With our unemployment rate edging near 10 percent, many are waiting for companies to finally rehire. I can imagine them shaking their heads when they look at the Dow's ascent in recent weeks. Somebody's making money, but it certainly isn't them.
I'm not sure if welder Charles Salak has been paying attention to the Dow, but he's been busy with home improvement projects, occasionally working for a relative, repairing farm equipment. He isn't sitting still. In August he was laid off from Katana Summit, a wind tower manufacturer in Columbus, Neb. The company had no choice. Katana is awaiting the go-head for a 200-plus tower order. Wind energy is capital-intensive, so even today, with the promise of government help, it takes time to get the green light. If and when Katana finally gets the go-ahead for the order, Salak may get his job back. But for the past few weeks he's been waiting.
New York Times reporter David Segal visited Columbus and used Salak as the centerpiece for his article, which appeared yesterday on the front page of the business section. Segal also visited Behlen Manufacturing, a metal fabricator specializing in farm products, machine tools, and custom fabrication. Especially poignant was Segal's description of idle equipment on Behlen's plant floor. Tony Raimondos Jr., son of the company president, gave the reporter a tour of the expansive, 850,000-square-foot shop floor. (If you need space, Nebraska has it.) Riding with Raimondos on a golf cart, the reporter recalled:
"Every minute or two, you come upon a couple of guys who are galvanizing metal or fabricating tubing. Mostly, it's quiet.
"'We're hopeful,' says Tony Jr., driving past an unused ... steel punching machine. 'But it's really strange to see it look like this. The other day I looked through this window in a door to the factory floor, and it was dark. During second shift.'"
Reading this, it's easy to believe manufacturing employment has dropped from 20 million in 1980 to 12 million today. That's according to Chris Kuehl, economist for the Fabricators & Manufacturers Association, International. In a recent e-newsletter Kuehl gave some interesting perspective. He quoted those employment numbers, which regularly get coverage. But other numbers he quoted rarely make their way into mainstream media. "The U.S. provides roughly 45 percent of the total value of global manufacturing ... [The U.S. produced] more than the total output of the Russian economy, and the amount of these goods that were exported are more than the total output of the Indian economy ... These are not the figures of a nation that no longer matters in the global manufacturing community."
Kuehl explained that manufacturing has never been so productive while at the same time needing fewer workers. Workers are still in demand; they're just highly skilled. But those skills complicate the relationship between politicians and manufacturing.
The issue boils down to education versus job creation. Low- or semiskilled manufacturing workers used to be the ones who fell through the cracks of the education system. But that was OK, because manufacturers provided on-the-job training. This was a politician's dream. Job creation helped the politician get elected, and at the same time he didn't have to worry about bettering education. The manufacturer was there to catch those who fell through the cracks.
Not anymore. The low- and unskilled work just isn't here, and those apprenticeships for high-skilled jobs are hard to find. Those who succeed are skilled in multiple processes and procedures, and have technical prowess or entrepreneurial drive. Generally speaking, manufacturing can't employ people who've fallen through the cracks anymore.
Being a welder, Salak certainly hasn't fallen through the cracks. He has a highly sought-after skill, and for that reason he has a better chance at landing a job quickly. But let's get real here. The fact that U.S. manufacturing is so productive doesn't mean much when you're out of a job. I suppose Salak finds some solace in that he has a skill still needed stateside, and the demand for it will only grow as credit frees up again and the wheels of commerce (and wind turbines) start turning.
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