Globalization and the Time Axis

This has long been a concern of mine with regard to the globalization of the world labor markets. When you hear the cheerleaders praising the global reach of manufacturers and how consumers benefit when companies can take their manufacturing work to wherever labor is cheapest they always focus on location and prices while ignoring the negative aspects.

There is another element that gets lost in the rah rah rah for cheap labor. The lost element is SKILLS. Despite decades of technological advancement and automation efforts, labor in the manufacturing sector is not the interchangeable commodity people want it to be. While many jobs can be done by anyone in any place on the globe, there will always be jobs that require skills that are developed over time through education and experience.

When jobs follow the cheap labor pools around the world, those people with the skills needed to make it all work do not generally move with the work. This means that when Pennsylvania sheds 1000 jobs due to the economic downturn in 2008 that the manufacturer who wants to bring those jobs back in 2010 will have a hard time filling the more skilled positions they eliminated two years before.

Financial Times

Manufacturing companies in the US are struggling to find workers with technical skills even though the sector has shed more than 2m jobs in the past two years. The shortage of skilled staff could restrict companies’ ability to step up production as the economic recovery gathers pace.

In interviews with the Financial Times, groups ranging from Boeing – one of the US’s biggest manufacturers and exporters – to small companies also said they faced a wave of skilled workers reaching retirement age in the next few years, with a shortage of younger workers to replace them.

…

“It’s difficult to find people for assembly, machining and motor-winding positions – jobs that require maths skills and the ability to read technical blueprints,” said Ron Bullock, owner of Bison Gear, a manufacturer near Chicago with 225 employees.

via FT.com / Companies / Industrial Goods – US manufacturers face skills shortages.