Phase 1 - Empirical Analysis

Manufacturers Face a Wave of Future Retirements
Due to the pending retirement of the baby-boom generation, all sectors of the economy face a problematic wave of retirements. Some sectors will be more adversely affected than others, however, and current data indicate that manufacturing is likely to be the most adversely affected of all. According to data from the U.S. Census Bureau’s Longitudinal Employer-Household Dynamics project, Virginia’s manufacturing sector has the largest absolute number of employees between the ages of 55 and 64 (47,037) of any sector within the state’s economy.¹⁴ These data imply that around 15.4 percent of the current workforce employed in manufacturing in Virginia will likely retire within the next ten years.

Increasingly High-Tech Nature of Manufacturing
To paraphrase a classic new car ad, “today’s manufacturing plant is not your father’s manufacturing plant.” Driven by intense global competition, manufacturers are increasingly using high-tech production processes to enhance industrial productivity. Productivity increases have been particularly pronounced in the manufacture of iron and steel, computer and electronics products and peripheral equipment, communication equipment, audio and visual equipment, semi-conductors, transportation equipment, and pharmaceuticals.¹⁵

As will become more apparent in subsequent sections where workforce skill requirements and postsecondary training requirements are discussed, this increased use of high-technology has driven a significant increase in the general skill level required of manufacturing workers. Today’s manufacturing worker must possess applied math skills, reading and locating information skills, and training in computer technology. As a result, manufacturers increasingly find themselves competing with other sectors of the economy to find adequate supplies of these types of workers.

Whereas independently any one of these factors – a slowdown in the growth of the U.S. labor force, a wave of pending retirements, and the increasingly high-tech nature of manufacturing – could have a negative impact on the ability of the manufacturing sector to obtain the skilled trades workers it requires to prevail in today’s global market, in combination they are very likely to create crippling bottlenecks that have the potential to forestall economic growth. For this reason, moving proactively to ensure an adequate supply of skilled trades workers has become an imperative goal for manufacturers.

Phase 1: Empirical Analysis
This portion of the report presents the findings from Phase 1 of VMA’s Skilled Trades Study. Phase I was conducted by Mangum Economic Consulting, LLC and employed existing labor and education databases to illuminate the characteristics of skilled trades employment within the Commonwealth, and identify areas where the educational pipeline for skilled trades workers may be inadequate to meet future needs. The findings from Phase 1 were first published in January 2007.¹⁶

The purpose of this initial phase of the VMA Skilled Trades Study was twofold. First, to provide a preliminary analysis of the scope and magnitude of the problems associated with meeting the demand for skilled trades workers in Virginia. Second, to better prepare us for Phase II of the study – a survey of Virginia manufacturers to obtain primary data on skilled trades employment – by illuminating areas where existing data might be inadequate to address some of the more pressing issues associated with skilled trades employment.

Twelve skilled trades were selected by the Skilled Trades Workforce Development Committee for analysis in Phase 1. These were: 1) Chemical Equipment Operators, 2) Chemical Technicians, 3) Computer-Controlled Machine Tool Operators, 4) Electricians and Electrical Technicians, 5) Extruding and Drawing Machine Setters, 6) Machine Maintenance Specialists, 7) Machinists, 8) Multiple Machine Tool Setters, Operators, and Tenders, 9) Printing Machine Operators, 10) Stationary Engineers and Boiler Operators, 11) Tool and Die Makers, and 12) Welders.

The remainder of this portion of the report is divided into four sections: 1) the demand for skilled trades workers in Virginia, 2) the supply of skilled trades workers, 3) an assessment of the gap between the two, and 4) a summary of the most salient findings derived from Phase 1 of the VMA Skilled Trades Study.