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Speaking of Precision

Speaking of Precision is a knowledge preservation and thought leadership blog covering the precision machining industry, its materials and services. With over 36 years of hands on experience in steelmaking, manufacturing, quality, and management, Miles Free (Milo) Director of Industry Research and Technology at PMPA helps answer "How?" "With what?" and occasionally "Really?"

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Six Ideas to Reinvigorate the American Dream Through Manufacturing

Posted June 17, 2014 11:01 AM by Milo
Pathfinder Tags: career employment manufacturing

"By almost any measure the American Dream is in Peril. The robust middle class growth of the 1950′s and 1960′s began to fade in the 1970′s and the core elements of the American Dream- homeownership, (job security*), secure retirement, and building a better life for your children- steadily eroded in the decades that followed."-Milstein Symposium report, Building a Nation of Makers, June 13, 2014, Washington D.C.

The report indicates that Manufacturing remains a vital pathway to Middle Class, and achieving the American Dream.

Here are the 6 fresh, actionable ideas to expand the opportunities for middle class manufacturing jobs, restoring the American Dream developed by the Millstein commission:

  • Talent Investment loans to Expand Human Capital
  • Upside-Down Degrees to Connect Classroom Learning with On-the-Job Learning
  • A Skills Census to Build a more Efficient Skilled Labor Force
  • A National Supply Chain Initiative o Fully Map America's Manufacturing
  • Up-Skilling High School Students with Expanded Technology and Engineering Certification Programs
  • A "Big Trends- Small Firms initiative to Diffuse the Latest Technologies to Manufacturing SME's

Together these recommendations wield tremendous transformative potential.

These ideas are actually able to be done. They address remediable issues in the manufacturing ecosystem- outside of politics, which appear to be in perpetual gridlock.

These ideas are implementable. In future posts, I hope to show how in fact these are actually part of the existing work product of PMPA, and how the identification of these by the Commission validates our work and strategic plan.

These ideas add value. PMPA has been involved in skilled workforce in manufacturing actively since the President first convened the Presidents Council on Jobs and Competitiveness (PCJC), and ongoing through our work with other organizations including MFG Day and Business Leaders United, various community colleges and others. Yet, there are ideas in the Symposium's report that are new and worth trying.

Next post: Talent Investment Loans to Expand Human Capital

* I added job security- MKF



Editor's Note: CR4 would like to thank Milo for sharing this blog entry.

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#1

Re: Six Ideas to Reinvigorate the American Dream Through Manufacturing

06/18/2014 7:10 AM

Thanks for that Milo.

As you say the 6 ideas are actionable but to achieve the dream for the masses then there needs to be masses employed....modern manufacturing seems to not need these masses, at least not for the high ticket items that make manufacturing in a mature economy attractive to investors.

I'm in favour of any initiatives that make folk smarter and more useful. Not sure if the volume is there to get the numbers (proportionally) living the dream to anywhere near where it was in the post WW2 decades....the agenda and demographics of the USA was quite different back then.

I look forward to your next installment.

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#3
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Re: Six Ideas to Reinvigorate the American Dream Through Manufacturing

06/18/2014 7:48 AM

I agree.

The root of the problem is the reinvention of business in the 1970s and 1980s. The changes forced businesses to adopt practices that ultimately saved them from faltering, but also changed the model by which people were employed.

Previously, middle class workers had a reasonable expectation to leave high school or college, find a job, and stay in that job most of their working life with a good retirement pension. It was expected that one's earnings would steadily increase as they put more time into their careers.

This allowed people to borrow the money needed to buy a home and two cars with a very reasonable expectation that they would continue to gain more financial income as the years went by.

I remember this as I grew up. It wasn't always easy, but the middle class was buoyed by a raising tide of steady income.

The problem with that model was that businesses spent a large portion of their profits supporting salaries and pensions and could not compete with foreign business models that trimmed their workforces and benefits to keep competitive.

As a result, job security was no longer assured and workers found themselves changing jobs more often and relocation to stay afloat. Unfortunately, the idea of a steady growth of income was no longer assured.

The problem only got worse as time went on and businesses continued to evolve to meet the demands of the modern world and consistent employment became harder and harder to find.

There are many other factors here, such as the increase in globalization and changing needs of that global market, but the result was a much different workplace than it was 40 to 50 years ago when the American Dream was solidly perched on a dependable employment model of steady income increases.

Fortunately, I entered engineering, which has always fared better than most other career choices and even though engineers tended to migrate to newer jobs every 5 or so years, the demands for engineers has always been high. This provided a venue for income increases as time went on and skill sets improved.

The problem with the idea of training people and expecting them to find gainful employment is that there simply not enough positions available to absorb candidates. While manufacturing is moving back on shore, it is not enough to drive a market to absorb the 10s of millions of people that need or want work in an industry that is doing more with less human resources.

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#6
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Re: Six Ideas to Reinvigorate the American Dream Through Manufacturing

06/18/2014 11:32 AM

This seems to be the intractable problem of maturing capitalism. Capitalism appears to lack any desirable/healthy late stage/mature age.

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Innovations drive increases in productivity that result in the average worker being able to produce an equivalent of far more than they can afford. There is no credible end to increases in productivity on the horizon, so things will likely continue to become more unbalanced.

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When the equivalent amount produced in a lifetime by the average worker exceeds the amount that might be reasonably used in the average workers life, there will be no reasonable opportunity for gainful employment for a percent of the potential workforce in proportion to the productive excess. There is some indication that this may have already occurred.

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I'm not trying to denigrate capitalism, just to point out some realities. I don't even have a suggestion for a viable alternative. Perhaps others have some ideas.

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#10
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Re: Six Ideas to Reinvigorate the American Dream Through Manufacturing

06/18/2014 9:00 PM

That's an interesting observation.

The flip side is that a huge sector of the workforce actually works in the service industry, too.

US government statistics only 20.3% of the US workforce is in the manufacturing sector.

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Re: Six Ideas to Reinvigorate the American Dream Through Manufacturing

06/19/2014 2:57 AM

Service sector is no different. There are only so many services the average worker can need/utilize in a lifetime, including all the B2B services needed to produce everything else consumed, whether it me tangible or not. The service industry continues to see profound increases in productivity, just like every other industry.

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It is a confounding problem, and I believe some of the consequences might have all the general predictability but specific unpredictability of a large market correction; with all the attendant suddenness and relentlessness, only with the possibility of being far more severe and far reaching.

.

.

Hmm. Not very a pleasant thought.

.

Perhaps I can balance things out a little. Here are some pictures of an okapi flaunting its prehensile tongue.....incidentally the okapi's prehensile tongue along with its lack of a spleen were the hints that led researchers to hypothesize okapis were closely related to giraffes.

.

.

.

.

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#15
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Re: Six Ideas to Reinvigorate the American Dream Through Manufacturing

06/19/2014 3:37 PM

Those photos make me jealous in ways I'm uncomfortable articulating.

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#2

Re: Six Ideas to Reinvigorate the American Dream Through Manufacturing

06/18/2014 7:41 AM

Just a thought. You ever think in the time frame you stated that one cause could be our entertainment media. TV produced a lot of shows with doctors, lawyers or lawmen. So entertainment idolized these professions. Even shows that were not of those subjects the people work those jobs. If not those profession very few would work in any aspect of manufacturing.

Our entertainment media just never glorified aspects of a job in manufacturing.

Best I can remember is them making a joke of it. Like Lucie putting candies in a box.

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#4
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Re: Six Ideas to Reinvigorate the American Dream Through Manufacturing

06/18/2014 8:01 AM

Not so much. Historically, we have seen a huge transition from when businesses would employ more people than they really needed and still pay fat pensions. It was nice while it lasted, but was totally unsustainable as global markets changed.

In the 1950s and 1960s parents tended to make fewer job changes with virtually no need for forced career changes. When you exited school you joined a company and tended to stay with that company until you retired.

Now, when you leave school and can hopefully find a job you are lucky to stay 5 years before you have to find another job. That makes it basically impossible to become vested in a pension and remain in a middle class lifestyle.

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Re: Six Ideas to Reinvigorate the American Dream Through Manufacturing

06/18/2014 11:26 AM

Not even Laverne & Shirley?

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#7
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Re: Six Ideas to Reinvigorate the American Dream Through Manufacturing

06/18/2014 2:33 PM

They had jobs? I thought they just had misadventures.

I remember part of the opening credits was them putting a glove on a beer bottle i an assembly line and waving bye-bye to it, but I don't remember any other scenes in the show that made manufacturing work look 'cool.'

(And in the modern era of Food Safety, when they put that glove on that beer, what they were waving goodbye to was their jobs. That would be considered 'deliberate contamination of Product' today.)

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Re: Six Ideas to Reinvigorate the American Dream Through Manufacturing

06/18/2014 9:43 PM

I remember that glove on a bottle being waved goodbye.

How cool would it have been if the resulting downline catastrophe in waiting was featured in that show?

Engineers and spanner twirlers, butt cracks in the air, cussing out that stupid so and so....glamourous.

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Re: Six Ideas to Reinvigorate the American Dream Through Manufacturing

06/19/2014 11:26 AM

Yeah, it's a stretch but other than Fred working in a quarry, or George manufacturing sprockets, I was at a loss.

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#8

Re: Six Ideas to Reinvigorate the American Dream Through Manufacturing

06/18/2014 2:59 PM

One of the things that needs to be considered here is that we no longer are in the Industrial Age. The dynamics and needs of busniess ownership and operation have changed dramatically, much to the detriment of manufacturing.

There are many factor for that I believe; one being union involvement which partly leads to rates of pay higher than the value of work being done. The new policy in Seattle which requires $15/hr for min. wage jobs will only drive companies to find ways to provide the product or service without the manpower. Another problem is egregious taxation policy which makes it harder for businesses, large and small alike, to operate at a profit. I think I heard the US has the highest business tax rates in the world. Is it any wonder businesses go where the business environment is more friendly? Why put up with all the crap from government here, by way of taxes, OSHA, EPA regulations, etc.?

A healthy economy, in any time of history and any where in the world, has always existed when small busiensses thrive. Entrepreneurs find ways to meet needs in ways that are very profitable. The more brainpower you have directed to business the better off we all will be.

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#9
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Re: Six Ideas to Reinvigorate the American Dream Through Manufacturing

06/18/2014 4:00 PM

"A healthy economy, in any time of history and any where in the world, has always existed when small busiensses thrive." (Emphasis added)

Perhaps that is the heart of the situation, we have allowed Big Businesses to grow too large, these mega-corporations are now actively crushing the ability of small businesses to even exist, much less thrive.

Maybe our 'Global Civilization' is past due for a Fall. Eliminate the global transport of goods and raw materials, leave each area limited to what the local skills can produce and develop, people no longer need to compete with countries halfway across the globe for jobs, because the people halfway across the globe can't do the job where it needs to be done.

It may be a hard, bleak future, but you know who will be looked to for advice, for the skills needed to rebuild the villages from the ruins of the cities?

Engineers.

We Engineers will be so in demand, we'll be hotter than Rock Stars.

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#13
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Re: Six Ideas to Reinvigorate the American Dream Through Manufacturing

06/19/2014 5:32 AM

Mega-organizations, whatever the structure, introduce hard to predict, hard to correct/remove, formidable risks. Decisions like Citizens United continue to set up a two class society, relegating natural breathing citizens to second class status. You are certainly right, this problem needs attention, and for a number of reasons.

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Another significant impediment to prosperity is our tax structure. Taxes and government bloat are definitely out of hand, but the form the taxes take also needs significant change.

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Among other purposes like funding government expenditures, taxes are a strong control in the form of a disincentive, which could be used more advantageously.

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Currently, taxes in the US target and thereby provide disincentive for, personal income, corporate profits, paying employees, realization of capital gains, as well as places where the effect is felt as often, such as developing and implementing a winning blackjack strategy, successfully breeding and raising a winning thoroughbred, or honing luck sufficiently to hit the lottery.

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The problem is that saddling one group or action with a disincentive or special assigned burden effectively puts a virtual incentive on ll other groups or actions.

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While this probably doesn't dampen desire to be lucky or attempts to beat the casino too much, real and significant effects are undeniable even in personal income. Similarly corporate profits and capital gains realization are actively delayed/damped.

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The most noticeable and among the most harmful is the disincentive created by the payroll tax. A payroll tax is something that should be used if the economy had somehow been overrun by an explosion of rampant jobs....a rarefied prospect given the current state of affairs. Until employment can be nurtured back to a sustainable population, all forms of job destruction like payroll tax should be on indefinite moratorium.

.

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A cursory assessment of our current remaining strengths suggests we are not playing to these. Certain sectors of manufacturing in the US were known for producing very few defects. While the same is true today, it is no longer a strength since we aren't manufacturing much, defects or otherwise.

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Two things that are often portrayed as liabilities might better be viewed as profound advantages: the American second to none appetite for continual overt consumption, and the fearlessness with which we explode the currency base yet maintain a straight face when we suggest value and stability in the dollar.

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Access to the American consumer is incredibly valuable, yet our tax structure is worse than a free-for-all, it actually burdens the products of the companies that dare to make a profit in this country or hire workers in this country. Companies that don't pay US workers don't have to price their products to pay for all the upkeep of the American consumer.

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Switching to a consumption based tax would shift the burden of SSI, Medicare, Defense, and other programs from being only on US companies employing US citizens to anyone reaping the benefits of accessing the American consumer.

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One last quick thing. We have been taking a lot of flack about our currency and debt instruments. It would be better if we quit acquiescing about our formidable productivity in the currency and debt instrument sectors, being something to apologize for. We could take a lesson from China on this one.

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China makes no apologies for the cornucopia of low quality trinkets they sell to us at prices far over realistic worth. The US should make no apologies about continuing to expand the money supply and issue debt instruments just as fast as tanker trucks full of ink can deliver. The quality and value of our debt instruments shouldn't bother the Chinese anymore than the quality and value in any of those plastic trinkets. Churning out crap, whether paper or plastic, might not be something you would want to aspire to, but it does keep the economy churning.

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