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Dec 1, 201610:35 AMMaking Madison

with Buckley Brinkman

You’re missing the point on manufacturing

(page 1 of 2)

I keep reading about how we need to create more jobs in order to boost our economy. These stories miss the point that jobs are not the issue — workers are. We are missing 20 million people in the current workforce and will need every available worker — and more — to keep the economy growing. Filling this body gap means finding workers in non-traditional places. Any organization looking to grow in the future will need to engage these new sources.

We’ve done a good job addressing the skills gap — continuing to align resources to train and engage available people. Unfortunately, all that good work will not be enough as that skills gap morphs into a body gap. We need more people to fill open jobs and grow our economy. There are more open opportunities than any time since the Great Recession. The Wisconsin unemployment rate is at 4.1% and Madison’s is a microscopic 2.6% — both numbers well below full employment rates. There are over 87,000 jobs open in Wisconsin and over 5 million in the entire U.S.

These numbers foretell the front edge of the body gap and demographic trends will make the situation even worse. The Boomers are retiring, revealing the 20-million worker shortfall in Generation X. This is not just a Wisconsin or Midwest problem. The entire developed world faces the same issue: not enough workers. In this environment, traditional workforce efforts face an uphill battle because everyone needs more people.

This means we will need to find workers in non-traditional places, requiring new efforts to tap the disabled, discouraged, and chronically unemployed. These efforts require coordinated and aligned efforts from business, government, education, and community organizations in order to bring these people into the workforce. Traditional training, recruiting, and outreach approaches will not be enough to find all the workers we need. This will not be easy and requires new thinking and new approaches. Even with these new approaches, maintaining our present workforce will be a struggle.

For Wisconsin — even with a flat workforce — we will need productivity growth of 30% or more to maintain our growth. We haven’t seen productivity improvement rates like that since World War II!

It’s tough to mobilize the correct resources because the body gap looks like the skills gap, but the solutions are very different. The body gap is still about connecting skilled workers with open jobs. The important difference is that there are not enough bodies for all those openings. The skills gap actions are all necessary — but not sufficient — to address the body gap. Effective action requires a comprehensive strategy encompassing the three Ts: talent, technology, and techniques.

(Continued)

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Dec 1, 2016 01:52 pm
 Posted by  Tom C.

Most of this opinion piece affirms the notion of "business growth". But, if all healthy businesses are that way ONLY if they are growing, that, logically, just can't happen. There is something wrong with this assumption of constant biz growth as necessary for a healthy biz. This is probably why in many places, though strangely not here, we find notions like "sustainable" or "generative" businesess. Such bizs create a sustainable niche in the market place and manage that position, and if done to the highest standards, actually generate new possibilities beyond their boundaries, contributing to the commons not just to employees. Time to think beyond growth.

Dec 1, 2016 02:33 pm
 Posted by  Anonymous

I have been working on welfare to work economics and the process varies depending on the cost of living in the county - it works in some does no work in others - how your salary scales mesh with the welfare formulas and cost of living will have a major impact on your success hiring low income mothers especially. If you have hired someone at a starting wage and then when they succeeded given them a raise and they disappeared or crashed- that is probably a formula gap.

The workforce shortage is far worse than it looks and data shows an outflow of probably skilled workers in the 40-50. The state needs to put as high a priority on n infrastructure to support worker mobility- child care portable affordable health care as it does in roads.

What is at stake is critical as at some point you lose the tax base needed to support basic services. School to work programs by the way will become a lot harder to implement under the vouchers for all approach that is coming as soon you will have 2-4 schools where you now have one and they will be private with fewer resources and less leverage points (a rural 60 child school is financially feasible with deregulation)

The business community needs to start looking at these issues now as the budgets the next two years at the state and federal level will be critical. Walls may keep Mexicans out but from my experience a lot of skilled young people I know are no longer working in America.

Dec 1, 2016 04:29 pm
 Posted by  P. Buckley

Thanks for the terrific comments!

Tom C. -- You bring up an excellent point, Growth is not necessary for businesses serving a stable, niche market and growth for growth's sake can lead to disaster. For just about everyone else, it's critical to keep the economy competitive and healthy. That's especially trust when we face a declining ratio of workers to retirees in the country -- and in Wisconsin! Fewer workers will be asked to support more of the infrastructure of an aging population. If we don't grow the economy, all of our standards of living will shrink.

It's also necessary for companies to grow in order to afford the investments in technology and expertise that drive competitiveness. Stagnant companies cannot afford the tools that drive drive efficiencies.

Anonymous -- I think you did a terrific job highlighting one of the most difficult challenges facing us in the coming five years. We need everyone possible in the workforce, but there are a myriad of obstacles to making that happen. No one solution will solve the problem and you correctly point out that failing in this challenge will mean that we lose tax base.

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About This Blog

Buckley Brinkman is executive director and CEO of the Wisconsin Center for Manufacturing & Productivity and writes about the manufacturing sector in Greater Madison and throughout Wisconsin. He has a breadth of experience in helping companies drive growth, world-class competitiveness, and performance excellence, and has led efforts to save dozens of operations in the U.S. by finding new ways for them to compete. A Wisconsin native, Brinkman holds a business degree from the University of Wisconsin and an MBA from the Harvard Business School.

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