Manufacturers Cite Lack of Worker Skills

WASHINGTON —  U.S. manufacturers say half of their current employees lack basic reading, writing and math skills, according to an industry survey released Friday.

Although employers are investing more to educate and train their employees, a shortage of skilled workers seen since 1991 hasn’t improved, said the study, conducted for the National Assn. of Manufacturers by the accounting firm Grant Thornton.

Of the 4,500 manufacturers surveyed, 60% said their current workers lack basic math skills, and 55% said their workers have “serious deficiencies” in basic writing and comprehension skills. Almost as many--48%--said their workers “lack the ability to read and translate drawings, diagrams and flow charts,” the study said.

“The shortage of skilled employees is not a distant threat anymore,” said Earnest W. Deavenport, chairman of Eastman Chemical Corp. and new chairman of the manufacturers group. “The skills gap is now catching up to us and could threaten the amazing growth and productivity gains of the past decade.”

Improvements in worker productivity--the time and effort it takes to produce goods and services--are crucial to businesses if they want to boost worker pay while holding down prices.

“Today’s much healthier economy and increased product demand is creating an increase in demand for high-skilled labor,” Deavenport said.

Nevertheless, NAM said skills deficiencies threatened to erode competitiveness if the problems were not addressed.

“The lesson is clear,” the NAM and Grant Thornton survey said. “Either we reform our work force preparedness, training and skill development efforts . . . or we see new production and processes and technologies being applied in other economies that enjoy the type of work force that can apply them properly.”

The Labor Department reported this week that nonfarm productivity rose at a larger-than-expected 4.5% annual rate in the quarter ended Sept. 30--the biggest gain since the fourth quarter of 1992.

Manufacturing productivity alone posted the biggest increase in 15 years, while a measure of labor costs tied to productivity declined for the first time in more than three years, the government said.

The NAM report found that two-thirds of the companies surveyed provide remedial help in reading, writing, math and problem-solving skills. Nearly half of the manufacturers--47%--said they now spend as much as 2% of their payroll costs to train shop-level and hourly workers, up from 1991 when companies spent less than 0.5% of their payrolls on training.

Deavenport called for a restructuring of the public school system and asked companies to enter into partnerships with schools for equipment donations, co-op programs, summer jobs programs and tutoring or mentoring programs.

The federal government for its part needs to combine its “hodgepodge” of training programs and improve incentives to train workers on the job, including permanent tax benefits for employer-provided education, Deavenport said.

A full study by the association on the shortage of skilled labor will be released in January.

The survey was a follow-up to a 1991 poll conducted by NAM that also found concerns about a lack of worker skills.

Deavenport said the problems have worsened since the last survey, taken the year the U.S. began emerging from a recession. Unemployment since then has tumbled to a 24-year low of 4.7%, while the labor force overall has grown rather slowly.