Over the past 20 years, manufacturing has gotten a bad rap in the United States, and Information Technology (IT) is to blame. It’s not that I have an issue with IT. It has improved efficiency, enhanced our quality of life, and provided access to information. But we have slowly but surely lost much of our ability to produce manufactured products by encouraging our kids to enhance their education primarily through the development of IT skills. The fact is that the value added to the economy from the production and sale of a ‘widget’ is much greater than any service sector or IT-related product.
What happens when you go into a market and purchase an electronic product, an appliance, or anything durable? As soon as you buy it, our IT system immediately triggers a ‘make order’ to the manufacturer to replenish this stock. If the manufacturer is in the United States, that’s great. If the manufacturer is in the town where the product was purchased, that’s even better, because this causes the supply chain to jump into action. But what if the manufacturer is located overseas? What is the local benefit? Well, you have the jobs in the retail store, most of which are at or near minimum wage. And, you have the sales tax that is generated for the local government. That is why most communities love retail development. They get lots and lots of sales tax revenue. Usually, this tax revenue is used to enhance the community environment or recruit more retail. This is beneficial, but pales when compared to what the benefits would be if that widget was made in that community.
Okay, so what about the perception that manufacturing is a dirty, stinky, polluting environment with low wages and a sweat shop atmosphere? This is incorrect. Most manufacturing sites are very clean and non-polluting. Smokestacks are rare. Wages for manufacturing workers are significantly higher than the service sector, including retail. What’s more, service-sector jobs are not always less stressful or in an appreciably better setting than manufacturing jobs. I once toured a call center and was taken back by the low wages, turnover, and pressure of these jobs.
Not everyone can become an engineer or a computer scientist. How many ‘webmasters’ can there be in this world? Our ability to ‘make something’ that you can touch and feel is diminishing. It is rare to find a teenager or young adult who knows how to use tools or to calibrate machinery. The fact is this is where the jobs will be in the near future. The need for technician-level training is going to become critical very soon. These are jobs that will pay high wages. I recently heard that the Nuclear Industry is paying very large bonuses for nuclear technicians to relocate and work in their facilities. As we transition into alternative energies, it will be the hands-on technician who will be keeping the grid operating.
I also hear all the time that we can’t compete with oversees manufacturing shops when it comes to the cost of production. This is not true. A recent study conducted by the Supply Chain Systems Laboratory at Texas A&M concluded that it was less expensive to manufacture a ‘widget’ in McAllen, Texas, than it was in Reynosa, Mexico. This is because of all the ‘hidden costs,’ such as oversight, currency risk, and shipping. I will bet that this research would come to the same conclusion if we included China, Japan, and Korea in this study. This is very good news for the state of Texas, as we have a wealth of young, motivated labor candidates who only need training and education to become the best workforce in the world.
So, when thinking about your career or your child’s career, keep in mind that not everyone can get a college degree, and that there are, and will be, high-paying jobs for that young person who is inclined to be ‘hands-on’ and loves to tinker.
Gary Sera is director of the Texas Engineering Extension Service and former chairman of the Executive Council of the Texas Manufacturing Assistance Center.