a day ago
How To Make Manufacturing Jobs Great Again
My 19-year-old nephew Evan Craig has always had a big personality. He's voluble and super-charming. So I always thought he'd be successful in business. This summer, after completing his first year at ASU (#1 in innovation, he's fond of reminding me), he took a job with a fraternity brother selling pest control services door-to-door in a suburb of L.A. Then he took a break for a planned vacation with the whole family: a cruise of the Greek Islands on the Celebrity Infinity. But in a vivid illustration of how you can take the boy out of pest control but you can't take pest control out of the boy, he made his way to the ship's bridge and tried to sell pest control services to the captain. It went something like this:
Evan: Captain Christos, my name is Evan and I'm with a local hybrid service called White Knight. I don't know if you speak regularly with other Captains of the Celebrity fleet, but I'm already taking care of Captain Tasos of Celebrity Edge and Captain Theo on Celebrity Millennium.
Captain Christos: What?
Evan: So they've been seeing a lot of ants in staterooms, mosquitoes by the pool deck, and spiders on the bridge. The first thing we're doing for them is knocking those guys down then leaving a product up there so they don't come back. Next thing I'm doing is down here at the base. You see these cracks and crevices? Those are highways for the ants and earwigs to crawl into the wall voids and nest and breed. I'm sealing those off with a 3x3 foot power spray.
Captain Christos was impressed, although not enough to entrust his floating resort to Evan's 'local hybrid service.' But all is not lost. Evan's already convinced a host of Southern California homeowners to entrust him with their pest control needs and is on his way to making tens of thousands of dollars this summer. Which got me thinking: how is it that an charismatic 19-year-old can make this kind of money selling services when he'd only make a fraction of that amount if he'd taken a job actually making something?
It's easy to understand why the Trump Administration is prioritizing manufacturing. Thousands of small communities whose economies once revolved around plants have deteriorated to depression, drugs, and dollar stores. Occam's Razor suggests restoring the plants as the straightest line to making these towns great again. This is the logic behind President Trump's 'Liberation Day' tariffs on all imported goods, propelling dozens of countries into frantic negotiations and – eight weeks later – a federal court injunction blocking them for the time being. Undaunted, the President's principal trade adviser, Peter Navarro, continues to claim Trump's tariffs will 'fill up all of the half-empty factories.'
While these measures to revive manufacturing have gone well beyond prior Administrations (and perhaps beyond the pale), the impulse hasn't changed. As the Progressive Policy Institute's Will Marshall noted in The Hill, 'our two oldest presidents… both [of whom]
But as Matt Stewart, CEO of supply chain and procurement tech services provider RiseNow, pointed out in The Hill, manufacturing isn't what it used to be. (Disclosure: RiseNow is an Achieve Partners portfolio company.) Automation has made manufacturing so efficient that it's shrunk as a percentage of GDP and workforce pretty much everywhere, even China and India; over the past decade China lost 20M manufacturing jobs. In America, fewer than 1 in 25 workers can be found on a factory floor. Further stymying manufacturing's renaissance is that plant work isn't just dirty and physically demanding – albeit less than in prior generations – but also relatively low-paying with limited career prospects.
Back in the '50s, the great thing about manufacturing jobs was that they paid relatively well without requiring education or training. Even high school dropouts could get a job on the line. Manufacturing was a welcoming, friction-free path to the middle class. But seven decades on, neither condition appears to be true.
First, the manufacturing wage premium has disappeared. A recent Federal Reserve paper found that over the past thirty years factory workers have experienced a relative wage decline and now earn less than comparable non-manufacturing workers. That's average wage, including those who've been on the job for decades. An Indeed scan of entry-level wages for manufacturing positions like production worker or line worker shows $14-20 per hour (variations by region per cost of living) or the same range as frontline service jobs. In cautious government-ese, Fed researchers conclude that 'the conventional wisdom that manufacturing jobs are 'good jobs' is less true than it used to be.'
Second, fewer manufacturing positions are open to all. Many now involve managing advanced machines and automated systems. Manufacturing job descriptions increasingly demand degrees, certifications, and prior experience. As a result, The Economist concludes that the most similar work to the open manufacturing jobs of the 1970s isn't found in factories, but rather security jobs like TSA agents and mall cops. To which I'd add door-to-door pest control sales.
These factors explain why the number of open, unfilled manufacturing jobs is approaching 500K – a number likely to get worse before it gets better given the new Administration's equal fervor for workplace raids and deportations. And why a recent Progressive Policy Institute poll found only 13% of parents picking manufacturing as the sector with the best career opportunities for their children vs. 44% selecting higher income communications/digital economy roles. While most of America's manufacturing woes are a result of competition from China's low-wage, government-subsidized factories, part of the problem is a talent gap.
Does anyone here want these jobs?
A few years ago I was at one of countless think-tank-convened meetings on America's talent gap. Across the table, a tech executive convincingly argued that one insurmountable barrier to reshoring semiconductor and integrated circuit board fabrication is the inability to compete for advanced degree graduates in computer science or engineering with software and tech services companies, which regularly pay a multiple more. Whereas a hardware company might offer a new Ph.D $150K or $200K to start, a software company (with much higher gross margins) can win the day with a $500K package including performance pay and equity. While China and Taiwan have similar challenges – one industry observer recently told the South China Morning Post that few engineering graduates want to devote themselves to semiconductors ('students are quite realistic… the job is too hard and not that well paid') – relatively fewer software and tech services companies in those markets = less competition.
But as Evan knows, in America services + software reign supreme. Which makes it difficult for chip manufacturing to compete. Or manufacturers of anything that can be shipped across borders. I searched Indeed for advanced manufacturing 'engineer' jobs and found base salaries of $90-150K i.e., a proposition which similarly qualified candidates for tech services and software jobs would find less compelling than a pest control pitch.
Protectionism is taking a sledgehammer to America's manufacturing problem. Indiscriminate or so-called reciprocal tariffs have the potential to resuscitate factories, but with inflation and knock-on effects that make the benefits for protected sectors and workers seem as tiny as Evan's ants and spiders.
A more surgical approach is to begin with the talent gap. Do you know who's willing to work in a factory for $20 an hour? 20-something career launchers whose only alternative is similarly remunerative frontline service jobs with little to no career progression beyond the store. In contrast, manufacturers have a wider range of professional positions on site or nearby (e.g., finance, HR, QA).
So instead of overturning the economic order to rebuild Factorytown, why not start by making the manufacturing sector into a career launching pad? Here how Evan might sell it:
If you buy this, you probably agree that $20/hr plant jobs could be attractive options for 18-20-year-olds currently navigating between the Scylla and Charybdis of College or Chipotle – or College + Pest Control or Chipotle. (But seriously, if you do buy this, send me your home address so I can forward the lead to Evan.)
Contrary to conventional wisdom, manufacturing jobs aren't good jobs. But they can be good entry-level jobs. America has a large labor pool more than willing to work for reasonable wages as long as the jobs are easy to get out of school and offer a secure pathway to something better. That labor pool is floundering like never before and the level of investment required to tap it to bolster American manufacturing is a fraction of the cost of Trump's sledgehammer tariffs. By closing the talent gap we can address youth unemployment and underemployment while simultaneously providing a more competitive labor pool for American manufacturers.
If we can reduce hiring friction and establish career pathways out of entry-level manufacturing positions, hundreds of thousands of 18-20-year-olds will enter the sector, learn to show up on time ready to work, and gain valuable experience. And if manufacturing becomes a popular path for career launch, we could see:
I'm not saying that the way to compete with China's lower wages is via child labor. I'm not saying that because 18-20-year-olds aren't children. Our armed forces certainly don't think so. I am saying 18-20-year-olds can be more than college students and burrito makers. They can be America's most able-bodied, energetic workers. And if we invest in the requisite hiring, earn-and-learn, and career pathway infrastructure, everyone wins by employing career launchers to make stuff in addition to employing them to sell pest control services to homeowners and cruise ship captains.
Once we've closed manufacturing's talent gap, we should consider surgical trade barriers for strategic sectors or sectors where it's impossible to compete due to unfair foreign subsidies. But there may be no need for broad-based tariffs. In fact, if we address the talent problem first, the primary negative knock-on effect of making manufacturing great again is likely to be on colleges and universities already in need of various local hybrid services.
