After decades of factory closures and job cuts, the Covid crisis has had a surprising effect on employment prospects in US manufacturing. The supply chain disruptions caused by the pandemic prompted companies to bring their production back to America in order to avoid high shipping costs and delays.
However, as economic growth has slowed and vacancies in traditional industries have dried up, manufacturing workers have become increasingly reliant on “cleantech” jobs, which are federally subsidised, for employment.
Despite the Biden administration’s efforts to stimulate investment in new industrial projects through various acts, such as the Inflation Reduction and Chips and Science acts, many of these promised manufacturing jobs have yet to materialize. The question remains whether US manufacturing will ever experience another boom.
Some companies, including Intel, Micron, Analog Devices, and Taiwan Semiconductor Manufacturing Company, have pledged to invest over $200 billion in more than 100 projects, creating tens of thousands of jobs with the help of federal subsidies.
Despite the substantial investment in manufacturing construction, the promised jobs have been slow to appear due to raw material shortages and a lack of qualified workers. High-tech facilities require specific skills that many traditional manufacturing workers do not possess.
“Manufacturers have been a standout during the jobs recovery over the past two years, particularly over the past eight months as the skilled service economy has slowed,” says Aaron Terrazas, chief economist at Glassdoor. However, the future of manufacturing jobs remains uncertain.
During the Covid crisis, there was significant job and wage growth in manufacturing as consumer spending shifted from services to goods. By May 2022, there were more Americans working in manufacturing than before the pandemic. However, the growth has since slowed down.
Growth in manufacturing job postings on prominent job site Indeed has also slowed, indicating a decline in vacancies. The new “cleantech” jobs have yet to make up for the gap, as many projects are still in early stages.
Semiconductor companies face challenges in hiring due to the specialized skills required for their high-tech facilities. The labor market gap in the semiconductor industry is expected to leave around 58% of predicted positions unfilled by 2030. This is because there are relatively few students completing degrees in engineering and other science and technology subjects.
The complexity of these roles makes it difficult for workers to transition from traditional manufacturing to semiconductor fabrication plants. Specific programming languages and integrated circuit design skills are necessary.
Efforts are being made by chipmakers to launch their own training programs and partnerships with community colleges to address the skills gap. However, it remains uncertain whether these efforts will be enough to revitalize the manufacturing jobs market.
Some companies, like Analog Devices and Intel, are implementing their own training programs to upskill their workforce. However, the impact of these initiatives on the national level remains uncertain.
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