Manufacturing Better Opportunity & A Stronger Economy
This autumn, the Federal Reserve Bank of Chicago held two Economic Development Forums in Wisconsin that focused on workforce development. The Chicago Fed partnered with the Wisconsin Regional Training Partnership (WRTP) and The Center on Wisconsin Strategy (COWS) to co-host these events. Each forum featured a panel discussion on workforce development comprised of industry and policy leaders discussing practice, opportunities, and policies to build a stronger manufacturing sector. Central to the discussion were programs that the WRTP has built over the past year that work with their partners from community, business and labor. This experience is relevant to strengthening the manufacturing sector, to building and broadening opportunity, and to developing public policies at the state and local level that help secure that connection.
Laura Dresser, COWS, outlined the economic isolation of the population residing in Milwaukee's central city. She cited data showing that in the 1970s, more than half of Black men in Milwaukee were employed in factories and Black/White inequality in wages was well-below the national average: the Black median wage was 94 percent of the White median in 1979.1 During the 1980s, Milwaukee's central city experienced a severe loss of manufacturing jobs to suburban industrial parks, southern states, and offshoring. Milwaukee's Black men employed in manufacturing experienced the heaviest losses. Today, just 14 percent of Black men in Milwaukee hold manufacturing jobs and the median Black worker earns 40 percent less per hour.2
Rhandi Berth, WRTP, described how joint labor/management leadership is at the core of their organization's work. Through their network, the WRTP is connected to some of the best quality (i.e., high-wage and benefits) jobs in the regional labor market. They serve as an intermediary, connecting central city residents to the region's manufacturers.
The WRTP takes an unusual approach to connect workers with jobs. Rather than following the traditional workforce development model, where a potential employee gets trained and then, hopefully, finds a job, WRTP contacts manufacturers seeking workers, discussing skill sets required, and then reaches into its network to find Milwaukee central city residents to fill the open position. Many times, the candidate requires training. The organization works within its network to arrange the needed training, which may take the form of on-the-job training, apprenticeships, and/or classroom courses.
Unique to WRTP's process is a one-to-one match between a job opening and a person in their system. The WRTP's process cuts the training time for new hires because the potential employee gets the right skills, at the right time, only when an employer has a need for a particular type of worker. In 2011, the WRTP served 1,245 individuals. They trained 676 individuals and placed 215 individuals in jobs – at an average wage of $18.47/hour. In 2012, the WRTP served 1,725 individuals. They trained 554 individuals and placed 324 individuals in jobs – at an average wage of $18.08/hour. From January 1, 2013 through October 31, 2013 (preliminary data as of 12/5/2013), the WRTP served 1,553 individuals. They trained 688 individuals and placed 226 individuals in jobs – at an average wage of $17.72/hour.
Phil Neuenfeldt, Wisconsin State AFL-CIO, observed that beginning in the early 1990s, organized labor and management began to set aside their traditional adversarial relationship and started working together with regard to job training. For businesses, investing in worker training makes sense in order to take advantage of technological improvements in equipment and work force processes. Further, businesses are interested in creating a pipeline of future well-trained workers and have identified "critical thinking" as the skill in highest demand. For workers, the WRTP model is about advancement and adaptation, as the skills required by the type of available work continually changes. This approach increases worker job security and concurrently minimizes the offshoring of jobs. Neuenfeldt commented that the WRTP has ramped up its results over the years, but the present challenge is to scale up the WRTP’s impact to a statewide level.
James Morgan, Wisconsin Manufacturers and Commerce, identified the issues most important to its membership.3 First, he expressed concerns about both the abilities of those looking for work and their willingness to work. He questioned the work ethic of today's workforce, citing the lack of social, attendance and conflict resolution skills. Second, employers do a disservice by not providing accurate data on the job market, current wages, and the skills that are in demand. He stated that students were not aware that employees on the manufacturing shop floor were paid more than employees staffing the front office. Third, technical skill opportunities are disappearing from high school despite a mismatch between student preparation and available careers, with only 30% of Wisconsin jobs requiring a bachelor's degree or more. Finally, Wisconsin manufacturers have done a poor job of involving their industry with the education community and communicating the benefits of pursuing a career in manufacturing.
Morgan recommended best practices to jump start local initiatives that showcase exemplary businesses to the education community; improving statewide awareness of manufacturing careers to overcome stereotypes and misperceptions about manufacturing; increasing public awareness by providing regular communications on new workforce development initiatives; and offering community assistance to local and regional business-education partnerships to address the shortage in workforce skills.
Aaron Olver, City of Madison, made two key points related to workforce development in Wisconsin. First, there has been a relocation of manufacturing facilities from the central city to the outskirts in both Madison and Milwaukee. Historically, manufacturing facilities located in the heart of central cities in multi-story buildings, close to their workforces. Today’s manufacturing facilities are located on the periphery of cities in industrial parks with ready access to rail and highway connections. Newer manufacturing facilities are also single-story by design, improving movement of materials and finished goods within, and in and out of the structure(s). As a result, central city residents are more likely to live near an abandoned multi-story brick warehouse than their workplaces. Olver’s second point was that 21st century manufacturing jobs require tech savvy workers. Without access to the proper training, central city workers, in addition to being physically isolated from jobs, face a skills divide.
Robert Henken, Public Policy Forum, discussed the findings of recent research on Milwaukee's workforce development system and made four observations.4 First, coordination among Milwaukee's major workforce development players and programs has improved in recent years. Newer groups like the Milwaukee Area Workforce Invest Board’s Coordinating Council and the Milwaukee Area Workforce Funding Alliance, for instance, coordinate activities and prioritize funding for workforce development efforts in the region. Second, employment and training services in Milwaukee receive federal funding, which has been declining for many years. Consequently, local workforce development organizations must pursue new revenue sources and improve efficiency to maintain current service levels. Third, sector-based strategies show considerable promise, but some sectors are more germane to Milwaukee’s unemployed population than others. The health care sector enjoys stable growth and has a constant need for entry-level positions that require standardized training. However the manufacturing sector experiences demand cycles for workers, and often requires workers with specific skills and training. Consequently, workforce development organizations must balance the costs of meeting specified training needs with the desire to operate at scale and move more people toward employment. Finally, Milwaukee must coordinate economic development priorities with policy and funding that facilitates (through training and workforce development groups) the needed skill sets among unemployed workers. Ultimately, Milwaukee's advanced manufacturing sectors may not provide a significant number of jobs for chronically unemployed individuals due to the level of education and training needed to qualify for many high-skill positions.
The Economic Development Forums’ presentations and discussion pointed to broad agreement that the intermediary model created by the WRTP, which heavily leverages public and private resources, bridges the regional disconnect between the workforce, community, resources and industry. Further, the WRTP is able to reach consistently to all jobs within a firm – from entry-level to those requiring more advanced training. Challenges remain with regard to scaling up the WRTP’s impact to a statewide level and to matching jobs for chronically unemployed individuals who lack the required skills.
Manufacturing Better Opportunity & A Stronger Economy provides key data on manufacturing in Milwaukee and the problems which the central city community confronts. Additionally, it discusses the work of the Wisconsin Regional Training Partnership to build a stronger bridge from community to manufacturers throughout the region.
3 Morgan, Jim. March 15, 2012. Presentation provided to the Workforce Paradox Conference.