Part seven of an ongoing series based on our recent PPI report:
Bridging the STEM skills gap: Employer/educator collaboration in New York
New York’s manufacturing sector has seen tough times, but with technological changes and the rise of advanced manufacturing, the sector is rebounding and jobs are coming back.
“We often talk about, ‘can we bring back good jobs in manufacturing’—and by that, we mean jobs that pay good wages with just a high school degree,” says Chauncy Lennon, Managing Director and Head of Workforce Initiatives, Global Philanthropy at JPMorgan Chase. “Those jobs are shrinking and will continue to, mostly because of technology. We are seeing jobs coming back in manufacturing, but they are advanced manufacturing jobs that require a high school degree and some type of post-secondary training.”
“Getting people interested in these careers is challenging—especially young people,” says Bruce Hamm of the Manufacturers Association of Central New York (MACNY). “Historically, over the last few decades, we’ve had so much manufacturing leave New York because of offshoring; we were one of the rust belt states. The fact that modern manufacturing has changed the whole equation hasn’t penetrated to the public, the schools, the kids, or the parents for that matter.”
Lennon agrees. “Factories used to be dirty, dark, and dangerous,” he says. “Today, they are clean, well-lit, and safe”—with high-tech machines and increasingly automated production.
According to Hamm, teachers and school counselors may not be aware of how the manufacturing sector has changed, and that as a result, “going into manufacturing is not even considered.” He says that some of the best preparation for the new manufacturing jobs can be done in the public schools—career and technical education programs and Boards of Cooperative Educational Services—as well as community colleges.
A lot of these jobs are not four-year-degree jobs, they’re complex technical jobs that need middle skills. There are excellent jobs available as machinists and welders—we’ve got welders making six-figure salaries, and a good machinist can easily be fifty to sixty thousand dollars a year. Most of the apprenticeships that we’re creating now have ending salaries in the $50,000 range, so they’re coming out with $25 an hour, plus or minus.
And the pace of manufacturing job creation may be picking up. The Business Council’s Briccetti notes that the tax climate for manufacturing and emerging technology companies based in New York State has become more favorable in recent years. In 2014, New York State reduced the effective tax rate for “qualified manufacturers” to zero percent and enacted additional tax breaks targeting the manufacturing and emerging technology sectors, with the goal of stimulating investment and employment.
The environment could improve even further if the federal government enacts additional corporate tax reforms such as the one proposed by House Speaker Paul Ryan (R-WI). “The current system for taxing foreign profits of American corporations incentivizes companies to build offshore,” Briccetti says. “Ryan’s proposal would flip the national tax incentives.” Under his plan, companies would be taxed based on where their products are sold—rather than where they are produced (or where the corporate headquarters or intellectual property are located. Thus, imports would be subject to federal tax while exports would not. By not taxing exports, the plan would incentivize U.S. companies to produce goods domestically.