Manufacturing as a Force for Good
By: Joe Sprangel
Tags: Business Strategy, Entrepreneurship, Diversity, Management And Leadership, Business

Cover Image Credit: Nicole De Khors from Burst

Reaching a Boiling Point

In a recent LinkedIn post, I reshared The US Needs a National Manufacturing Strategy for Semiconductors, an Industry Week article. The comment I included in the post read:

What is shared in this article on semiconductors is true of most industries. I had the opportunity to hear a presentation by someone with Phlow Corporation today that shared we are at significant risk on the pharmaceutical front with a major dependency on supply from China and India. Unfortunately, the government is not the answer as, from my perspective, that sector of society has failed for most of us. What one side puts in place is undone by the other party 4–8 years later. If things are going to change, my recommendation is that the business sector needs to take the lead in putting the manufacturing strategy in place for each industry and as a collective whole. We have too much potential as a nation to be collectively failing miserably in so many ways.

My comments must have resonated with others as it has seen more than 35,000 views as of the publishing of this article. I did follow the initial post with an additional comment of:

While I agree with my initial thoughts in this post, my general preference is to focus on the positive. Many groups are doing great work to include the B Team, B Corporation, Small Giants, Tugboat Institute, and many more, to do what needs to be done. I look forward to more joining these and others, making a positive impact using the power of business!!

A trend appears to be shifting to more individuals and businesses focusing on doing what is best for all stakeholders from the past singular emphasis on shareholder value. The concern is that positive actions need to be accelerated. I reached my boiling point based on recent research that yielded disturbing results and my experience of living through the current chaos on many fronts in the United States (US).

The following content will begin with difficult research findings. However, the article will end with a call to action to generate even more force for good through the manufacturing community.

A Disturbing Current State

A few numbers for you to consider:

We incarcerate 2.2 million people adults that are the highest level for any country in the world. We spend $80 billion to house these individuals, $12 billion more than education allocation. The percentage of Black Americans in prisons is 33%, although they represent 12% of the overall population.

In May of 2020, 12.4% of Whites were unemployed while all Blacks were at 16.8% and all Hispanics at 17.6%. Unemployment was even worse for Black (17.5%) and Hispanic (19.5%) women.

Women are further impacted by inequity with White women making $0.79 compared to a male $1.00 and Black women earning $0.62 and Hispanic and Latino women at $0.54.

$1.6 trillion is the amount of student debt in the United States held by 44.7 million people at an average of $32,721 student debt resulting in a monthly payment of $383.

2.6 million is the number of Baby Boomers that will be retiring in the next few years.

The United States is facing many social challenges. We will look more deeply at five of them to include: 1) incarceration, 2) unemployment, 3) the gender wage gap, 4) mounting student debt, and 5) retiring Baby Boomers, before moving on to suggested changes to improve the current state in the US.

Jails are the Incarceration Front Door

The jail system in the US houses 731,000 individuals in 3,000 jails with 11.7 million annual admissions. Sixty-percent of those in jails is ultimately never convicted of a crime. Seventy-percent experience jail time for non-violent crimes. Many of those jailed are dealing with social issues of homelessness, mental illness, poverty, school failure, and substance abuse. Furthermore, the research found that the jail system creates significant hardship that creates a downward negative cycle that is costly to the individual’s circle of influence and society.

Whether they are initially driven to prison because of a sense of hopelessness or are unable to gain viable employment post-incarceration, the reality is that non-Whites have difficulty securing substantial employment.

Unemployment and Manufacturing Employment Inequities

Education Policy Institute reviewed the state by state Q1 to Q2 2020 unemployment rates across the US. Minorities experienced a more significant negative impact stress from the COVID-19 pandemic. In Michigan, the Q1 Black unemployment rate was 7% and 35.5% in Q2. The Nevada Hispanic unemployment went from a Q1 4.6% to 30.1% in Q2. Utah had a Black to a White ratio of joblessness of 2.3:1, and Idaho a Hispanic to White ratio of 2.2:1.

While minorities are at an employment disadvantage, they join the failure of equal pay for women, regardless of race.

The Gender Wage Gap: Stated Causes for Wage Gaps

The gender wage gap continues to compensate women general unfairly and is more unjust for women of color. Some of the causes for these disparities include 1) differences in jobs & industries, 2) fewer years of experience due to stop-outs for family plans, 3) working fewer hours to accommodate caregiving or other family needs, and 4) despite being illegal since 1963, discrimination continues.

In many cases, the individuals who can pursue higher education to better their opportunity for better pay are often unable to complete the full requirements to earn a degree. However, while those that are fortunate to graduate are better off, in both cases, too often, there is a burden of high student debt.

Mounting Student Debt: Education Outpacing Wages

The college education expense is rising at eight times the wage rate per a 2018 Forbes article. Student debt is the highest overall, with US non-housing expense at $1.4 trillion, more than auto loans at $1.2 trillion, credit cards at $0.8 trillion, and others at $0.4 trillion. The current average of $32,721 in student debt results in a monthly payment of $383, which will only continue to grow if necessary change does not happen soon.

Simultaneously, as a significant increase in student debt occurs, there is a mounting problem of manufacturing employment gaps.

A Critical Employee Shortage

Research in 2018 in a partnership of Deloitte and The Manufacturing Institute found a double-digit rate in manufacturing job openings since mid-2017. The number one issue facing manufacturing executives, at a historic high of 89%, is filling the gap between available employment candidates and their plant operations’ needs.

While a brief overview of these societal issues, there is potential to address these through initiatives that will require a collective industry to step up to create a mutually beneficial stakeholder solution.

Proposed Solutions

While other business sectors can benefit those in desperate need of positive solutions to a long history of injustice, I see the most significant potential to create new paths to success in the manufacturing sector.

Keeping Them Out of Prison

We cannot undo centuries of wrongdoing, but we can make a difference in the current generation’s lives. The manufacturing sector can utilize the nested systems approach with public schools, emphasizing students in disadvantaged schools in the inner cities. Developing additional targeted opportunities for Blacks and Hispanics to work in this higher-paying sector while also providing educational support can increase job security and reduce the racial gaps. From small to large manufacturers, the industry should work collectively to break the cycle through strong high school to factory programs.

Recommendations from Successful Women in Industry

The sourcing organization Thomas interviewed six women in the industry, asking for must-read advice for those wanting to follow them. Denise Ebenhoech, regional head of advanced robotic applications for KUKA Robotics Corp, sees that things are improving where women are in higher areas of responsibility at a younger age compared to when she entered the workforce 25 years earlier. The need to lessen bias is critical for Ginger Butz, a business segment manager at The Morey Corporation. She further suggests that companies wanting to recruit women need to partner with organizations like Women in Manufacturing. Lindsey Harding, accounting manager at Stone Interiors, recommends developing training programs geared to creating opportunities for women to succeed in manufacturing. These are just a few of the many ideas shared by those already thriving in this industry.

A Return to the Past

Tuition reimbursement was an expected benefit in my industry career. During the economic downturn, this benefit was less available to employees. A recent article in Human Resource Management shares that education benefits increased significantly in the past year to 26% in 2019 after a 10% gain in 2018. In addition to employee tuition reimbursement, 4% of employers have implemented student-loan benefits increasing from 4% in 2018 to 8% in 2019 as an additional inducement to attract the job candidate pool. A VP of manufacturing once told me that they would leave for better jobs if we trained employees. Of course, that exposed other retention issues, but I found it odd that we would rather keep an uneducated workforce.

Changing a Perception

The days of unskilled, semi-skilled, and skilled employees lined up to fill open manufacturing jobs have passed by us. The sector needs to change to draw the necessary talent to serve the growing technical capabilities required to operate and maintain automation and advanced technologies. The work will require 1) technology/computer skills, 2) digital skills, 3) programming skills for robots/automation, 4) working with tools and technology, and 5) critical thinking skills. It may also require moving away from traditional work shifts, providing on-site childcare/education, and time built into the work schedule for reskilling and training to gain further traction in attracting potential employees.

Concluding Remarks

Those in the manufacturing sector looking for a noble purpose can help minority groups build more secure employment futures. A business interested in developing opportunities for those historically disenfranchised will first need to create a trust climate. Representatives of the firm will need to work with the wisdom leaders for the various populations they would like to build an employment pathway.

In some cases, there will be a need to show evidence that theirs is a workplace committed to legitimate diversity and inclusion. In others, there will be a need to work with individuals at the Department of Labor to build a Labor Certification Program that will provide a legal pathway to temporary and permanent job opportunities for Hispanics. All those recruited will need to see that paid training and education are available to advance them to higher-skilled positions that will bring associated stable employment at higher pay levels.

There is no one solution to address the issues facing the manufacturing industry. Smart organizations will enlist partners to help craft the best plan for their needs and work in concert with others in their communities to create an overall positive employment environment. They will then draw the necessary workforce to produce quality products to meet their customers’ needs promptly. The challenge is to use responsible manufacturing to create healthy households that collectively generate thriving communities. As each community improves, so does the collective US by reducing the unfavorable statistics shared earlier in this article.

Ultimately the objective needs to become an industrial economy that is restorative and regenerative. While it may seem impossible to some, it is within reach for industry leaders. The reality is we must do it as an engaged industry since our local, state, and federal governments are becoming less effective in creating positive change for the disenfranchised. While this article’s details are brief, they are part of a book I am writing to expand upon these and many other opportunities to develop a more noble purpose in the manufacturing sector. As individuals, organizations, and the collective industry, we each need to address these social injustices.

To read more on these topics, visit the blog page at https://emmanuelstrategicsustainability.com/blog/

Emmanuel Strategic Sustainability — Responsible Manufacturing |Thriving Communities |Better World