(Reuters) – Matt Arnold just spent $ 5,000 to run help-seeking ads for his company’s five trailer factories, spread out from Pennsylvania to Utah.
“We hired two of the ads,” Arnold said, just a fraction of the 125 he needs to get back to the full force of 673 workers. Half of the welding jobs at its Texas plant are open, for example, creating a bottleneck in an operation that builds trailers on metal structures.
American manufacturers have long complained about labor shortages, but last year it proved particularly frustrating.
As the pandemic put millions out of work, most service industries like hotels and restaurants, many factories accelerated due to growing demand for everything from pickup trucks to plastic bags. And yet high unemployment rates have not translated into workers flocking to vacant positions on assembly lines.
On Friday, the Labor Department said 916,000 jobs were created last month, the most since last August, including 53,000 manufacturing jobs. That was the highest number of new factory jobs in six months.
The report’s manufacturing diffusion index, a measure of the breadth of hiring in some 75 goods-producing industries, posted one of its highest readings to date.
Manufacturing employment took a much less severe hit than service sector jobs last spring when COVID-19 effectively crippled the economy. About one in 10 factory jobs was eliminated at shutdowns versus about one in six service jobs. Factory employment is 4% below pre-pandemic levels, a deficit of 515,000 jobs, compared to 5.5% of employment in the United States overall, with a total deficit since February 2020 of 8.4 million positions.
Other indicators also point to a tight labor market in factories. Earlier this week, the Institute for Supply Management said its national industrial activity index jumped to its highest reading in 37 years in March, with its manufacturing employment gauge rising to its highest since February 2018.
A fabricated metals company cited in the report said, “The lack of skilled personnel in fabrication machines and workshops” has made it difficult to keep up with demand.
UKG, which provides time management for small and medium-sized businesses, said employee shift work at US manufacturers increased 3.4% in mid-March from mid-February, outpacing a 2.6% increase in all industries.
(GRAPH – US factory hiring was broad in March 🙂
‘IT IS NOT HOME DEPOSIT’
The shortage comes at a time when the administration of US President Joe Biden has promised to increase domestic manufacturing as part of a broader economic revival plan aimed at creating more manual jobs.
“If we pass this plan, the economy will create 19 million jobs. Good works. Manual work. Good paying jobs, ”Biden said Friday after the monthly payroll report. “This is a blue collar model to increase opportunities for people.”
At the moment, however, factories across the country are seeing unfilled vacancies.
“I’ve never seen it look so bad,” said Arnold, president of Middlebury, Indiana-based Look Trailers. Look builds utility trailers, which are in high demand from small businesses such as landscapers and plumbers, as well as hobbyists who use them to haul motorcycles or other bulky sports equipment.
Lack of workers means loss of business for Arnold and his clients. One of your distributors normally has around $ 2 million in inventory on his lot, but right now he only has around $ 200,000. The median price of a trailer is $ 3,400.
Wages at its trailer factories are already well above state or federal minimums. The median starting wage is $ 19 per hour, while workers with welding skills earn $ 24 per hour or more. “People talk about the oil boom in the Dakotas – how workers would get in their cars and drive out to get jobs,” he said. “We have the same thing here, a job boom. But no one will come. “
Many employers see a mismatch between those who are now unemployed and jobs at their plants.
“It’s not Home Depot, it’s not Starbucks, it’s not a hotel,” said Kevin Kelly, CEO of Emerald Packaging Inc. in Union City, California. He estimates that one in five new workers quits within days and complains about the environment.
“They are not used to machines that need to be greased,” he said, “and the smell of ink.” Emerald produces pre-cut plastic vegetable bags, which are custom printed with images and product information.
Kelly said he has more luck hiring people who have already worked in a factory. A small printing plant just closed near him, and the owner called to ask if he wanted to buy machinery. He sent a manager who ended up submitting job applications. So far they have hired five of the other company’s employees and are trying to get two more. Yet even with those hires, Emerald is 14 years away.
Reporting by Timothy Aeppel; Additional reporting by Howard Schneider; Editing by Dan Burns and Chizu Nomiyama