[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
EXAMINING THE SMALL BUSINESS LABOR MARKET
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ECONOMIC GROWTH, TAX, AND CAPITAL ACCESS
OF THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
SEPTEMBER 7, 2017
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 115-034
Available via the GPO Website: www.fdsys.gov
__________
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HOUSE COMMITTEE ON SMALL BUSINESS
STEVE CHABOT, Ohio, Chairman
STEVE KING, Iowa
BLAINE LUETKEMEYER, Missouri
DAVE BRAT, Virginia
AUMUA AMATA COLEMAN RADEWAGEN, American Samoa
STEVE KNIGHT, California
TRENT KELLY, Mississippi
ROD BLUM, Iowa
JAMES COMER, Kentucky
JENNIFFER GONZALEZ-COLON, Puerto Rico
DON BACON, Nebraska
BRIAN FITZPATRICK, Pennsylvania
ROGER MARSHALL, Kansas
RALPH NORMAN, South Carolina
NYDIA VELAZQUEZ, New York, Ranking Member
DWIGHT EVANS, Pennsylvania
STEPHANIE MURPHY, Florida
AL LAWSON, JR., Florida
YVETTE CLARK, New York
JUDY CHU, California
ALMA ADAMS, North Carolina
ADRIANO ESPAILLAT, New York
BRAD SCHNEIDER, Illinois
VACANT
Kevin Fitzpatrick, Majority Staff Director
Jan Oliver, Majority Deputy Staff Director and Chief Counsel
Adam Minehardt, Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Dave Brat................................................... 1
Hon. Dwight Evans................................................ 2
WITNESSES
Dr. Michael Farren, Research Fellow, Mercatus Center, George
Mason University, Arlington, VA................................ 4
Mr. Bruce Seilhammer, Electrical Construction Group Manager,
SECCO, Inc., Camp Hill, PA, testifying on behalf of the
Independent Electrical Contractors, Inc. (IEC)................. 6
Mr. Carlos Castro, President, Todos, Inc., Woodbridge, VA,
testifying on behalf of the National Grocers Association....... 8
Mr. Gardner Carrick, Vice President of Strategic Initiatives, The
Manufacturing Institute, Washington, DC........................ 9
APPENDIX
Prepared Statements:
Dr. Michael Farren, Research Fellow, Mercatus Center, George
Mason University, Arlington, VA............................ 21
Mr. Bruce Seilhammer, Electrical Construction Group Manager,
SECCO, Inc., Camp Hill, PA, testifying on behalf of the
Independent Electrical Contractors, Inc. (IEC)............. 26
Mr. Carlos Castro, President, Todos, Inc., Woodbridge, VA,
testifying on behalf of the National Grocers Association... 31
Mr. Gardner Carrick, Vice President of Strategic Initiatives,
The Manufacturing Institute, Washington, DC................ 36
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
None.
EXAMINING THE SMALL BUSINESS LABOR MARKET
----------
WEDNESDAY, SEPTEMBER 7, 2017
House of Representatives,
Committee on Small Business,
Subcommittee on Economic Growth,
Tax, and Capital Access,
Washington, DC.
The Subcommittee met, pursuant to call, at 10:04 a.m., in
Room 2360, Rayburn House Office Building, Hon. Dave Brat
[chairman of the Subcommittee] presiding.
Present: Representatives Brat, Kelly, Evans, and Murphy.
Chairman BRAT. Thank you all for showing up and being
prompt and more on time on than us Members of Congress. Glad to
have you all with us. I looked at all your backgrounds and
resumes, and it is going to be a great panel. And so I am
looking forward to discussing the issue and having a great
conversation.
And so with that, I will call this hearing to order and get
us started. Thank you all for being here.
Today the labor market is facing significant challenges.
The labor force participation rate is at 40-year lows not seen
since the Jimmy Carter era. Many are calling for the Federal
Government to allow mass immigration of foreign workers.
However, displacing American workers is counterproductive and
misses the point.
The problem is much deeper and more fundamental. Our K-12
education system fares poorly in some respects compared to
other industrialized countries. I taught Econ 101 for 20 years
in Virginia. Kids are coming out of high school not knowing
what a business is. They don't know what an entrepreneur is.
They don't know a price from a profit from a cost. And we have
to change that. That is adding to the skills mismatch that I
think we are all probably going to be discussing today.
We also have vast a welfare state that disincentives
individuals to work. Taxes remain high and complex. I think
people are currently eligible for about $50,000 in just Federal
welfare benefits.
Combine that with State and local, if you have got two kids
in school, that is 26 grand. If you work under the table, that
is 25 grand. Add all that together, you are doing $100,000
worth of benefit to you and your family and it is hard for the
labor market to compete with that at 10 bucks an hour. So you
see we have got--it is kind of a triple bank shot.
And then some people want to use immigration to solve those
complexities complex, right? And so I always start off that we
have always been a country of immigrants, we welcome all
immigrants. Most immigrants that come in south of the border,
predominantly Catholic, fine people. That is not the debate at
all. The issue coming in is people make about 20 grand, pay
some income tax, a little bit of Federal income tax, FICA. If
you have got two kids in school, it is 26 grand, and you are
upside down.
And so we have got labor market problems we have got to
solve, K to 12 skills mismatch, welfare system issues. It is
tied to immigration. That is in the news. Many businesses are
struggling to find and hire qualified employees. That is true I
think across the country in every district.
Last month I heard this in person when I traveled around my
district, met with dozens of business leaders. They told me all
too often they cannot find a qualified skilled workforce to
fill job vacancies and this hinders their ability to grow their
business. And that is why we have been growing at about 1 to 2
instead of 2 to 3, and if you get tax cuts, maybe shooting for
4.
In just the past year, the number of job vacancies grew
from 5.5 to 6.2 million. Job vacancies, 6 million, which is the
highest in this century. Although large businesses may have the
resources to staff recruiting departments and offer better
wages and benefits, resource-strapped small businesses are left
at a significant disadvantage. And that is our job in this
Committee, is to pay attention to small business.
For example, according to a recent survey by the National
Federation of Independent Businesses, NFIB, 87 percent of small
businesses looking to hire workers reported few to no qualified
applicants.
Next to tax and regulatory burdens, finding qualified
workers has become one of the top concerns for small business
owners, if not the top.
This morning we will hear from a distinguished panel of
witnesses who will give their perspective on small business
labor market issues and hopefully solutions. We will dive
deeper into how the labor market affects economic growth, how
we can help Americans acquire in-demand skills, and how to get
disenfranchised workers participating in the labor market.
I appreciate the witnesses being here today. I look forward
to your testimony.
I now yield to the ranking member and my good friend for
his opening remarks.
Mr. EVANS. Thank you, Mr. Chairman.
America's economy has improved since the economic downturn
8 years ago and most signs of economic gain are promising. Yet
significant labor market challenges still exist for small
business owners. Even though the United States is experiencing
lower unemployment, small employers widely report difficultly
finding qualified and skilled workers.
The gap between the employer needs and worker skills, the
imperative to close it has been recognized as an important
challenge by many business leaders, educators, and
policymakers. However, the solutions are not simple.
This gap between the employer needs and the worker skills,
known as the skills gap, is a particular challenge for small
firms. They face greater barriers to developing a skilled
workforce than their larger counterparts, including fewer
financial resources to assist in hiring, retraining, and
developing advanced skills.
For businesses, this reality has dire consequences.
Unfilled positions mean they cannot take on more customers and
risk losing business to competitors who can fill those
positions. The manufacturing and the construction sector, in
particular, is facing challenging obstacles due to this
deficiency. If we aren't able to meet the demands for trained
workers, our country will not be able to compete globally.
This troubling trend lacks the attention it deserves, and
small businesses deserve a better deal. Part of that plan
requires targeted postsecondary education, such as skill
certificate systems which can help small firms secure qualified
employees to help them grow. Novel partnerships among industry,
educators, and policymakers are also playing a role by
preparing the workforce and incentivizing school completion.
Such direct career paths between students and employers are
vital.
Too many American workers in small businesses have been
left behind. That is why creating incentives for training
certification and apprenticeship programs lead to a better
America. We should leverage the tools available to us in order
to help small businesses' owners thrive with a strong
workforce.
Today's hearing offers us the opportunity to discuss the
challenges and solutions to help our Nation's job creators
prosper. Prudent investments in training and education will
also lead to higher consumer confidence and demand.
I look forward to hearing from our witnesses on how we can
ensure America's small businesses are prepared to move our
economy forward. I look forward to hearing and thanking the
witnesses for being here.
Thank you, Mr. Chairman, and I yield back the balance of my
time.
Chairman BRAT. Thank you.
If Committee members have an opening statement prepared, I
ask they be submitted for the record.
I would like to take a moment to explain the timing lights
for you. You will each have 5 minutes to deliver your
testimony. The light will start out green. When you have 1
minute remaining, the light will turn yellow. Finally, at the
end of your 5 minutes, it will turn red. I ask you try to
adhere somewhat to that time limit. We are going to probably
run an informal shop here today and just have a nice
conversation. But if your opening remarks can stay in that
ballpark, that would be great.
Our first witness is Dr. Michael Farren, a research fellow
at the Mercatus Center at George Mason University. Dr. Farren's
research focuses include labor and economic development issues.
He received his bachelor's, master's, and doctorate from the
Ohio State University. I am from Michigan, footnote.
Thank you for being here this morning, and you are
recognized for 5 minutes. Thank you.
STATEMENTS OF DR. MICHAEL FARREN, RESEARCH FELLOW, MERCATUS
CENTER, GEORGE MASON UNIVERSITY, ARLINGTON, VA; MR. BRUCE
SEILHAMMER, ELECTRICAL CONSTRUCTION GROUP MANAGER, SECCO, INC.;
CAMP HILL, PA, TESTIFYING ON BEHALF OF THE INDEPENDENT
ELECTRICAL CONTRACTORS, INC. (IEC); MR. CARLOS CASTRO,
PRESIDENT, TODOS, INC., WOODBRIDGE, VA, TESTIFYING ON BEHALF OF
THE NATIONAL GROCERS ASSOCIATION; MR. GARDNER CARRICK, VICE
PRESIDENT OF STRATEGIC INITIATIVES, THE MANUFACTURING
INSTITUTE, WASHINGTON, DC
STATEMENT OF MICHAEL FARREN
Mr. FARREN. Thank you very much, Chairman Brat, Ranking
Member Evans. And thank you for allowing a Buckeye to address
you today.
I appreciate the opportunity to discuss the skills gap with
you. And what I would like, if possible, for you to take away
from this, my presentation today, is the economic perspective
in addressing social problems in that the best way to address
social problems from an economic perspective is to either
reduce the cost of the social problem--or the social value--or
to increase the cost of the social problem.
So in the case of training, if we have a skills gap and job
applicants applying to businesses, then what we should do is
reduce the cost or find ways to reduce the cost of acquiring
new skills.
What this does is it allows for a bottom-up approach for
individual people to figure out the exact way to solve the
individual problems facing them and the individual problems
facing businesses rather than a targeted mandated approach that
says, okay, I think we need specifically more science and math,
so we are going to fund more science and math in particular.
But businesses know what they need better than we here in
Washington. So we should give them the ability to figure out
what that is particularly.
So along these lines, I have two policy proposals that
might help address the skills gap problem. The first is to
reform the Tax Code, and that is to allow for tax deductions in
training investments to be counted exactly the same way that
tax deductions for factory investments or machinery investments
are done. So I am saying that to treat human capital
investments the same way that we treat physical capital
investments.
Currently, businesses can take a tax deduction on
improvements in machinery or tools or additional training for
workers in their current job. However, they can't take tax
deductions specifically for to train workers into a brand-new
job. And so removing that will lower the cost of training
someone exactly into the exact job the company needs and, as a
result, should go a long way to actually addressing the skills
gap, because companies won't have to wait for the exact right
worker to come along. They can find a high quality applicant
and then train then directly into position.
It also makes training investments less risky for workers,
because you are never quite certain if you are going to get a
job when you engage in training prior to the fact. But if you
already have a job and the workplace, the company is training
you exactly in the way that you need to be trained for the job,
you are pretty certain that your training is going to be
valuable to the company.
Secondly, something that I think is a good idea is to take
a new look at disability aid programs and potentially redesign
them. The important thing that we should do is to keep their
valuable safety net for people who are unable to work, but look
at whether they may be causing unintended consequences and
inspiring people to stay out of the labor market longer than
they otherwise would.
So recent research by Scott Winship with the Mercatus
Center and my own research going forward looks at this and
finds that the level of inactivity in the labor market has
increased over time. So that is the number of people not
working and who are not even looking for work.
In particular, over the last 50 years, the rate of
inactivity in prime-age men, men between the age of 25 and 54,
people who you would expect to be working, has more than
tripled. Today we have over 7 million men who are not working
and not even looking for work. And the major part of this
increase has come because of men saying that they are disabled
and physically unable to work, which is surprising given that
the health of the general society and the number of workplace
injuries has declined over time.
So to the extent that programs are not giving people an
incentive to rejoin the labor force after they have healed and
they could potentially is a problem, might be part of the
skills gap problem. And importantly, a lot of these workers are
in the later half of their career and so they have built up
skills and experience that they could be teaching to younger
workers. So if we address the problem this way, we might be
able to address the future skills gap problem at the same time.
So in conclusion, I would advise hopefully an economic
approach to solving problems, looking at the costs of a
problem, but also addressing the potential mismatch of allowing
for training programs to be treated the same way as physical
capital investments in factory machinery and redesigning
disability aid programs.
Thank you very much.
Chairman BRAT. All right. Thank you very much, Dr. Farren.
I appreciate the testimony.
I remember after the financial crisis the inactivity piece.
Greenspan and Bernanke were asked: What do you think the
greatest harm from the financial crisis was? And they didn't
say the trillions lost in equity. They said loss of skills.
Mr. FARREN. Yes.
Chairman BRAT. Right? Folks being out of the labor market
for a while, and then reentry is going to be a problem. And so
your testimony is right on the mark.
Our next witness is Bruce Seilhammer, Electrical
Construction Group manager at SECCO, Inc., in Camp Hill,
Pennsylvania. This morning, Mr. Seilhammer will be testifying
on behalf of the Independent Electrical Contractors. At SECCO,
Mr. Seilhammer oversees electrical construction projects for
the company. He is also a preparation instructor for the Master
Electrician's Exam.
Thank you for being here this morning to share your
perspective on skills, workforce training. And you may begin
your testimony. Thank you.
STATEMENT OF BRUCE SEILHAMMER
Mr. SEILHAMMER. Thank you, Chairman Brat and Ranking Member
Evans and the members of the Subcommittee. I am honored for the
opportunity to testify before you today at this important
hearing. And as you said, my name is Bruce Seilhammer. I am the
Electrical Construction Group manager for SECCO in Camp Hill,
Pennsylvania. And I am here in behalf of the IEC, the
Independent Electrical Contractors, which I am currently
serving as the national president, and I am also here on behalf
of our chapter in Pennsylvania.
Based in Alexandria, our IEC association has over 50
affiliates, training centers, representing over 2,300
electrical and systems contractors nationwide. And our
membership consists primarily of small businesses, with the
average contractors having around 30 employees, 20 of which are
typically the electricians in the field.
And our purpose really is to establish a competitive
environment for the merit shop, a philosophy that promotes free
enterprise, open competition, and economic opportunity.
Before getting into the workforce challenges faced by the
industry, I thought I would give you a little bit of my
background. I am currently a licensed master electrician, and I
am also a veteran of the United States Air Force. And I give
credit to the Air Force's electrical apprentice program for the
skills that have contributed to my successful career that I
have today.
I have been with my current company, SECCO, for 24 years,
and I have risen up through the ranks and become part of the
senior team where I oversee about 40 of our 90 employees in the
construction management position.
And for decades, IEC has been on the forefront of providing
highly trained electricians in the industry, and we are known
for our registered apprentice program. And it is an earn-while-
they-learn, and they incur little to no debt and then enter
into a job at a median salary of almost $53,000.
And, again, the IEC's apprentice program is certified by
the Department of Labor, the Office the Apprenticeship and
State Apprenticeship Councils. And in addition, the American
Council on Education has recommended our students that graduate
from IEC are eligible for 40 semester hours, 40 credit hours
for college credits. And so collectively, IEC will train over
10,000 electrical apprentices in 2017.
As you are probably aware, electrical contractors, like the
rest of the construction industry, continue to struggle to find
qualified candidates to fill openings. According to recent
research from the Associated General Contractors, among the
trades, electrician was the second hardest position for their
members to fill. And this challenge is expected to continue for
the coming years, estimating there will be about a 14 percent
increased demand for electricians through 2024.
Construction employers as a whole are experiencing trouble
hiring new workers, with an estimated 500,000 skilled
construction jobs currently vacant. A number of those different
factors have contributed to the workforce shortages.
One of those is what we talked about, is a lot of the folks
have, in fact, left during the recession. In addition, much of
the skilled workforce is planning to retire in about the next
10 years. Three million of the current 14.5 million
construction workers are looking to retire and leave the
industry. And I think the average age right now of the
construction worker is 54. That is a high average, right?
So, unfortunately, our industry can't keep up with the
demand. The cultural shift in our country over the past few
decades has definitely had an impact on this. A significant
emphasis has been placed on young people to attend a
traditional 4-year university, and a career in the trades is
rarely discussed as an option. And parents have grown to
believe that the primary pathway to a successful career and the
American Dream is through a traditional college education.
Not helping matters is that many jurisdictions judge the
success of their high schools on the number of students that
attend college. So these guidance counselors and school
officials have less incentive to suggest students consider
entering an apprentice program like the IEC has to offer.
This, along with enormous subsidies by the government in
the form of student loans, has made it easier for students to
pay for college without fully understanding the massive debt
they are incurring and no guarantee of a job that is going to
pay off.
Another factor contributing to the construction industry
worker shortage is the lack of exposure of young people to
skilled trades early as a viable career path. Across the
country, we are seeing less investment in vocational or career
technical education, CTE programs in high schools. These
programs offer students the opportunity to work with their
hands early on.
And every day, the IEC chapters and contractor members
aggressively search for people interested in entering our
apprentice program. I can tell you at my company we work with
local high school Vo-Tech programs and promote the
opportunities that come with being an electrician. I personally
sit on both of the occupational advisory committees for both of
our Vo-Techs locally, and we are able to hire those folks and
bring them on board.
I know I am running out of time. But, you know, to really
address some of the labor shortages in the short term, some of
the things that we will do as IEC members is we will share
labor back and forth with our competitors and those kind of
things and bring on temporary help. And there is a lot to do.
And since all of the trades work together typically have some
impact on each other.
So I can give you a prime example. We are on a project
currently that is 2 months behind because the concrete guys
didn't have enough help. And you can't put the rest of the
building up without the foundation. And those are the things
that we are constantly running into.
So I won't drone on too long. But in closing, I just want
to express our willingness to work with this Subcommittee and
Congress and the ability to find practical solutions to address
the workforce shortage. So I thank you for the opportunity
today.
Chairman BRAT. Thank you very much, Mr. Seilhammer. We
appreciate your testimony. And I have a couple of questions
that you provoked some interesting issues for us.
Our third witness is Carlos Castro, president of Todos,
Inc., in Woodbridge, Virginia.
Thank you for being with us.
This morning, Mr. Castro will be testifying on behalf of
the National Grocers Association. Founded in 1990, Todos
Supermarkets now has two locations in Virginia which employ
roughly 170 people.
Thank you for being here this morning, and you may begin
your testimony. Thank you.
STATEMENT OF CARLOS CASTRO
Mr. CASTRO. Good morning, Chairman Brat, Ranking Member
Evans, and members of the Subcommittee. My name is Carlos
Castro, and I am the owner of Todos Supermarkets, located in
Woodbridge, Virginia. I have been asked to testify by the
National Grocers Association on behalf of the independent
supermarket community. The National Grocer Association is the
national association representing the retailers and wholesalers
that comprise the independent sector of the supermarket
industry, including full service supermarkets, such as Todos,
and multistate regional chains.
Todos Supermarkets was created in 1990 and aims to fulfill
the needs of an increasingly diverse community. To help better
serve our customers, we have expanded our offerings beyond
groceries and offer money transfer services, notary, insurance,
and tax preparation services. We even have a U.S. post office
in house.
As the saying goes, good help is hard to find. But at
Todos, we have a placed an added emphasis on youth hiring
practices that allow us to train workers and create an
inclusive culture that allows us to retain our employees for
the long run. Our various offerings have also allowed us to
attract a diverse array of talent and keep our employees on
their toes as our business continues to expand and change.
But costly regulations often take up too much of our time
and resources and have served as a serious barrier to hiring.
According to National Grocers Association survey data, the
average grocer can expect to spend between $40,000 and $50,000
a year in regulatory compliance per store per year. In an
industry with 1 to 2 percent profit margin, that is a
significant amount of resources to be taken away from store
improvements, additional staff, or expanded offerings.
The Affordable Care Act mandate on small business serves as
a perfect example of regulations with good intentions that have
created an additional burden for our businesses. Todos
Supermarkets was committed to offering healthcare to employees
before the healthcare law was implemented. We were not only
proud that we could cover our employees with affordable
healthcare, but it was a hiring incentive that improved both
recruitment and efforts to retain hardworking employees.
Now that all businesses of our size must offer healthcare
plans under the ACA, we can no longer use our healthcare
program to differentiate our company, and our expenses have
gone through the roof. If Todos had not diversified our
offerings, we would certainly have been forced to close our
doors due to the increasing financial strains regulations have
caused.
Congress and the regulatory agencies have taken steps
recently to lighten the burden on small businesses like mine.
The recent Federal District Court order overturning the
Department of Labor overtime rule, as well as the decision by
OMB not to implement the EEO-1 pay reporting regulation, have
been a step in the right direction. While there is no one
single regulation dragging the heaviest on small businesses,
the sheer volume of regulation that require compliance is what
is holding us back.
Finally, with a workforce and customer base that is heavily
comprised of the Latino population, I feel compelled to address
President Trump's decision to end the Deferred Action for
Childhood Arrival, DACA, program. Immigrants who come here
children as part of families seeking a better life should not
be punished for the decision of their parents. Some members of
our team utilize the DACA program, and they are some of our
hardest workers.
While I understand there is a good argument on both sides
as to whether DACA passes constitutional muster, it is clear
that the fate of 800,000 young Latinos is now in the hands of
the legislature. I urge Congress to act swiftly to find a
solution to this issue and to consider the potential harm that
could come from failure to act, not only to our businesses but
communities and families as well.
At Todos, we often say, if you have a positive attitude and
work hard there is no limit to how high you can rise. With
business, it should be the same.
I would ask our representatives to continue to look for
opportunities to unshackle businesses from their heavy
regulatory burden and let businesses like mine see how high we
can go.
Thank you.
Chairman BRAT. Thank you, Mr. Castro. And your testimony
shows how all these issues are interlinked, especially with the
regulatory examples you gave. We appreciate your testimony.
And now I will yield to our ranking member for introduction
of our final witness.
Mr. EVANS. Thank you, Mr. Chairman.
I am pleased to introduce Mr. Gardner Carrick. Mr. Carrick
is the vice president of strategic initiatives at the
Manufacturing Institute, a research and policy institute in
Washington. He leads the institute's research activities and
the development of a national education data center to deliver
outcome information on education programs.
He previously worked at the U.S. Department of Labor, where
he worked to integrate the workforce development, economic
development, and education strategies of a region to create a
talent base for economic growth. He attended Carnegie Mellon
University, which is in the great city of Pittsburgh. He
received a degree in policy and management.
Welcome.
STATEMENT OF GARDNER CARRICK
Mr. CARRICK. Thank you. Chairman Brat, Ranking Member
Evans, and members of the Subcommittee, thank you for the
opportunity to testify today about the workforce challenges
facing our small manufacturers.
As you said, my name is Gardner Carrick, and I am the vice
president of strategic initiatives at the Manufacturing
Institute. We are affiliated with the National Association of
Manufacturers, which is the largest industrial trade
association and voice for over 12 million men and women that
make things in America.
It is mission of the institute to attract, train, and
develop the world class talent that manufacturers need to
compete in a global economy. There are over 250,000
manufacturing companies in the U.S. today, and over 90 percent
of them have fewer than 100 employees. They provide good jobs
in every city, town, and community in the country. And today,
manufacturing is enjoying a renaissance in the U.S.
Since the end of the last recession, manufacturing
companies have added over 1 million jobs. And this year alone,
companies have added nearly 140,000 new jobs. Those are really
good numbers for manufacturing in the last 25 years.
While times are good for manufacturing in the U.S., there
is a present and growing challenge for manufacturing companies:
They are unable to find people with the skills for their open
positions. According to the U.S. Department of Labor, there are
nearly 400,000 open jobs in manufacturing. And a study done by
Deloitte and the Manufacturing Institute estimated that there
could be as many as 2 million unfilled positions by 2025.
So I thought I would use the reminder of my time today to
talk a little bit about what manufacturers are doing to try to
address this problem.
In Tucson, Arizona, a group of 20 small manufacturers
formed an organization called the Southern Arizona
Manufacturing Partners. Working with the local high school
district, Pima Community College, and the workforce system,
they created a 20-month apprenticeship-style program. This
innovative program has enabled small companies to aggregate
their skill demands and hiring requirements, and several dozen
students are now participating in the program.
In another example, across 9 states and 20 community
colleges there is a manufacturing-led program called the
Federation for Advanced Manufacturing Education. Originally
started by Toyota in Kentucky, hundreds of small companies now
participate in a five-semester apprenticeship-style program
where students spend 3 days a week at work and 2 days a week in
school learning the skills to be an advanced manufacturing
technician. This is an excellent example of how larger
companies support and partner with smaller companies to create
the benefits for the entire industry.
And, Congressman Kelly, Itawamba Community College is one
of those participants.
There is also a long-term concern, though, and that is the
number of young people willing to consider and pursue a career
in manufacturing. This has been a multi-decade challenge for
manufacturers, and the Manufacturing Institute is supporting
programs that help students experience today's manufacturing in
hopes that they will pursue careers in the industry.
Five years ago, the institute and NAM helped create a new
nationwide showcase for our industry called Manufacturing Day.
Companies would open their doors on the first Friday of October
and invite the community in to see what manufacturing is really
all about today. That showcase has now grown to nearly 3,000
events and over half a million participants last year.
In southern California, a small aerospace part supplier
called ACE Clearwater has made Manufacturing Day a really big
deal for them. Last year, ACE had over 500 parents, teachers,
and students participate. They brought out exhibits in 3-D
printing, virtual reality headsets, and welding simulations and
let the students really experience what state-of-the-art
manufacturing is about.
And finally, in Pennsylvania there is a competition that
pairs a team of eighth-grade students with a local manufacturer
where they interview employees and executives and film the
operations of the plant. The students then create and narrate a
video about what is so cool about manufacturing.
The results in Lehigh Valley have really been stunning.
This is where the program started. Last year, over 800 people
attended an awards banquet where they gave awards to the best
videos created. But most importantly, the manufacturing
programs at the local technical high school have seen a 60
percent increase in enrollment since this program started 5
years ago.
The video competition has now gone Commonwealth-wide, with
200 middle schools partnering with 200 manufacturing companies
to create videos in eight different competitions. A very, very
interesting program to gain experience and interest in
manufacturing for people just as they are starting to decide
what career to pursue.
So, Mr. Chairman, the manufacturing sector has struggled to
find the right workers, and it is really impacting our ability
to grow. But companies large and small are creating and
participating in programs that will solve this challenge.
Manufacturing Day is on October 6 this year. That is less
than a month away. And I encourage all of you to try to attend
an event that day and see what manufacturing is like in your
district.
So thank you for the opportunity to testify this morning on
behalf of U.S. manufacturers.
Chairman BRAT. Thank you very much, Mr. Carrick. We
appreciate your testimony.
And so I will just lead off with a general question. This
issue can get a little contentious, because there are always
two sides, right? On the one hand, you are giving me just
example, example, after example of $50,000 jobs which can't be
filled, right, in great career vocations, whatever. You
mentioned there is a cultural shift. And on the other hand,
there are plenty of examples. People say, ``Hey, here is this
job offer,'' and people are lined up around the block, right?
People can't find jobs, right?
And so I taught college for a while, and I don't know
right, about the culture shift piece, or whatever. I am still
kind of a free market guy at heart. There is something going
wrong when you have got $50,000 jobs that aren't getting
filled.
I just want you to all kind of--what would you do if you
are in our spot? Is it a cultural piece? Is it a skills piece.
The schools--the programs you mentioned are great. I applaud
all the folks who are doing it. And in our K-12 system we all
do these little programs, but they are kind of Band-Aids,
instead of just a whole systemic change in K-12.
Back when I went to K-12, the teachers, no matter what
class you were in, if you are in English class, they would tell
you about writing a business memo. But now everyone is just--
the only metric that you are measured on is the SOL test score.
And like you said, the measurement is getting kids to college.
I think Mr. Seilhammer mentioned that.
And so if you were us or if you could wave a wand and
change the cultural component, I mean, what is the big solution
that has to happen? And think big. I mean, President Trump, he
has got a bully pulpit, right? He ran a show called ``The
Apprentice,'' right? I have I told his people, get out at that
bully pulpit, right, and do the apprenticeship thing, right? I
mean, this is huge.
But what would you do if you had carte blanche? Where is
the biggest issue you see? If you all just want to kind of go
quickly, starting with Dr. Farren and then just go right down
the queue.
Mr. FARREN. Thank you, Chairman Brat.
I guess the way that I would look at is kind of what you
have already framed. Steering culture--and I think culture is a
part of this, because 50, 75 years ago going out and getting a
manufacturing job was the ideal--and so steering culture in new
directions and updating people's information takes time. The
ship doesn't turn on a dime.
And so I think initiatives like what has been described
here today, to let people know that new manufacturing isn't
simply working with grease and grime and dirt, but it is
working with computers and it is doing a lot of really skill-
intensive work and that it is highly lucrative and you don't
have to spend 4 years in a university or other--even longer--to
get that kind of job is something that we should really
emphasize to young people and to raise the--Mike Rowe has done
a lot of work kind of raising the cultural consciousness of
manufacturing jobs and dirty--quote, unquote--dirty jobs. So I
think that it is probably a cultural issue.
Chairman BRAT. Mr. Seilhammer.
Mr. SEILHAMMER. Yes. Thank you.
So a couple of things there. First of all, it is getting
involved with your schools. As I mentioned, I am involved with
both of our Vo-Techs.
And I guess one of the fortunate things for me is I get to
share my story. When I was done with high school, I graduated
with honors. I did okay in school. I had no problems. I was
tired of the formal classroom, and I went in the military, and
I became an electrician there. And that set me up the rest of
my life.
And I can tell you, I get to stand up in front of these
kids, and I have gone to graduations as the national president
and done commencement speeches all over the country this year,
and it is pretty awesome to see how proud they are to be
graduating from a program like this.
And what is really kind of neat for them to see me is I
started in those same seats, right? Look where I am today. I am
standing here on--or sitting here on this panel in front of
Congress and giving this testimony. Anything is possible if you
get involved.
And they need to know that you don't have to go to that 4-
year college to do something great. It is a matter of being
involved and paying attention and doing your best and all those
things. And those programs that Mr. Carrick talked about,
things like that matter. Getting involved with the high schools
matters.
And the other side of it, as Mr. Castro talked about, is
getting rid of some of the regulatory stuff. I can tell you, in
Pennsylvania, just locally, we are hamstrung by the ratios. We
have to have three journeymen for one apprentice on a job site.
That is three supervisors for one guy.
Well, let's face it, the bottom is, when you have three
people in charge, nobody is in charge, right? When everybody is
responsible, nobody is responsible. So get rid of some of those
regulatory things that are making us hamstrung.
Think about it. If it was a 1-1 ratio--or in Colorado, it
is the other way, it is 3-1. One supervisor, three apprentices.
Holy cow. We could put a whole bunch more people to work,
couldn't we?
Chairman BRAT. Right. Very good. My time has expired. I
will now yield to the ranking member, Mr. Evans, for 5 minutes.
Mr. EVANS. Thank you, Mr. Chairman.
Mr. Carrick, are you familiar with a book called ``Other
Ways to Win''?
Mr. CARRICK. I am not.
Mr. EVANS. Okay. It was written by a gentleman by the name
of Dr. Gray in Pennsylvania. I am going to piggyback a little
bit on what the chairman raised on this larger issue. When he
talked about other ways to win, he talked about we have sort of
like a tradition thinking the way we approach.
And I am a strong advocate in the area of manufacturing,
because in Pennsylvania, as you know, tool and die makers, and
we are at that critical age of transition in population and how
we make that particular transition.
So you point out an example. And I am familiar with Lehigh
Valley and what has taken place there. The Delaware Valley
Industrial Resource Center, is that a model that you think that
could be used?
Mr. CARRICK. I do. I think they have done a lot of good
work. The Pennsylvania MEP programs, including the
Manufacturers Resource Center in Lehigh Valley and DVIRC in the
Philadelphia region, both do a very good job.
Mr. EVANS. Right. Right. Right.
But do you see--because what I see is sometime taking
examples and building on those type of examples. So can you
speak to a little bit about the examples? Because we talk about
looking at it from a national perspective.
Mr. CARRICK. Sure.
Mr. EVANS. And obviously the culture is different State by
State, location by location. Can you speak little bit to that?
Mr. CARRICK. Sure.
So, unfortunately, the examples that I gave are the
exception, not the norm. There are not enough of these across
the country. I mean, that includes the apprenticeship approach,
whether it is a formal register apprenticeship or a more
informal system, or the ability to aggregate that demand in a
region for small manufacturers so that instead of needing 2
jobs, the 10 companies combined need 20 or 25, and that gets a
lot more attention.
So groups like DVIRC and Manufacturers Resource Center are
there to actually play that sort of coordinator or hub role
where they can speak for and aggregate the voice of
manufacturers in a region.
Unfortunately, there are too few organizations like that
across the country that are able to successfully aggregate
those voices or help to navigate the education system. And,
frankly, the manufacturers sometimes are unwilling or unable to
navigate the educational bureaucracy to successfully set up
apprenticeship programs. So groups like DVIRC are important for
that.
Mr. EVANS. But my understanding, in Japan and in Germany
they used teaching factories. Are you familiar with that?
Mr. CARRICK. I am. Unfortunately, those systems are
different from the bottom up. And Chairman Brat mentioned
waving a magic wand, right? So you would have to really change
everything from the bottom up to recreate a German or a
Japanese style program.
I think there is an opportunity for us to take what is
great about America in terms of individual choice and the
ability to pursue your dreams but still set up the right system
such that individuals can actually achieve a skill set that
enables them to live those dreams.
Mr. EVANS. But would you not agree, if we are going to--you
know, the President talks about economic growth in the ballpark
of 3, 4 percent. And, obviously, we haven't been able to get
there.
Mr. CARRICK. Yes.
Mr. EVANS. So if we are going to get there, we are at a
point where we do have to do something radical. Would you not
agree?
Mr. CARRICK. I do.
Mr. EVANS. Okay. So that is kind of why I talk about
Germany, I talk about Japan, and what they have done. I mean,
clearly, some rethinking, redesigning in our thinking. Because
if we don't, you know, we can kind of hodgepodge or we can kind
of--do we kind of go for the gusto is the issue I am really
trying to push and raise with you.
Mr. CARRICK. I would love to go for the gusto in terms of
the intersection or the integration of companies with the
education system. But we need to properly incentivize the
companies to do so. And how that happens is up to you all. But
companies take on a great deal of risk when they are training
individuals, oftentimes only to see those individuals leave for
other jobs.
Mr. EVANS. But that sort of fits back to what Dr. Farren
talked about, is using the Tax Code as an example to make that
structure change. I assume that is what you are referring to,
right?
Mr. FARREN. Yes, Ranking Member Evans, that is exactly what
I was referring to, allowing companies to do their own training
and treating training as if it were investments in factory
machines.
Mr. EVANS. Right. I mean, if we are going to change, and
using the Tax Code, what I am understanding, using the Tax
Code. I talked about Germany and Japan. But if you want to make
that kind of change, you are going to have to do something if
you are going to get the growth numbers that we talk about as a
country.
Mr. CARRICK. Yes, sir.
Mr. EVANS. I thank you and yield back the balance of my
time. Thank you, Mr. Chairman.
Chairman BRAT. Thank you very much.
I would like to recognize the gentleman from Mississippi,
my good friend, Mr. Trent Kelly.
Mr. KELLY. And hopefully we won't need an interpreter for
these guys, Chairman. Thank you, Mr. Chairman, and our ranking
member.
This is a very important issue to me. And I come from an
area that is booming right now. But we have still got a long
way to go as far as creating workforce. And Itawamba Community
College is a huge part of that, as are Northeast and Northwest
Community Colleges in different areas of my district. But we
have a great community college system in Mississippi, which I
am a product of and a graduate from the educational side. But
there are two sides to it, and both of them are very, very
valuable.
I grew up in a world where I often heard, ``I am the first
member of my family to graduate from college.'' I grew up in a
world where men were ashamed not to have calluses on their
hands to a world now where men are ashamed to have calluses on
their hands. That shows that they have to work hard for a
living. But in the world that I grew up in, men were
embarrassed not to have calluses on their hands.
So it is a traditional shift in what we think is important,
and it should always be about a ways to an end. Whether you get
a college degree or a trade and skill or an apprenticeship, it
should be about what do I want to do, and it should be about
earning power. And we have lost that and turned that where
people just think they need a college education and that
college are now just the end. It is like, if I get a college
education, I am successful. No, you are not. That is a ways to
an end.
And so how do we shift that--and I want each of you--to
shift that where we as Americans now put the earning power and
the skills that that person brings to the table and we put that
on a higher plain than we have a college education where
everyone thinks they need one and deserve one today?
And we will start with Mr. Carrick and come back the other
way, since we have left out other folks going the other way.
Mr. CARRICK. Sure. I think that that is based on some 50-
years-ago thinking, which was that--and it was only a very
small, single-digit percentage of the population that earned a
college degree. So that really was the ticket to a good job and
steady wages and a successful life.
These days there are many different pathways, and it does
not specifically include a bachelor's degree. I mean, it
includes an associate's degree, it includes industry-based
credentials, it includes an apprenticeship.
So understanding that the educational credential or the
path does not--there is no single educational path that leads
to success is the best way, I believe, to ensure respect for
all educational pathways that can lead to good jobs.
Mr. KELLY. Mr. Castro.
Mr. CASTRO. Thank you, Mr. Kelly.
We have a gentleman that came to us 7 years ago through a
program where I was reimbursed for the wages that I paid the
gentleman that came along with another three workers that I
acquired at that time through that program. He is the only one
that stayed. Immediately we noticed he started to succeed in
his ability to think and to thrive. So we pay a lot of
attention to him like we do with anybody else.
But I am happy to tell you that he is making over $100,000
in our company. He doesn't have not even half of an associate
degree. And I parade him--not just him, but the rest of the
people that work with me that are in management, that I brought
them from the ground up--because we are in an industry that
people doesn't look up to when they are looking for a career or
a job. People my age, they will say, ``Oh, I used to bag
groceries here and there.'' You don't hear that anymore on
younger people, you know, we have made it so easy.
But my point, when I go to talk to, whether they are
elementary school students or high school students or grown up,
it is all about your attitude and how to work that will get you
wherever you are. And, of course, not to toot my own horn, I
just tell them, this is what we have achieved as a family, and
you can do so, too.
So we need to change that, and it has been said here all
along, we need to change that culture. It is hard work that
gets you wherever you want to succeed.
Mr. KELLY. I agree.
And that is my whole point, Chairman, is my dad had a high
school education. He was plant manager and very regional in the
furniture industry because he learned how to work every machine
in that factory and he got the best at his job and he was a
visionary. And he understood the engineering parts of it. He
had an engineering mind better than some of the other people
who had engineering degrees, even master's and further degrees.
We need to get back where it is not what kind of education,
it is where you want to go and what best gets me that, and it
is being a visionary and a leader and being the best at your
job, whatever that trade or skill is, whether it is a college
education or welding.
And I thank you, Mr. Chairman. I yield back.
Chairman BRAT. Thank you very much.
At this time, I would like to recognize the gentlewoman
from Florida and my good friend, Stephanie Murphy.
Mrs. MURPHY. Thank you, Mr. Chairman.
And thank you all for your testimony.
You know, when I go out in my district and I talk to the
employers in a wide cross section of businesses, whether it is
construction, manufacturing, tech, healthcare, even call
centers, the number one challenge that they tell me they have
is recruitment and retention of qualified employees. And so I
am particularly grateful for your perspectives.
I find it interesting that I am hearing that from employers
in my district, because I have a district that has probably one
of the most diverse and robust postsecondary education systems.
We have the Nation's largest university, the University of
Central Florida, with over 65,000 students. We have a couple of
community college institutions, Seminole State and Valencia
College, and we have a great liberal arts, Rollins College, and
then a handful of career and technical education and private
institutions. So a really diverse and robust education system.
And yet still, when it comes to our labor force in the area,
the number one issue is recruitment and retention of qualified
workers.
So in Dr. Farren's testimony, you identified the two
possible causes of this skills gap that could be related to our
education system. And the first is the idea that the schools
might not be teaching students the exact skills necessary for
the work that the employers need. And the second is the
guessing game that students have to play when choosing to
invest in higher education, because they are unable to forecast
what skills that will be needed by their employers in the
future.
And in a 2012 McKinsey report, it found that 72 percent of
higher education institutions believe that graduates are fully
prepared for the workforce while only 42 percent of the
employers agree. So that seems to indicate that there is a
communications gap between higher education institutions and
the industries for which the schools are ostensibly preparing
the students.
I am working on a piece of legislation now to implement an
employer needs survey in which we would collect voluntary
feedback from employers across industries on workforce needs.
And then this publicly available feedback would be provided to
colleges and universities so that they can make adjustments to
their curricula to ensure that the graduating students are
ready to join the workforce on day one.
Could you all provide your thoughts on whether you think
such a feedback loop would be valuable in closing that skills
gap? And then do you think that higher education institutions
would be willing to incorporate that kind of feedback into
their curricula? And then, more generally, have you all had any
experience working with institutions of higher education to
help convey skills needs suggestions?
Thank you.
Mr. FARREN. Thank you, Representative Murphy.
So, yes, your idea dovetails very closely with my idea that
we need to address the costs of acquiring new training. And I
think that the survey that you propose could be very valuable.
But perhaps, going back to my initial suggestion of simply
allowing employers to take a tax deduction for training, it
wouldn't have to be in-house training. It might be outsourced
training. Essentially what you would be doing is creating
markets for training new workers in the same way that has kind
of already been discussed here, but more official markets for
it.
And what that would do is create a price signal for the
local secondary institutions to say, ``Oh, we really need to
respond to this new demand because there is profit in it for us
to respond to that demand rather,'' than them saying, ``Okay,
well, we think that our employers in our district need more
math and science or welding,'' or what have you, and trying to
create programs for that, which is kind of a roundabout way of
solving the skills gap rather than the direct way of say what
you need and then go out and purchase what you need.
Mrs. MURPHY. Great. Thank you.
Any of the others witnesses have comments on that?
Mr. SEILHAMMER. Sure. I will comment about it a little bit.
You know, one of the things you asked about is, you know,
you mentioned that the universities and so on, and then the
career fields they go into, do they have the skills that they
need. And what was that, 42 percent said no.
Well, I can give you a personal experience on that. My son,
who, sorry to say, graduated from Penn State--actually, I am
not sorry to say--but he graduated with an electrical
engineering degree. At the same time he was going to school, he
worked for our company for 9-1/2 years in the electrical field.
And so he has now got a great opportunity. He has moved down to
Nashville. He is working with a $30 billion global company. But
he is in a group with 24 new engineers.
And I have asked him. I said, ``So, you know, in the time
that you are down there and you are going through this 3-months
training program with the new engineers,'' I said, ``how many
times did you reference the work that you did in college?''
``Zero.''
I said, ``How many times did you reference the work that
you have done in the field for the last 9-1/2 years?''
He said, ``Daily.''
So there is a huge gap in what they think they need and
what they really do need. And that is one of the great things
about going to the Vo-Tech programs, is some of these folks
that are already in the electrical program or the mechanics
program, whatever they are doing, and getting in there and
getting them--you know, we have got a--we had a young man that
co-op'd with us. So while he is going through his senior year
in high school last year, half a day he is coming to our shop
and working in our prefabrication shop. He is getting
experience with tools, terminology, the understanding of how
things go to together.
So we are doing our best. I mean, we are a small company.
And kind of like Mr. Carrick said, you know, jeez, it would be
nice if everybody was doing this. And then if you want to talk
a little bit about where could the help be, well, we are a
small company, we are footing the bill for this. And we pay for
all of our apprentice classes and everything they go to, and
their books. Holy cow, it would be nice to have a little help
to do that for sure. I mean, fortunately, our company owner is
huge on education, and he believes in growing people. And so
there is a lot to be said for that.
Mrs. MURPHY. Great. Thank you. Thank you for sharing your
personal story.
And I am out of time, so I will yield back.
Chairman BRAT. I think we can run an informal shop. If you
want to--did you have any----
Mrs. MURPHY. Just if anybody else had any other comments,
but other than that, yeah.
Chairman BRAT. Sure. Mr. Castro.
Mr. CASTRO. I have a comment. I was majoring in industrial
engineering when I had to leave El Salvador due to a civil war.
So I found myself here in D.C., actually in Georgetown, doing
dishes and toilet cleaning and other kind of stuff. But it was
fun, you know, make a buck.
But after I learned English and was able to enter Northern
Virginia Community College, which I proudly serve on the
foundation board nowadays, I didn't know what to do. So I took
some classes. One of the classes was called Career Awareness,
if I remember it well, it was like a century ago.
But at the end of the class, I was so pleased that, you
know, anything that I thought, it was completely wrong. The
teacher told me, ``You have a background in construction, you
have a background in engineering. Construction is good here in
the Washington area. I think your easiest way to progress is
construction.''
And I did follow their advice, and I worked in construction
for about 15 years, made my money there, and then we went into
the supermarket business.
So I thought that. And everything I always, you know,
trying to do whatever I can to help Northern Virginia Community
College because they played a big role in finding my direction.
So maybe we can do the same for other young adult people to
help them find the right direction.
Mrs. MURPHY. Thank you.
Mr. CASTRO. Thank you.
Mr. CARRICK. So, Congresswoman, we have thought about what
you are describing, and we think of it as a signaling problem.
Essentially, the way the market is set up is that employers
indicate the skill set that they need through what amount to
want ads, right? So I need a welder. Well, you need to unpack
what it is that you need in that welder in order to actually
tell the education system what skill set to train.
And then you need to aggregate those signals within a given
regional economy so that it isn't just 1 company or 2
companies, but it is 40 or 50 or 100 companies whose skill
requirements and job demands are aggregated, such that they can
then properly signal both the high schools and the community
colleges and the universities and other private training
providers that collectively we have a demand for 200 welders,
50 percent of whom require this skill set, 40 percent of whom
require this skill set.
So I would say there is a need for better clarity in
signaling. How we actually get there, I think, is the big
question. So I am happy to discuss further as your bill
proceeds.
Mrs. MURPHY. Great. Thank you.
Thank you, Mr. Chairman.
Chairman BRAT. Thank you, Stephanie.
Thank you, Dwight.
I want to thank the witnesses for your participation today.
Up here it is kind of you have got to make some noise. And so I
think it is valuable to schedule these hearings to remind us of
the most important issues and just to keep it on our radar. And
so don't go away and be quiet. Keep making noise, spreading the
new culture that we have got to gets to the kids.
That is the mystery, right? I mean, there is a $50,000
signal being sent out in economics land, right? And young
people aren't hearing that one.
And I will just close on a joke. When I taught the kids, I
would always say, ``What are your plans there, Ms. Johnson or
Mr. Smith, whoever, and what are you going to do when you are
done with college?''
``Well, I am going to go skiing in Colorado for a year or
something.''
I am like, ``Okay,'' right? I get done lecturing on the
debt and all these issues and they are going to go off.
So there is a signal, right, the $50,000 signal is not
hitting this generation for some reason. So I applaud you for
all the good ideas. You all gave us very good ideas and input.
Mr. Seilhammer, quick question.
Mr. SEILHAMMER. If I could speak to that real quick. I had
the fortunate ability a couple of years ago, I listened to Bill
Bennett, who wrote ``The Book of Virtues,'' and I got to listen
to him at Messiah College in Pennsylvania.
Chairman BRAT. Yeah.
Mr. SEILHAMMER. And, you know, one of the comments he
made--you talk about going back to fundamentals, and I share
this at my commencement speeches that I have done this year--
but one of the issues is, he says, you know, a lot of people
are saying, jeez, we need better kids. And the truth and the
fact is, no, we need better parents is what we need. So that is
as fundamental as it gets.
Chairman BRAT. Yeah. That might be the signal strengthener
that we need to put forward.
So on that note, I mean, help spread the word. Keep us all
working together as a team.
I ask unanimous consent that members have 5 legislative
days to submit statements and supporting materials for the
record. Without objection, so ordered.
Chairman BRAT. This hearing is now adjourned, and thank you
all very much. And thank you to the staff who always makes this
possible.
[Whereupon, at 11:05 a.m., the Subcommittee was adjourned.]
A P P E N D I X
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Brat, Ranking Member Evans and Members of the
Subcommittee, I'm honored for the opportunity to testify before
you today at this important hearing, ``Examining the Small
Business Labor Market.'' My name is Bruce Seilhammer. I am the
Electrical Construction Group Manager for SECCO Electrical
Construction & Service, based in Camp Hill, Pennsylvania. I'm
here today on behalf of the Independent Electrical Contractors
(IEC), of which I'm currently serving as president, as well as
my chapter, Central Pennsylvania IEC, which is located in
Mechanicsburg, Pennsylvania.
Based in Alexandria, Virginia, the Independent Electrical
Contractors is an association of over 50 affiliates and
training centers, representing over 2,300 electrical and
systems contractors nationwide. IEC's membership consists of
primarily of small businesses, with the average contractor
member having around 30 employees, 20 of which are
electricians. IEC's purpose is to establish a competitive
environment for the merit shop--a philosophy that promotes free
enterprise, open competition and economic opportunity for all.
IEC and its training centers conduct apprenticeship training
programs under standards approved by the U.S. Department of
Labor's (DOL) Office of Apprenticeship. Collectively, in the
2017 school year, IEC will train more than 10,000 electrical
apprentices.
Before getting into the workforce challenges faced by the
electrical contracting industry, I though I'd give you a little
bit about my background. I am a licensed master electrician and
a veteran of the United States Air Force. As a young high
school graduate, I was like many, unsure of my career path.
Tired of the traditional classroom setting, I took an interest
in joining the armed forces and ultimately joined the United
States Air Force in 1982, entering their apprenticeship program
for electricians. The on-the-job training (OJT) and related
classroom instruction provided me the education and skills
necessary to become a journeyman electrician. Upon my honorary
discharge from the service in 1986, I then passed the
Connecticut journeyman's test and received my license.
I give credit to the Air Force's apprenticeship program for
the skills that have contributed to the successful career I
have today in the private sector. I have been with my current
company, SECCO, Inc., for 24 years and have risen through the
ranks to become a part of its senior team, where I oversee over
40 of the company's 90 employees in a construction management
position.
For decades, IEC has been on the forefront providing highly
trained electricians to the industry through its Registered
Apprenticeship program. An IEC apprentice is able to earn while
they learn, incurs little to no debt and enters into a well-
paying job upon graduation. According to the Bureau of Labor
Statistics (BLS), the median salary for an electrician in 2016
was $52,720. IEC's apprenticeship program is certified by the
U.S. Department of Labor's (DOL) Office of Apprenticeship and
State Apprenticeship Councils for use in 38 states and the
District of Columbia. In addition, the American Council on
Education (ACE) has recommended that students that graduate IEC
be eligible for 40 semester hours of college credit. IEC is
also a member of DOL's Registered Apprenticeship - College
Consortium (RACC), a national network of postsecondary
institutions, employers, unions and associations working to
create opportunities for apprentice graduates who may want to
further enhance their skills by completing an Associate's or
Bachelor's Degree. RACC members have their programs evaluated
by a third party organization to determine the college credit
value of the apprenticeship completion certificate. Given its
experience and investment in apprenticeship, IEC continues to
work with the federal government, as a LEADER (Leaders of
Excellence in Apprenticeship, Development, Education, and
Research) in DOL's ApprenticeshipUSA program.
As you are probably aware, electrical contractors, like the
rest of the construction industry, continue to struggle to find
qualified candidates to fill openings all across the country.
According to recent research from the Associated General
Contractors, among all the trades, electrician was the second
hardest position for their members to fill. This challenge is
expected to continue in the coming years, with BLS estimating
there to be a 14 percent increase in demand for electricians
through 2024. Construction employers as a whole are
experiencing trouble hiring new workers with an estimated
500,000 skilled construction jobs currently vacant.
A number of different factors have contributed to the
current workforce shortages in the electrical contracting
industry. One of those is the fact that many left during the
recession and never returned. In addition, much of the skilled
trades workforce is retiring or is approaching retirement.
According to former BLS economist Joseph Kane, about three
million of the current 14.5 million construction workers will
retire or leave the industry over the next ten years.
Unfortunately, our industry cannot keep up with the demand. The
cultural shift in our country over the past few decades has
definitely had an impact on this. A significant emphasis has
been placed on young people to attend a traditional four-year
university, and a career in the trades is rarely discussed as
an option. Parents have grown to believe that the primary
pathway to a successful career and the American dream is
through a traditional college education. Not helping matters is
that many jurisdictions judge the success of their high schools
on the number of students that attend college. In areas where
this is the case, guidance counselors and school officials have
less incentive to suggest students consider entering an
apprenticeship program, like IEC. This, along with enormous
subsidies by the government in the form of student loans, has
made it easier for students to pay for college without fully
understanding the massive debt they are incurring and no
guarantee of a job to pay it off.
Another factor contributing to the construction industry's
worker shortage is the lack of exposure of young people to
skilled trades early as a viable career path. Across the
country, we are seeing less investment in vocational or career
and technical education (CTE) programs in high schools. These
programs offer students the opportunity to work with their
hands early on. They begin to understand what subjects interest
them and these hands-on programs could influence their post-
secondary education decisions. IEC views this as a missed
opportunity to expose students to the skilled trades at an
influential time in their lives, and is why it's critically
important that Congress increase funding for CTE programs
through mechanisms such as the Carl D. Perkins Act, which the
House passed earlier this year.
Every day, IEC chapters and contractor members aggressively
search for people interested in entering our apprenticeship
program to become the electricians of the future. At my
company, we work with local high school Vo-Tech programs to
promote the opportunities that come with being an electrician,
and I personally sit on the occupational advisory committee at
both of our local Vo-Tech schools. Just this year, we hired
four students from these schools and we're looking for more.
IEC's chapters also recruit students by reaching out to tech
schools, placing ads online, and contacting high schools to
promote electrical contracting careers. In the past year, IEC
National launched myelectricalcareer.com, which promotes
electrical careers to young people through sites such as
Facebook and Pandora.
When recruiting candidates for an electrician
apprenticeship, IEC members have trouble finding people that
are qualified to enter the program. Becoming an electrician
requires a high school diploma or GED. Candidates also must
possess solid math skills, and members continue to find that
many interested in our opportunities do not possess the
requisite mathematical ability to advance as apprentices. It's
also becoming more common that young people interested in an
electrical career lack basic ``soft skills'' and don't
understand what it means to be punctual, communicate
effectively, or act professionally in a work setting.
To address labor shortages in the short term, IEC members
will sometimes take steps that are less than ideal. Some
members will loan electricians to a competitor or will utilize
temps, typically as a last resort. Regardless, it is currently
difficult for IEC members to find qualified journeymen
electricians. These workforce challenges we face hurt our
member companies' ability to expand and provide the services
their respective communities need. Currently, my company has 28
electricians, but we could easily use five more journeymen. But
with a limited availability of qualified electricians, we have
to grow our own through apprenticeship. Unfortunately, we are
hamstrung by the state of Pennsylvania, which requires we
maintain a ratio of three journeymen to one apprentice on all
our projects. Government-mandated ratios vary across the
country, and serve as artificial restrictions that prevent us
from training the future electrician and help to close this
skills gap. On a broader scale, with hundreds of thousands of
construction jobs going unfilled year after year, this type of
restriction on the industry will eventually start to impact our
ability to build, repair and maintain our country's
infrastructure, schools, businesses, factories and more. This
inability to hire and train more people will have a detrimental
effect, not only on the construction industry, but on the
country as a whole, as repairing the country's infrastructure
will take longer and increase the cost to the tax payer.
Since all the trades work together or typically have some
impact on each other on construction projects, the skilled
worker shortage faced by other trades can impact us as well,
leading to missed completion dates and increased costs by
having to work overtime. One project we are currently working
on is two months behind schedule because the concrete crews
were short on labor. One IEC member in Florida reports that 80
percent of their projects are delayed due to labor shortages.
Unfortunately, this kind of delay due to a lack of qualified
workers in the trades has become all too common in the
industry.
By virtue of recent hearings, such as the one here today,
IEC is optimistic that legislators are becoming more interested
in developing public policy that will further assist the
skilled trades close the skills gap and increase the number of
men and women entering construction apprenticeships, like
IEC's. We are also excited by the Trump administration's
executive order, which seeks to double federal apprenticeship
funding to $200 million, with a goal of creating 5 million
apprentices in the next five years. However, we are concerned
that language within the executive order will preclude the
industry from benefitting. IEC believes the EO should cover
construction, especially considering the significant labor
shortages in the industry and the opportunity expanding
construction apprenticeships affords to place people into
quality, high-paying careers.
In closing, I want to express IEC's willingness to work
with Congress and the Trump administration to find practical
solutions to address the workforce shortage faced by merit shop
electrical contractors and the construction industry as a
whole. Thank you for this opportunity today to explain the
labor challenges IEC continues to address and I look forward to
answering any questions you may have.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Good morning Chairman Brat, Ranking Member Evans, and
Members of the Subcommittee. My name is Carlos Castro, and I am
the owner of Todos Supermarkets, located in Woodbridge,
Virginia. I have been asked to testify today National Grocers
Association (NGA) on behalf of the Independent supermarket
community. The National Grocers Association is the national
trade association representing the retailers and wholesalers
that comprise the independent sector of the supermarket
industry, including single full-service supermarkets such as
Todos, and multi-state regional chains.
Todos Supermarkets was created in 1990 and aims to fulfill
the needs of an increasingly diverse customer base. To help
better service our customers, we have reshaped our offerings
beyond groceries and offer money transfer, notary, and tax
preparation services.
As the saying goes ``good help is hard to find,'' but at
Todos, we have placed an added emphasis on youth hiring
practices that allow us to train workers and create an
inclusive culture that allows us to retain our employees for
the long-run. Our numerous new offerings have also allowed us
to attract a diverse array of talent and keep our employees on
their toes as our business continues to expand and change. To
help with difficult hiring and training challenges, NGA plays a
key role in the supermarket sector by providing resources,
educational training programs, and sharing industry best
practices with its members that we need to hire, train and
retain a highly qualified workforce.
But costly regulations often take up too much of our time
and resources, and pose as a serious barrier to hiring new
talent. According to NGA survey data, the average grocer can
expect to spend between 40 and 50 thousand dollars a year on
regulatory compliance per store, per year. In an industry with
a 1-2 percent profit margin, that is a significant amount of
resources to be taken away from store improvements, additional
staff, or expanded offerings. Forty to fifty thousand dollars
may not sound significant in Washington, but for an independent
grocer, that can be enough to put a struggling grocer out of
business, or prevent a competitive grocer from hiring new
workers or renovating existing operations in order to keep pace
with the competition.
The current regulatory environment has stifled innovation
and small business growth by forcing us to focus resources on
complying with the tidal wave of regulations, instead of our
day-to-day operations. For the independent supermarket sector,
it is often hard to keep up with the sheer volume of
regulations that have been recently finalized, let alone worry
about the number of potentially harmful regulations going
through the rulemaking process. Regulatory agencies should
focus on evaluating the rules that are currently on the books
and ensure that they are necessary and effective, instead of
churning out new regulations whose costs outweigh the potential
benefits. NGA supports the recent Executive Order requiring
agencies to cut two existing regulations for every new
regulation they implement. We believe this directive will
require regulators to do their due diligence and determine what
rules are truly in the public interest, and which ones have
either outlived their usefulness or have become a drag on
economic growth.
Obamacare mandates on small business serve as a perfect
example of a regulations with good intentions that have created
an additional burden for our business. Todos Supermarkets was
committed to offering health care to employees before the
health care law was implemented. We were not only proud that we
could cover our employees with affordable healthcare, but it
was a hiring incentive that improved both recruitment and
efforts to retain hardworking employees. Now that businesses of
our size must offer health care under the Affordable Care Act,
we can no longer use our previous health care program to
differentiate our company from the competition, and our
expenses have gone through the roof.
The revised joint employer standard from the National Labor
Relations Board is another well-intentioned regulation that
misses the mark. Holding businesses accountable for potential
labor infractions committed by businesses with which they
contract is taking enforcement too far and creates a dangerous
precedent and standard that is impossible for businesses to
maintain. It is challenging enough for businesses to comply
with the mountain of regulations that face us, but penalizing
businesses for the infraction of their potential contractors
creates a precarious environment and disincentivizes businesses
from contracting with outside operations.
Until the federal district court in Texas overturned the
Department of Labor's overtime rule, the rule presented a
serious challenge to our business. The potential doubling of
the salary threshold, and further automatic updates to the
exemption threshold would have created an untenable situation
for small supermarkets. At Todos, we believe in a philosophy of
creating opportunities for our workers and fostering an
environment that encourages our team members to remain with the
company for years. However, we believe that the rule would have
created a disincentive to working efficiently and effectively.
It had the potential to have a substantial negative effect on
morale as some workers would need to be reclassified as hourly
employees, after having worked for years to earn a salaried
status and getting to enjoy the additional flexibility this
designation brings. We are thankful that the rule has been
overturned, and will likely be reevaluated to take into account
regional differences in average salary before being rewritten.
Todos was also pleased to see that the Office of Management
and Budget (OMB) decided not to move forward with a regulation
put forth by the Equal Employment Opportunity Commission (EEOC)
regarding pay data. The regulation would have required that
employers provide pay data for employees based on gender, race,
ethnicity, etc., with the aim of discouraging pay
discrimination. While Todos is firmly committed to paying our
workers a living wage and in accordance with all federal pay
regulations, the EEOC regulation would have captured data
without context and could have made it appear as though an
employer was participating in discriminatory pay practices
despite variances in candidate experience, education level, or
other candidate considerations.
Congress and the regulatory agencies have taken steps
recently to lighten the burden on small businesses like mine.
The recent court order to prevent the implementation of the
overtime rule, and the decision by OMB to not implement the
EEO-1 pay reporting regulation have been a step in the right
direction. While there is not one single regulation dragging
the heaviest on small business, the sheer volume of regulations
that require our compliance is what holds us back. These
burdens both increase the barrier to entry for entrepreneurs
aspiring to enter the market and prevents existing businesses
from expanding or improving their current operations. We must
change the overall regulatory attitude to one of reevaluation
instead of continued expansion.
Additionally, if Congress hopes to improve the current
environment for small business, it should continue working
towards tax reform. Congress took an important step in 2015,
making a number of tax provisions permanent, such as Section
179, which provides small businesses with the flexibility they
need to make large purchases and expense the cost of those
purchases in the first year. However, Congress kicked the can
down the road for many other tax provisions that are important
to independent supermarkets.
Unfortunately, Congress has a tendency to pass retroactive
fixes to the tax code, which hinders our ability to invest in
our future with any degree of certainty.
As Congress turns its attention to tax reform this fall, we
ask that Congress listen to the voice of small business. It is
important to remember the fact that every period of sustained
economic growth in our nation's history can be attributed to
the success of small businesses. With this in mind, I believe
repeal of the estate tax is critically important. As my
business grows and I approach the current threshold, I worry
that I am going to have to pay the tax. The planning issues
that surround this punitive tax draws resources away from
hiring employees and investing in our business.
Congress must also ensure parity between pass-through
entities, like Todos, and business that file as C-corps. In
order to guarantee robust competition between businesses of all
sizes, Congress should tax family-owned businesses fairly and
equally, regardless of how we decide to file our taxes. Many
NGA members also rely on key tax provisions such as the Last
In, First Out (LIFO) accounting method and deductibility of
interest expenses.
Finally, with a workforce and a customer base that is
heavily comprised of a Latino population, I feel compelled to
address President Trump's decision to end the Deferred Action
for Childhood Arrivals (DACA) program. Immigrants that come
here as children as part of families seeking a better life
should not be punished for the decisions of their parents. Some
members of our team utilize the DACA program, and they are some
of our hardest workers. While I understand there are good
arguments on both sides as to whether DACA passes
constitutional muster, it is clear now that the fate of 800,000
young Latinos is now in the hands of the legislature. I urge
Congress to act swiftly in finding a solution to this issue,
and to consider the potential harm that could come from a
failure to act--not only to our businesses, but to communities
and families as well.
All supermarkets face a challenging landscape. The current
market is saturated with competitors that already challenge
each other to gain a foothold and turn a profit. Now, with
goliaths such as Amazon, Target, and Walmart in the market,
that challenge has become even more significant for smaller
operators. However, history has shown that independent
supermarkets are both resilient and flexible in keeping up with
competition. I am confident in the ability of our company and
other independent grocers to adapt and innovate in response to
changing consumer demands and a fiercely competitive
marketplace.
On behalf of Todos, the National Grocers Association, and
the independent supermarket industry, I would like to reinforce
our commitment to hiring, training, and retaining the best
talent possible. We aim to provide our communities with service
and products that are of the highest quality, and we know that
this can only be achieved by hiring good people, and treating
them like family.
At Todos, we often say ``if you have a good attitude and
work hard, there is no limit to how high you can rise.'' With
business, it should be the same. I would ask our elected
representatives to continue look for opportunities to unshackle
businesses from their heavy regulatory burden, and let
businesses like mine see how high we can go.
Thank you,
Carlos Castro
Founder, Todos Supermarkets
TESTIMONY OF GARDNER CARRICK, VICE PRESIDENT, STRATEGIC INITIATIVES
THE MANUFACTURING INSTITUTE
BEFORE THE
SUBCOMMITTEE ON ECONOMIC GROWTH, TAX, AND CAPITAL ACCESS
COMMITTEE ON SMALL BUSINESS
U.S. HOUSE OF REPRESENTATIVES
SEPTEMBER 7, 2017
Chairman Brat, Ranking Member Evans, and members of the
Subcommittee on Economic Growth, Tax, and Capital Access, thank
you for the opportunity to testify about the workforce
challenges facing small manufacturing companies in the United
States.
My name is Gardner Carrick and I am the Vice President of
Strategic Initiatives at the Manufacturing Institute. We are
affiliated with the National Association of Manufacturers, the
nation's largest industrial trade association and voice for
more than 12 million men and women who make things in America.
It is the mission of the Institute to attract, train and
develop the world-class talent that manufacturers need to
compete in the global economy. In partnership with some of the
country's leading firms, we identify trends and gaps in
manufacturing skills and training and, working with partners
around the country, we develop programs to close those gaps.
Among our many initiatives, our Dream It. Do It. program has
partners in 41 states and regions to develop interest in
manufacturing skills among youth, and programs with educational
institutions that cultivate their interest in manufacturing and
ensure that the skills being taught are ones that are in need
by manufacturers. Additionally, the National Association of
Manufacturers recently launched a nationwide campaign to
improve the perception of manufacturing via the recently
announced ``Creators Wanted'' campaign, to improve the
perception of manufacturing as a career path. The Manufacturing
Institute will be engaged in this effort to help educate the
public about manufacturing careers and to direct those who are
interested to programs and activities to further their skills
and toward high skilled jobs.
Manufacturing is a critical component of our nation's
economy. Companies in manufacturing produce everything you see
around you. While everyone has heard of the biggest companies
in manufacturing, it is small companies that are the backbone
of the industry. The vast majority of manufacturing firms in
the United States are quite small. According to the Top 20
Facts About Manufacturing published by the National Association
of Manufacturers, in 2014, there were 251,901 firms in the
manufacturing sector, with all but 3,749 firms considered to be
small. In fact, three-quarters of these firms have fewer than
20 employees. They provide good jobs in every city, town, and
community across the country. And today, manufacturing is
enjoying a renaissance in the United States.
Since the end of the last recession, manufacturing
companies have added over 1 million jobs and in this year
alone, companies have added nearly 140,00 new jobs. Companies
are choosing to locate new operations in the U.S. and this is
having a growth effect down the entire supply chain. And
companies are optimistic about the future as well. According to
the most recent Manufacturers' Outlook Survey from the National
Association of Manufacturers, 90% of companies are optimistic
about their own company's outlook.
While times are good for manufacturing in the U.S., there
is a present and growing challenge for manufacturing
companies--they are unable to find people with the skills
required to fill their open jobs.
According to the United States Department of Labor, there
are nearly 400,000 open jobs in manufacturing. This is up 13%
from the end of last year, and 36% from just two years ago.
Looking at the longer-term picture, a study done by Deloitte in
partnership with the Manufacturing Institute estimated that, by
2025, there could be as many as 2 million unfilled positions in
manufacturing. These jobs offer family supporting pay, generous
benefits, and strong career growth potential. According to the
Top 20 Facts About Manufacturing published by the National
Association of Manufacturers, in 2015, the average
manufacturing worker in the United States earned $81,289
annually, including pay and benefits. The average worker in all
nonfarm industries earned $63,830. Looking specifically at
wages, the average manufacturing worker earned over $26.00 per
hour, according to the latest figures, not including benefits.
These jobs need to be filled if the manufacturing sector and
the U.S. economy is going to remain strong and globally
competitive. Fortunately, manufacturing companies are stepping
up to offer solutions to this challenge, in partnership with
local high schools, community colleges, and technical schools.
The activities of manufacturers fall into two broad
categories: 1) filling the immediate needs for skilled workers;
and 2) strengthening interest in manufacturing careers to fill
the long-term need for skilled workers. I would like to
highlight a few examples of where smaller companies are engaged
in these activities.
In the Tucson, AZ region, a group of twenty small
manufacturers formed an organization called the Southern
Arizona Manufacturing Partners. Working with the local high
school district, Pima Community College, and the workforce
system, the Southern Arizona Manufacturing Partners created a
20-month apprenticeship-style program. Graduating high school
seniors interview with and are hired by one of the
participating companies. They then enroll at Pima Community
College in machining, eletromechanical systems, or another
industrial technologies program where they receive concurrent
instruction in their new field of employment. This innovative
program has enabled small companies to aggregate their skill
requirements and hiring demands and receive recognition and
support from the local educational institutions and workforce
services agency. The program has grown to where several dozen
students now participate annually. The Manufacturing Institute
has a strong partnership with Pima Community College and has
supported this apprenticeship-style program from its inception.
In Tulsa, OK, coalition of workforce, education and
industry partners dedicated to raising awareness of
manufacturing careers joined the Manufacturing Institute's
Dream It Do It program. As part of the Dream It Do It
activities, a small auto parts manufacturer called APSCO
created an internship program for high school students who are
interested in a manufacturing career. Students from three area
high schools tour APSCO's automotive parts fabrication and
assembly facility in the fall and interested students are
interviewed and selected for its Certified Production
Technician internship program. Interns train as a production
technician for three hours a day from January to May and are
paid $10 an hour. 45 students participated in this past year's
program and APSCO has coordinated with other small
manufacturers in the region so that those students not hired by
APSCO at the completion of the program have interview and
employment opportunities at other local manufacturing
companies.
Across nine states on the Gulf Coast and in the lower
Midwest, there has a grown a manufacturing-led program called
the Federation for Advanced Manufacturing Education. Originally
started by Toyota Motor Manufacturing in Kentucky, FAME is a
five semester apprenticeship style degree program where
students spend three days a week at work and two days a week in
school learning the technical skills, manufacturing culture,
and soft skills necessary to be an Advanced Manufacturing
Technician. Though Toyota was the original sponsor, they opened
the program to all companies and now hundreds of small
manufacturers are participating with the twenty partner
community colleges, hiring hundreds of new employees annually.
And it is a model that is now expanding to include other in-
demand positions within manufacturing. This is an excellent
example of how larger companies support and partner with
smaller companies to create an education, training, and
employment program that benefits the entire manufacturing
industry and the communities where they are located.
While these programs are training students and hiring new
employees for immediate job openings, there is still a longer-
term concern about the number of young people willing to
consider and pursue a career in manufacturing. This has been a
multi-decade challenge for manufacturers that is now a critical
concern as total jobs in manufacturing have rebounded and
continue to grow. The Manufacturing Institute has partnered on
several research studies to inform the best strategies for
attracting young people to our industry.
In a nationwide survey of high school students, the
Manufacturing Institute, in partnership with the Educational
Research Center of America, found that the overwhelming
majority of them selected their own experiences and interests
as the most important factor in determining what career to
pursue. And in a Public Perception of Manufacturing study,
conducted by the Manufacturing Institute in partnership with
Deloitte, Americans that were familiar with manufacturing were
twice as likely to pursue a career in manufacturing or
encourage their children to do so. These results suggest that
they best way to encourage more Americans to consider careers
in manufacturing is to provide them with experiences that
increase their familiarity with today's modern manufacturing
industry.
Allow me to highlight a few examples of small manufacturing
companies that have done just that.
Five years ago, working with the Founding Partner, the
Fabricators and Manufacturers Association, International, the
Manufacturing Institute and the National Association of
Manufacturers helped create a new nationwide showcase of our
industry called Manufacturing Day. Companies would open their
doors on the first Friday of October and invite the community
to see what modern manufacturing looks like in their plant.
That showcase has now grown to nearly 3,000 events and half a
million participants.
In Southern California, a small aerospace parts
manufacturer called ACE Clearwater has made Manufacturing Day a
really big deal. Last year, ACE Clearwater had over 500
parents, teachers, and students witness and participate in
modern-day manufacturing. Exhibits like 3D printing, laser
cutting and water jet demonstrations, hands-free computer
interaction, hydro-forming, virtual reality headsets, and
welding simulations were provided by ACE and sponsor suppliers
to give attendees an in-depth understanding of state-of-the-art
manufacturing. The event features at least 15 work centers
where students learn all about the manufacturing process and
new technologies that make manufacturing exciting and creative.
At the conclusion of last year's event, nearly 50 participating
community college students immediately applied for open
positions.
In Mequon, WI, a small fabrication company called GenMet
has been extremely active on workforce issues including serving
on the Manufacturing Institute Board of Advisors. One of its
most innovative programs is a teacher externship. Over the past
few years, GenMet has hired three local high school teachers to
work for the summer in its facility. As a result, these
teachers have a better understanding of concepts they teach in
their classroom using what they learned at GenMet. Teachers are
able to use real-life analogies to explain to their students
what they learned from their experience. By hiring teachers,
GenMet can reach an entire classroom of students and help
change the perception of manufacturing showing teachers what
modern manufacturing looks like.
And finally, in Pennsylvania, there is a competition to
create the best 2-minute video describing What's so Cool about
Manufacturing. Started by the Manufacturers Resource Center in
the Lehigh Valley as part of the Manufacturing Institute's
Dream It Do It program, the competition pairs a team of eighth
grade students with a local manufacturer where they interview
employees and executives and film the operations of the plant.
The students then create and narrate a video about why their
company best describes What's so Cool about Manufacturing. The
community then votes on the videos through YouTube and the
Manufacturers Resource Center hosts an awards banquet at the
conclusion. The results in Lehigh Valley have been stunning,
where last year over 100,000 votes were cast on YouTube, over
800 students, parents, companies, and community leaders
attended the awards banquet, and most importantly, the local
technical high school manufacturing programs have seen a 60%
increase in enrollment since the competition began 5 years ago.
The video competition idea has now spread across the
Commonwealth and this year, 200 middle schools will partner
with 200 hundred manufacturing companies in eight different
regional competitions. It is an excellent example of how small
companies can partner with middle schools to make a significant
impact on a student's perception of manufacturing just as he or
she is deciding what to study in high school.
Mr. Chairman, the manufacturing sector has struggled to
find the right workers and it is impacting our ability to
successfully compete in the global economy and grow our
industry. But companies large and small are creating and
participating in programs that will solve these challenges. I
am proud of the work of these companies and The Manufacturing
Institute and the National Association of Manufacturers will
continue to support these efforts in regions all across the
country.
Mr. Chairman, Manufacturing Day is on October 6th, less
than a month from now. I encourage you, the members of this
subcommittee, and all the members of Congress to attend one of
these events. Come see what modern manufacturing looks like and
speak with some of the 12 million men and women that make
American manufacturing strong.
Thank you for the opportunity to testify this morning.
[all]