Massachusetts Manufacturing: A Remarkable Achievement
By Jack Healy, Director, MassMEP
A remarkable achievement is that manufacturing in Massachusetts was ranked as the second largest contributor (in chained dollars) to the state’s 2006 Gross Domestic Product, as it was in 1999. What is also remarkable is the fact that this was achieved during a period of time when manufacturing continuously held prices well below the rate of inflation.
All of this was reported in the Massachusetts FY 2009 Governor’s budget recommendations where it was indicated that manufacturing’s cumulative change on the state’s economy, when measured in chained dollars (a more accurate measure of growth), 1999-2006, was an increase of 31.3% which is almost twice the State’s total GDP rate of improvement of 16.8%.
This is great news! The downside to all of this productive growth is that the sales of the state’s manufactured products have not kept up with this newly developed production capabilities that are now in place. Unfortunately, this mismatch has been the major contributor to the loss of manufacturing jobs, as amply reported in the media during this period.
Another challenge related to this significant increase in productivity is the requirement for increased skills. In fact, the skills deficit is currently one of the more pressing problems in the manufacturing community. This gap, if not addressed, will significantly hamper the continued creation of wealth gained through increased productivity that our economy so desperately needs.
The National Association of Manufacturers 2005 Skills Gap Report stated, "The vast majority of American manufacturers are experiencing a serious shortage of qualified employees, which in turn is causing significant impact to business and the ability of the country as whole to complete in the global economy."
Regional Improvements Across the State
Since the issuance of this report, there have been a multitude of initiatives on the federal and state level to address this problem. One unique initiative undertaken by the State of Massachusetts Executive Office of Labor and Workforce Development is the implementation of the Workforce Competitive Trust Fund’s Regional Improvement Grants (WCTF). These grants, administered and supported by the Commonwealth Corporation, are structured to allow coalitions of manufacturers working through their local Workforce Investment Boards to address specific local skill development needs.
Manufacturers who are actively looking to fill their skills gaps should now be seeking out like-minded companies to form the necessary collaboratives of partners and providers.
The following article outlines the progress of recipients who received approximately $2 million in WTCTF grants to address various manufacturing regional skills improvement initiatives. The details of these grants indicate the variety of initiatives and the activities that have been undertaken and partners acquired to meet the needs of the coalitions.
While manufacturers are reminded daily of their skill needs, they should also be aware that their needs will continue to escalate as future demographics come into play. Anyone who thinks of competing for skills development as only a manufacturing community need, are mistaken.
The manufacturing community is really competing with all sectors of the economy for a limited amount of possible candidates. How serious this issue will become over the coming year is best described in the findings of "American Forgotten Middle – Skill Jobs Report" written for the Washington D.C. Workforce Alliance. They concluded that the "demands for both mid-level and high level skills are likely to grow more rapidly than their supply over the next decade and beyond."
This report makes the point that the data provided by the Bureau of Labor Statistics underplays what will be an increasing need for more broadly based basic skills education — even among workers who have achieved traditional education credentials. All of this means that job skills development will be a continuing challenge within the manufacturing community, especially if manufacturing is to continue to be a productive and growing part of our economy.
Anyone interested in joining a coalition to address skill gap issues, can contact Ted Bauer, MassMEP Skills Training Manager, at the MassMEP (508) 831-7020.
