Rock Solid Jobs
As the backbone of Minnesota’s economy, the state’s manufacturing industry continues to thrive.
BY SARAH ASP OLSON
What springs to mind when you think of manufacturing? If it’s an image of assembly line workers on a noisy, dingy shop floor mass producing the same widgets over and over, you’re not alone.
“There’s a perception that manufacturing is mass production,” says Bill Blazar, senior vice president of public affairs and business development for the Minnesota Chamber of Commerce. “In Minnesota, by and large most of our manufacturing is much more one-of-a-kind. We’re making devices or machines that are made to order and designed to solve a specific problem, which means they’ve got a lot of engineering and thinking and design work [behind them].”
Blazar says this is good news for manufacturing in the state in a world of increased outsourcing.
"It’s the kind of work that requires a lot of human interaction between customer and producer. You’re not going to do that over a long distance.”
Despite misperceptions of manufacturing, Blazar and others agree that manufacturing is alive and thriving; and it has grown to be the backbone of Minnesota’s economy.
Currently manufacturing represents about 12 percent of jobs in the state—that’s about 340,000 jobs, and just counts direct employments. Each manufacturing job created in the state supports nearly two additional jobs elsewhere in the economy. That means the manufacturing industry accounts for about 800,000 jobs in Minnesota, translating to about 29 percent of the state’s employment.
“The quality of manufacturing jobs may be the best kept secret in Minnesota,” says Bob Kill, president of Enterprise Minnesota. “As our economy regains its strength over the next couple years, it would do us all a lot of good to remember who kept the best jobs in the downturn and who will provide the jobs base on which we recover. It is manufacturing.”
Not convinced? Read on for more mythbusting on Minnesota’s manufacturing industry.
Myth: Manufacturing is a dying industry.
Fact: The manufacturing industry is bolstering the state’s economy.
In 2008, Conexus Indiana conducted a state of the industry report focused on manufacturing. The report, among other findings, showed that manufacturing is a strong and vibrant industry across the country.
“The condition of manufacturing and logistics nationwide … remains remarkably misunderstood,” the study reads.
“Despite record production levels, expanded investment and growth in both wages and productivity, the shrinking or static demand for workers results in a mistaken caricature of these industries as dying. Nothing could be further from the truth.”
Despite a drop in employment levels, 2007 was a record year for manufacturing across the United States. In fact, the
Conexus Indiana study found that national industrial production was higher than in any year prior, and continued to grow at a rate of 2.8 percent in the fourth quarter of 2007 as the economy overall slumped. Here in Minnesota, manufacturing continues to hold its own, even in a slow economy. This is especially true of the goods the state sends abroad.
“Manufactured exports continue to grow,” says Kirsten Morell, communications director for the Department of Employment and Economic Development (DEED). “Manufactured exports from the third quarter of 2007 [over] the third quarter of 2008 are up 8.6 percent.”
And while job loss continues to be an issue— Minnesota is down about 2.7 percent over the year—Morell says the losses are misconstrued. “In a lot of cases it is due to increased productivity or advances in technology,” she says.
And while nationally, manufacturing has seen job losses around 6 million from the industry’s peak in the 1970s to early 2008, industry experts agree that the dramatic losses aren’t necessarily a bad thing, just a sign of the times.
According to the Conexus Indiana study, “These job losses are overwhelmingly due to the rapid rate of total factor productivity in manufacturing, and the continuing trend of larger firms to hire specialty contractors for non-core operations. Together, these two factors have led to a smaller, more productive (and better paid) labor force.”
Myth: Manufacturing jobs are for unskilled workers.
Fact: Most of the job openings in manufacturing require technical skills and a degree.
“I think there is a perception that manufacturing work mostly takes more brawn than brain,” says Blazar. “I’m not sure it was ever true—it’s certainly not the case today. These businesses and the jobs they support require advanced training [as well as] continuous, ongoing training. Our manufacturers use state-of-the-art equipment and they require workers that have enormous skill.”
The Minnesota Skills Gap Survey conducted by DEED in 2007 found that the No. 1 factor for future success as rated by manufacturers statewide was a high-performance work force. The survey showed that most of the state is seeing serious or moderate worker shortages, often due to open high-skilled positions and no qualified applicants. To combat this, the state has ramped up efforts to encourage young people to pursue manufacturing careers and for schools and businesses to team up to create a qualified work force.
According to a 2008 article in DEED’s Minnesota Economic TRENDS, “Minnesota is providing a variety of ‘bridges’ to manufacturing careers for its young adults who want to work in the manufacturing sector. These programs help to provide these young adults with proper skill training and background to be able to fill the manufacturing jobs of the 21st century.”
One such program, the Minnesota Job Skills Partnership, was created in 1983 to pair schools with businesses. It also funds grants for training new and incumbent workers. “The grants also have gone to support lean manufacturing techniques to increase efficiency,” says Melinda Voss, public relations director for Minnesota State Colleges and Universities, which is taking steps to encourage young people to pursue jobs in manufacturing. Two of its centers of excellence provide high school and college students with resources aimed at increasing interest in manufacturing careers, especially for minority students and women.
“Many manufacturing jobs these days are skilled manufacturing jobs, which means the workers need to have some kind of formal educational training,” says Voss. “As things get more competitive around the world, the work force in Minnesota needs to be able to work as efficiently as possible.”
Myth: Manufacturing jobs are low-paying.
Fact: Manufacturing pays—big.
It’s only natural that high-skilled workers command a fatter paycheck.
“In 2007, manufacturing of computer and electronic products was where most jobs in the state resided,” says Morell.
“The average annual wage there is $71,000 per year. Following that is fabricated metal products and that pays about $50,000 per year.”
These highly technical industries are not alone. The average manufacturing employee in Minnesota earns about $49,000, 20 percent more than counterparts in other private sector industries. In addition, manufacturing accounted for about 15 percent of all wages paid (about $18 billion) in the state in 2007. On a national level, manufacturers have enjoyed steady wage increases, even through tough economic times.
“In inflation-adjusted dollars, wages have risen 26 percent over the decade ending in the fourth quarter of 2007,” says the Conexus Indiana study.
“Manufacturing is a very important part of our economy,” says Morell. “It’s a lot of jobs, it’s a lot of wages, it’s a lot of businesses, it’s a very strong presence. Overall, [manufacturing] is definitely vital to Minnesota’s economy.”