Manufacturing’s Labor Equation

Solving manufacturing's workforce shortage is key to pushing the industry forward.

“Trenton Makes, the World Takes.” To this day, the Lower Trenton Bridge boasts this phrase, one that many view as an ode to the Garden State’s rich manufacturing roots, which date all the way back to colonial times.

Though centuries old, the manufacturing industry remains a pivotal part of the New Jersey economy.

While manufacturing contributed $2.3 trillion to US GDP in 2021 (or 12% of total US GDP), manufacturers in New Jersey account for 9.47% of the total output in the state, including $60.5 billion in 2021, according to the National Association of Manufacturers.

Despite this economic impact, the industry is not without challenges – namely, an increasing critical shortage of workers entering the field.

In fact, according to NJBIA Chief Government Affairs Officer Chris Emigholz, manufacturing has actually faced a steep decline in New Jersey over the past 30 years. Employment has shrunk from 16.2% of the state’s total workforce to 6.2% between 1990 and 2022, and many of those now working in the industry are nearing retirement.

“A great deal of damage has been done to the industry by ignoring it,” explains John Kennedy, Ph.D., CEO of the New Jersey Manufacturing Extension Program (NJMEP). “People stopped seeing it as a viable career path. Somehow, it has survived and in many ways grown, but what has happened is that there is a very, very, very limited pipeline of talent coming into an industry built on highly technical processes and machinery.”

Simply put, Kennedy says that we need more engineers, CNC programmers and operators, machinists, welders, and many others to get excited about the future.

“Those new vehicles, off-shore wind turbines, space vehicles, and cell phones do not just happen,” he says.

To this end, Kennedy suggests a more focused approach on how to educate parents, children and (even) educators to better engage with the industry.

“More investment into branding, high school robotics teams, and innovation spaces are all a plus,” Kennedy says. “New Jersey leads the US in many areas of education, but we need to do so in STEM/STEAM as well. We need to allow our children to be career-ready.”

“Craft skills can result in a lucrative and exciting career,” says Jim Flaherty, president and CEO at Middlesex-based Adsorptech, a SME manufacturer of oxygen generating equipment. “For example, a trained welder is likely to make more than a finance college graduate; plus, having a craft can readily lead to being an entrepreneur and being one’s own boss.”

State and Federal Support

State assistance is also an important piece to the puzzle, and Kennedy says he does believe that New Jersey has taken considerable steps forward over the past few years when it comes to supporting the industry.

“The governor and his team, the Manufacturing Caucus and other legislators, the New Jersey Economic Development Authority (NJEDA), New Jersey Business Action Center (NJBAC), New Jersey Department of Labor (NJDOL) and others have all pushed for positive gains and see the industry as a place where real ROI can be achieved,” Kennedy says. He adds that the $35 million for manufacturing included in the 2022-23 state budget is a plus, but says that support for the sector needs to expand further in regards to off-shore wind investment, and when pursuing federal dollars like denoted in the CHIPS Act, for example.

Flaherty says he also sees a gradual increase in New Jersey manufacturing appreciation – albeit slow.

“The NJBAC helped Adsorptech significantly when we first decided to manufacture and enter the international export business,” he says. “The New Jersey State Trade Expansion (NJ-STEP) program helped as well over many years.”

However, Flaherty points out that going forward, the limitation on available funds from the US Small Business Administration has forced a narrow award emphasis on specific industries, of which Adsorptech (and many other companies) are not a participant.

Flaherty says that despite solid lobbying efforts in Trenton, policies like unemployment insurance, for example, still hinder the industry. “State government is talking the talk, but not yet walking the walk,” he says.

When it comes to the federal government, Kennedy says that the greater impact of the entire industry needs to be considered.

“As for the federal government, many are still not sure what ‘Made in the USA’ really entails. It is something we have to enact more than just embrace as a phrase,” he says. “Yes, the CHIPS Act was passed, but how will it be funded and sustained? This isn’t about ‘corporate welfare’, but instead supporting an industry that will make or break our economy, especially on the world stage.”

Innovative Thinking

Ultimately, finding solutions to the challenges that manufacturers face today will likely take innovative approaches.

One such approach is that of the New Jersey Pathways to Career Opportunities Initiative. Led by New Jersey’s community colleges and NJBIA, the initiative aims to align employers, industry associations, labor unions, educational institutions, and workforce development partners to provide students and workers with structured pathways to find career opportunities and to ensure that employers have access to the specific skilled workers they need.

“The engagement and participation throughout New Jersey is incredibly promising,” says New Jersey Council of County Colleges (NJCCC) President Aaron R. Fichtner. “We are building momentum via relationship building and partnerships in the business community. We know it will take a coalition of industry and education partners to build an innovative workforce, and the [enthusiasm for the initiative] confirmed that employers are eager for education to meet their current and future needs.”

Kennedy, whose NJMEP also champions as a leader for the pathways model, advises manufacturers to pay attention and engage with groups providing support in the way of initiatives like these.

“What companies have to do is understand that there is no ‘people pipeline,’ and that we all need to work together to refill it,” Kennedy says. “Companies are not going to be able to locate that individual with 5 to 10 years’ experience and all the applicable skills, because she/he is already working. They have to be willing to hire the entry level person, and use the resources available to train them. They will need to invest in apprenticeships and other on-the-job functions. It may not be the answer they want to hear, but it is an honest one.”

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