The CHIPS and Science act, passed in August 2022, set aside $280 billion for the development and manufacture of semiconductors, based on the reasoning that too much of that manufacturing was being done overseas. But a law can only get you so far: in order to create new semiconductors, employers and communities needed to find workers to actually manufacture them.

These were high-stakes decisions, and that meant they needed the best workforce data available. How many workers would be needed overall? What kinds of jobs would be needed? Which skills would be most in demand? What regions were best prepared for the development of new semiconductor facilities, based on the skills of the workforces already in those areas? 

Those aren’t rhetorical questions—they require answers. The good news is that those answers are available in labor market data. Publishing Rebuilding Our Semiconductor Workforce: Making the Most of the CHIPS Act, Lightcast ranked metro areas by how ready they were to produce semiconductors (San Jose, CA; Portland, OR, and Huntsville, AL topped the list), identified which workers could make the switch to semiconductor jobs, and also put a number on the total number of workers needed: 236,878. 

Almost three years later, American manufacturing is in the spotlight again. But the sweeping proposed tariffs don’t target a specific subsection of US manufacturing like CHIPS did; they represent a much larger shift intended to boost the entire US manufacturing industry, which means increased production and added jobs. 

But where are we going to find the workers? 

The Workforce Risk Outlook

Manufacturing is a pillar of the US economy; it’s the fourth-largest contributor to GDP out of all industries and contributes $2.64 to the economy for every dollar spent. But while while the products of durable manufacturing are built to last, Lightcast experts have been studying the industry and have found that its workforce might not be.

The manufacturing workforce is leaving the industry via two routes: some are retiring, and others are leaving manufacturing jobs to work in other industries. 

 The share of prime-age working adults in the US has stagnated overall, and within the manufacturing sector, 3.7 million out of 13.2 million embedded workers–just over a third–are approaching retirement.

Meanwhile, the increasingly digital nature of manufacturing is showing up in skill demand: here are the top five skills projected to see the highest growth in demand over the next two years. 

Skills and their projected 2-year growth

• Automation: +30.5%

• Lean Manufacturing: +28.1%

• Process Improvement: +27.0%

• Data Analysis: +25.8%

• Scalability: +25.2%

Manufacturers need technicians, programmers, data analysts, and engineers to design, maintain, and oversee automated systems. However, the prime-age talent pool (ages 25-54) is seeing far more exits than entrances for the occupations necessary in manufacturing automation.

This data comes from new Lightcast e-book, Are You Prepared for a Vanishing Manufacturing Workforce? Rethinking How Work Gets Done in the New Labor Market Reality.  In an industry where 83% of manufacturers say that attracting and retaining a quality workforce is their top challenge, the guide breaks down how a multi-pronged, future-ready approach to workforce planning, organizations can mitigate risk, improve competitiveness, and ensure that the work gets done—not just today, but in the years ahead. It’s worth a read. 

What States Have The Most Manufacturing Jobs Per Capita? How Does That Compare to Average Wages?

If we want to understand how the manufacturing industry will shape the US, it’s helpful to know which parts of the US it affects most right now. Lightcast data shows that Wisconsin, Indiana, and Iowa hold the top three spots for manufacturing employment per capita, underscoring the deep roots of the industry in the Midwest. Conversely, the District of Columbia, Hawaii, New Mexico, Maryland, and Alaska represent the lowest concentrations.

There’s no clear correlation between a state’s manufacturing concentration and the average salary of manufacturing workers, which Lightcast data also provides. This suggests that a shortage of manufacturing workers isn’t a problem that can be solved by simply offering higher salaries.

This isn’t unique to manufacturing. The Rising Storm, Lightcast research published last year, identified that an increasing number of workers, especially younger ones, are pursuing office-based jobs that require a college degree, even though many jobs without that degree requirement pay more. The greatest need in the present-day labor market is for jobs that do not require a college degree. 

That was true even when US manufacturing demand was holding steady. If decreased imports mean we need more American manufacturing to keep up, that poses a problem. 

So What Can We Do?

The Vanishing Manufacturing Workforce report offers a few solutions. 
Upskill the Existing Workforce: Proactively train current employees in advanced technologies and implement knowledge transfer programs from retiring workers.

Attract Younger Talent: Highlight the technological advancements and growth opportunities within modern manufacturing to appeal to the next generation; cultivate a positive workplace culture.

Explore Diverse Talent Pools: Consider skills-adjacent tech workers, local development initiatives, immigration, and globalization (while being mindful of current complexities).

Leverage Automation and Skilled Employees: Integrate automation to address shortages, but also invest in employees who can manage and maintain these systems.

Bridge the AI Skills Gap: Develop AI and data analytics skills across the workforce, including in traditionally less tech-focused roles, to optimize operations and fill talent gaps.

While the desire to revitalize US manufacturing is strong, the path forward requires more than just policy. It demands a strategic and data-driven approach to address these looming workforce challenges. Understanding workforce demographics, skill gaps, training effectiveness, and the impact of automation requires robust data collection and analysis. Manufacturing businesses must embrace data-driven decision-making to effectively target upskilling efforts, tailor recruitment strategies, optimize automation implementation, and ultimately, build a resilient and future-ready workforce. 

Thanks for reading On The Job. Be sure to catch up on our past issues, including "Return-To-Office is Creating Two Classes of Worker," "The Inflation Equations,“ and you can also subscribe here. We’ll see you next time.