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By Timothy Aeppel
(Reuters) – Matt Arnold just spent $ 5,000 running wanted ads for his company’s five trailer factories scattered from Pennsylvania to Utah.
“We hired two from the ads,” said Arnold, who is only a fraction of the 125 he needs to find his 673 employees. Half the welding jobs at its Texas plant are open, for example, creating a bottleneck in an operation that builds trailers on metal frames.
US manufacturers have long complained about labor shortages, but the past year has been particularly frustrating.
As the pandemic has pushed millions out of work, most service industries such as hotels and restaurants, many factories have been pushed to overdrive by growing demand for everything from vans to plastic bags. And yet, high unemployment rates have not translated into an influx of workers to open jobs on the assembly lines.
The Labor Ministry said on Friday that 916,000 jobs were created last month, the highest number since last August, including 53,000 jobs in manufacturing. It was the highest number of new factory jobs in six months.
The report’s manufacturing diffusion index, a measure of the breadth of hiring in some 75 goods-producing industries, posted one of its highest values on record.
Manufacturing jobs suffered a much less severe blow than service jobs last spring when COVID-19 effectively crippled the economy. About one in 10 factory jobs were cut during the shutdowns, compared to about one in six jobs in the services. Factory employment is 4% below pre-pandemic levels, a deficit of 515,000 jobs, compared to 5.5% for all employment in the United States, with a total deficit from of February 2020 of 8.4 million positions.
Other indicators also point to a tight labor market in factories. Earlier this week, the Institute for Supply Management said its index of domestic factory activity reached its highest level in 37 years in March, with its manufacturing employment indicator hitting its highest. level since February 2018.
A metal fabrication company cited in the report said, “A lack of qualified personnel in machinery and fabrication shops” has made it difficult to meet demand.
UKG, which provides time management for small and medium-sized businesses, said shift work for employees of U.S. manufacturers rose 3.4% in mid-March compared to mid-February, surpassing an increase 2.6% in all sectors.
“ THIS IS NOT THE HOME DEPOSIT ”
The shortage comes at a time when the administration of US President Joe Biden has pledged to step up domestic manufacturing as part of a broader economic stimulus package to create more blue-collar jobs.
“If we pass this plan, the economy will create 19 million jobs. Good jobs. Blue collar jobs. High paying jobs,” Biden said Friday after the monthly payroll report. “This is a blue collar plan to increase opportunities for people.”
At the moment, however, factories across the country are seeing vacancies becoming vacant.
“I’ve never seen it so bad,” said Arnold, president of Look Trailers, based in Middlebury, Indiana. Look manufactures utility trailers, which are in great demand among small businesses such as landscapers and plumbers, as well as hobbyists who use them to transport motorcycles or other bulky sports equipment.
Lack of workers means lost business for Arnold and his clients. One of his dealers normally has about $ 2 million in inventory on his land, but he currently only has $ 200,000. The average price of a trailer is $ 3,400.
Wages at its trailer factories are already well above state or federal minimums. The average starting wage is $ 19 an hour, while workers with skills such as welders earn $ 24 an hour or more. “People are talking about the oil boom in the Dakota – how workers get in their cars and leave to find work,” he said. “We have the same thing here, a job boom. But no one is coming.”
Many employers see a mismatch between those who are currently unemployed and the jobs in their factories.
“This is not The Home Depot, or Starbucks, or a hotel,” said Kevin Kelly, general manager of Emerald Packaging Inc. in Union City, Calif. He estimates that one in five new workers quits within days and complains about the environment.
“They’re not used to machines that need to be greased,” he said, “and the smell of things like ink.” Emerald produces plastic bags for pre-cut vegetables, which are custom printed with images and product information.
Kelly said he has a better chance of hiring people who have worked in a factory before. A small printing house just closed near him and the owner called to ask if he wanted to buy machines. He sent an official who ended up distributing nominations instead. They have so far hired five of the other company’s employees and are trying to get two more. Yet even with these hires, Emerald is still 14 years short.
(Reporting by Timothy Aeppel; Additional reporting by Howard Schneider; Editing by Dan Burns and Chizu Nomiyama)
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