturing jobs open in the second quarter of 2007, the most recent period for which data are available.

 

David Berg, owner of South St. Paul Steel Supply Co., said his company is now offering to pay for two years of tuition at St. Paul Technical College, which has a welders program. Skilled welders can snag $50,000 salaries.

 

The dearth of skilled job applicants is hampering Minnesota's growth and competitiveness, Pawlenty said. Domaille Engineering in Rochester could easily double the size of its fiber optics plant but can't find enough workers, he added.

 

U.S. businesses listed 3.2 million job openings in August, according to the Bureau of Labor Statistics (BLS). A year earlier, they posted 2.4 million jobs. Filling three million positions would go a long way toward helping the nation’s 14.8 million unemployed workers. Manufacturers, in particular, needed to fill 192,000 jobs in August, up from 134,000 a year earlier. Other industries, including government, education and business-services, needed more workers than manufacturers, according to BLS.

 

Dennis Winslow is hiring. And, with 10 percent unemployment, the Kennesaw machine-shop owner offers the type of relatively well-paid job that should attract legions of jobless. But there’s a problem: Winslow can’t find enough skilled workers to mill, turn, grind or assemble the metal parts needed for quick delivery to the U.S. Air Force, NASA and Lockheed Martin.

 

“There’s an old saying: ‘They’re just not making toolmakers anymore,” said Winslow, who owns Win-Tech with 38 employees. “They’re retiring or leaving the industry and people are not stepping up. Trade schools aren’t popular. People don’t consider it a sexy business. There’s just a dearth of people in the skilled trades.”

 

Indiana’s manufacturing sector has gotten better at churning out an important product recently – new jobs for Hoosiers.

 

Last week, the Wall Street Journal reported that Indiana leads the nation in job creation this year, buoyed by industrial growth. A closer look at data provided by the state’s Department of Workforce Development shows that we’ve added nearly 12,000 new manufacturing jobs in 2010 (only the broad ‘professional business services’ category has added more positions).

 

This trend is consistent with the economic forecast released by Conexus Indiana as part of our annual Manufacturing and Logistics Report Card – economists from the Ball State Bureau of Business and Economic Research predicted a sharp manufacturing recovery during the second half of 2010 and 2011. The state’s total manufacturing compensation is projected to grow by nearly $2.5 billion during this period, after falling or staying flat since mid-2007.

 

Once again, reports of manufacturing’s demise were greatly exaggerated: The recession took its toll, but every downturn brings a recovery. The domestic auto industry suffered plummeting sales, bankruptcies and bailouts – but Indiana has attracted international auto plants and seized high-tech opportunities in electric vehicles. Global competition has challenged U.S. manufacturers – but Indiana has led the nation in attracting foreign manufacturing jobs. Traditional jobs have disappeared – but high-skill manufacturing careers have emerged.

 

In short, every challenge is also an opportunity, and Indiana’s heritage of manufacturing strength and innovation prepared us to take advantage.

 

Recent positive stories like Chrysler’s $300 million investment in its Kokomo plants, EnerDel’s plans to double job creation in Central Indiana, and the recent acquisition of the vacant Delco Remy factory in Anderson by S&S Steel aren’t just isolated announcements, but part of a broader growth trend. And it’s even more remarkable because we’re starting from a higher plateau – Indiana already has the most manufacturing jobs per capita of any state in the union.

 

But we can’t afford to be lulled into complacency by good news. Long-term prosperity is achievable only if we’re willing to outwork and outthink the global competitors eager to challenge our success.

 

This means making the most of this recovery, maintaining a competitive tax climate and continuing an aggressive economic development effort to make Indiana an attractive destination for manufacturing investment. We also have to look beyond the next business cycle and concentrate on the strategic issues that will determine our competitiveness for the long-term.

 

Human capital is clearly one of these issues. Indiana’s high school graduation rate ranks in the middle of the pack, and we’re among the least-educated states in terms of college graduates in our workforce. In all, just a third of Hoosier adults hold at least a two-year degree. At a time when new manufacturing jobs demand high-tech skills and problem-solving capabilities, workers with a high school diploma (or less) just can’t make the grade. And with Baby Boomer workers retiring in greater numbers (and the average age of the Indiana manufacturing worker hovering around 50), the state faces a looming shortage of qualified employees.

 

We can’t have sustainable job growth without a parallel focus on education. Ultimately, trying to grow our economy without training our workforce only frustrates the ambitions of both the companies that can’t find skilled workers and the Hoosiers who continue to find themselves unqualified for better jobs.

 

Conexus Indiana is working with our industry and educational partners to create new training programs appropriate to emerging careers in manufacturing and logistics, while encouraging young Hoosiers to enroll in these programs through the ‘Dream It. Do It.’ marketing outreach campaign – learn more at dreamitdoitindiana.com.

 

In any business you’re always either gaining or losing momentum – for the moment, Indiana is moving forward. But to keep it up, we still need to make the education connection: Filling manufacturing jobs doesn’t mean just matching workers with empty spots on an assembly line. It means sending our workforce back to school – that’s how Indiana will keep our manufacturing edge.

Manufacturing is showing a boost in momentum as jobs jumped 49,000 after a 14,000 gain the month before.

 

http://www.businessinsider.com/jobs-openin...-hiring-2010-10

 

http://www.advancedtech.com/news.aspx?newsid=326

[SayItAintSoJoe]

It may also be that many people have another year or so of unemployment income to enjoy, and they would rather sit at home and do nothing than to work 55 hours a week for the same money.

 

or work for someone else under the table and really cash in

[WaterMan]

It may also be that many people have another year or so of unemployment income to enjoy, and they would rather sit at home and do nothing than to work 55 hours a week for the same money.

 

Being laid off is like a long vacation.

[Deathpig]

I'm not quite sure I understand how 'capitalism is failing the middle class' from this story. It sounds like capitalism is creating opportunities that aren't being taken advantage of, likely due to a number of issues (lack of requisite education, job types shifting and requiring different skills/training, blunted entreprenual initiative, etc.). Every one of those issues has a host of factors that contribute to them, making this far more complicated than the topic title would indicate.

 

 

1) The types of jobs available in America are being disrupted.

2) American workers are unprepared for that disruption.

 

I can see how you could blame capitalism on #1. I'm not sure how you really blame it on #2.