Recent studies indicate more than 40 percent of Gen Zers say they’ve embarked upon or are preparing for a career in the trades. That migration from office work demonstrates the pragmatism of thousands of youths who have struggled to adapt to the traditional workplace. However, their numbers are still likely to fall well short of the millions of people that Ford Motor Company CEO Jim Farley says are needed to reinvigorate the stalling engine of the nation’s productivity, which he calls the “essential economy.”
Farley addressed the manual labor shortfall during Ford’s inaugural Ford Pro Accelerate conference, which assembled hundreds of top business and government leaders in Detroit’s landmark Michigan Central Station. In his opening speech, Farley revisited the problem he’s spoken and written about in recent months — one that Ford, other big manufacturers, and countless small businesses have all struggled with. That’s the shortage of trained employees willing to do critically important work for the 3 million U.S. construction, agriculture, skilled trades, transportation, energy, and manufacturing enterprises that contribute $12 trillion to economic growth each year.
Those businesses — big, small, and in between — make up the essential economy, whose current nine to five employee workforce is still too small to meet demand. On the one hand, according to some estimates, around 600,000 jobs in manufacturing have been left unfilled due to insufficient applicants, with an additional 500,000 vacancies in construction. Farley said 400,000 new auto techs will be needed in the next three years alone.
On the other hand, technology and upskilling efforts have increased the productivity of white-collar businesses by 28 percent over the last eight years, according to an Aspen Institute study. But during the same period, productivity of essential economy companies dropped. That, Farley said, is decreasing the nation’s ability “to build things” on its own, compared to other big economies.
“The problems with the essential economy are problems for all of us,” Farley said during his Ford Pro Accelerate address this week. “What happened to the essential economy? We outsourced a lot of skills and jobs. We stopped investing in the trades. If Henry Ford saw what has become of us, I think he’d be kind of mad.”
Ironically, while Ford says he supports President Donald Trump’s import tariffs and other policies designed to return production to the U.S., he warns they risk worsening the huge labor shortage. Companies that reshore by building factories will be up against an insufficient number of available workers driving up salaries and inflation, while slowing completion of construction projects.
What’s needed first, the 63-year-old CEO argues, is a comprehensive plan and collective vocational training investment strategy to teach more people with skills needed in the essential economy. To make this happen, he says, changes in business and public perceptions must help restore the financial and professional status of jobs that are now often viewed as last-choice leftovers.
“One of the biggest barriers is the hesitancy to enter these trades, because as a society, we don’t really reward or celebrate the people who take on these kinds of jobs,” Farley said. “We can’t rely on government to fix it. We can’t just rely on business or communities. It has to be a cooperative effort.”
As part of that, he noted, corporations and elected officials need to address challenges faced by entrepreneurs. Those include slashing time-consuming and costly administrative requirements. They also must help fund training programs for the employees who will wind up working for the small businesses that provide the majority of the nation’s jobs and essential economy work.
“What are we going to do for the small-business owner?” he asked. “We need to help them because they don’t have the money to invest.”
Farley’s sense of urgency comes from his view the essential economy – and with it, the U.S. itself — has fallen behind nations like China, South Korea, Japan, and others.
In those countries, he says, public and private funds have flowed into vocational training as part of industrial policies that have generated countless well-paid manual jobs. Those, Farley notes, that have allowed millions of people to ascend to and thrive in their nation’s middle class as respected members, just as Americans used to before manual work was discounted in both income and esteem.
“When my team and I travel to places like Germany, China, and Korea, we see that we’re pretty far behind,” Farley said. “They get it. What they do is invest. If anything comes out of today, it’s this: We need to figure out how to invest in the people who build things.”
As an example what could come from that effort, Farley motioned around him to the Michigan Central Station hosting Ford Pro Accelerate. The giant terminal was recently restored to its former glory after decades of vacancy and neglect once the importance of rail travel diminished.
“We’re here to honor the people who work with their hands,” Farley told his audience. “We’re here in the magnificent Michigan Central Station, and it’s appropriate. We rebuilt this — not with money, but with skills. This place was left derelict for four decades, and it was skilled tradespeople, craftsmen and women, who solved the problem. It was the right thing to do, but we collectively need to have the will to do it.”
Bruce Crumley
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