The head of WMC says a shortage of skilled labor is largely to blame for manufacturing being usurped by healthcare as the state’s top employment sector, while AI-enabled automation is also entering the mix.
“Manufacturers are having difficulty finding skilled workers because of the demographic challenges we face,” Wisconsin Manufacturers & Commerce President and CEO Kurt Bauer said Friday in an interview.
While manufacturing was overtaken last year by healthcare by a margin of less than 5,000 jobs — according to preliminary figures detailed in a recent Forward Analytics report — Bauer noted it remains Wisconsin’s “economic supersector” with a $74 billion annual contribution to state GDP, compared to $42 billion for healthcare.
He added each factory job added in Wisconsin creates four jobs in other sectors of the economy. But even with that outsized impact, he noted the same demographic trends contributing to the skilled worker shortage are leading to greater demand for healthcare services as the state’s population ages.
“I do think that this trend will be difficult to reverse unless we can find more workers, so we’ve got to be able to recruit people into the state, and then of course steer young people who are in Wisconsin to stay in Wisconsin and to go into manufacturing careers,” Bauer said.
Still, the workforce challenges manufacturers are grappling with are driving further investments into automation and robotics, according to Bauer, who noted AI is helping bring down the costs of implementing these technologies.
Even as the sector becomes more high-tech, Bauer said many young people “still see it as dumb, dirty and dangerous,” skewing the perception of related careers.
“It’s high-tech, high-skill, high-pay, but yeah a lot of young people don’t know that,” he said, adding “the stigma is a shadow over manufacturing that hurts us.”
The Forward Analytics report issued last week shows employment in the paper and printing segments of manufacturing have declined 45% and 42% since 2001, respectively, driven by the rise of digital media. At the same time, employment in transportation equipment and machinery manufacturing have dropped by 37% and 22%, respectively.
Bauer attributes the trend in the latter categories to the challenge with filling highly technical roles such as aerospace engineers. He noted WMC has supported the expansion of UW-Madison’s engineering program in hopes of addressing this shortage.
“We’re trying to generate more engineers in Wisconsin … hopefully that will help and pay dividends in the future,” he said. “It is hard to recruit engineers to come to Wisconsin, so we’ve got to produce as many as we can ourselves.”
Meanwhile, report authors noted food manufacturing represents a “bright spot” for the sector as it grew by more than 27% over the study period. And the relatively small beverage and tobacco manufacturing segment still grew by nearly 150% thanks to a boom in craft breweries.
Bauer also pointed to the importance of state policy supporting manufacturing, noting the last four state budgets introduced sought to repeal the state’s manufacturing and agriculture production tax credit.
“That’s the opposite of what we need to grow the manufacturing sector and sustain it … Our policymakers need to understand that the Wisconsin economy depends on it, and it’s not just manufacturers,” he said. “It’s the vast supply chain being driven by the strength of manufacturing in Wisconsin.”
See more in an earlier story.
