US Skilled Worker Shortage Strikes Construction and Manufacturing Sectors

us skilled worker shortage strikes construction and manufacturing sectors.jpg Business

The escalating shortage of skilled workers in America is causing a significant disruption in the construction and manufacturing sectors, impeding business operations and timely completion of projects. The construction industry reported approximately 374,000 job vacancies, and manufacturing revealed a staggering 582,000 in June 2023, according to the Bureau of Labor Statistics. Although these figures represent a decrease of around 279,000 combined openings compared to the previous year, the total still hovers near a daunting one million for these two industries out of an estimated 8.5 million open jobs across the entire economy.

The crux of the issue lies in the retiring workforce not being replaced by fresh recruits from the Millennial and Gen Z generations, who have been raised with a different perception of rewarding and meaningful jobs. "They’ve been taught that they need to learn how to code and they’ve been taught that the future is digital," says Aidan Madigan-Curtis, a partner at venture capital firm Eclipse Ventures. This deep-seated belief in the digital future, while not entirely misplaced, overlooks the critical human element required for effective human-machine interaction, thus exacerbating the talent shortage in industries that still heavily rely on skilled human labor.

America’s Skilled Worker Deficit Hits Construction and Manufacturing Industries

America’s lack of skilled workers is significantly affecting the construction and manufacturing industries, causing businesses to struggle with staffing and timely job completion. This shortage has triggered the need for a new talent pipeline for skilled workers.

Job Openings Amidst Worker Shortage

According to the Bureau of Labor Statistics job openings report for June 2023, the construction industry had around 374,000 job openings, while manufacturing had 582,000. Even though the number of job openings in these two sectors shrank by approximately 279,000 combined openings compared to a year ago, the total still remained close to one million job openings for these two sectors out of the about 8.5 million open jobs economy-wide.

The New Generation’s Career Choices

Aidan Madigan-Curtis, a partner at venture capital firm Eclipse Ventures, explains that many of the workforce engaged in these roles are retiring, and the replenishment rate is slow. The younger generation, which includes Millennials and Gen Z, seem to have a different perception of what constitutes a well-paying and meaningful job. "They’ve been taught that they need to learn how to code and they’ve been taught that the future is digital," Madigan-Curtis told FOX Business.

Rising Demand for Skilled Workers

The shortage of skilled workers is putting a strain on projects funded by the CHIPS Act, which provided $52 billion in subsidies intended to boost the U.S. semiconductor industry. The shortage of about 750,000 machinists and welders is anticipated to escalate to 2 million to 2.5 million in the forthcoming years, Madigan-Curtis added.

Addressing the Worker Shortage

Forge, a startup backed by Eclipse Ventures, aims to address the shortage of workers in skilled trades. The company operates a unique 12-week apprenticeship program where apprentices are paid to learn carpentry skills. The aim is to prepare them to join specialized crews in the field. Approximately 71% of the participants in a typical apprentice class have no prior professional trades experience, and 69% of apprentices ultimately graduate.

The Role of Apprenticeship Programs

Most graduates are hired into a full-time role with the Forge pro team, where they receive a raise, medical insurance, a 401(k) retirement plan, and other benefits. Forge’s crews specialize in areas like window installation, cabinet installation, and trim work. Mark Kasdorf, founder and CEO of Forge, pointed out that apprentices, even when leading a crew, will regularly encounter new situations that require expert help to navigate.

Conclusion and Takeaways

The shortage of skilled workers in the construction and manufacturing industries is a pressing issue that needs to be addressed swiftly. While digital skills are undeniably crucial in the current era, the importance of skilled trades cannot be overlooked. Innovative solutions like Forge’s apprenticeship program are playing a vital role in bridging this gap. However, more initiatives like this are needed to ensure these industries continue to thrive.

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