Forbes, Allison

Lowe, Nichola

Rabbani, Rumana

Schrock, Greg

Wilson, Matthew D.

English

Upjohn Research

Employment Research Newsletter Volume 30 Number 3 Article 2 8-8-2023 How the Manufacturing Extension Partnership Can Anchor U.S. Workforce Development Matthew D. Wilson Great Cities Institute, University of Illinois Chicago, mwilso25@uic.edu Nichola Lowe The University of North Carolina at Chapel Hill, nlowe@email.unc.edu Greg Schrock Portland State University, gschrock@pdx.edu Rumana Rabbani The University of North Carolina at Chapel Hill, rumana.rabbani@unc.edu Allison Forbes Center for Regional Economic Competitiveness, aforbes@crec.net Follow this and additional works at: https://research.upjohn.org/empl_research  Part of the Labor Economics Commons Citation Wilson, Matthew D., Nichola Lowe, Greg Schrock, Rumana Rabbani, and Allison Forbes. 2023. "How the Manufacturing Extension Partnership Can Anchor U.S. Workforce Development." Employment Research 30(3): 4-7. https://doi.org/10.17848/1075-8445.30(3)-2 This title is brought to you by the Upjohn Institute. For more information, please contact repository@upjohn.org.              EMPLOYMENT RESEARCH  • JULY 2023 W.E. UPJOHN INSTITUTE Why Are Unemployment InsuranceClaims So Low? Additional factors may also be important. Future research should investigate the roles of declining unionization rates and the possibly growing shif from wage and salary to contract employment. Note 1. Nine states permanently cut potential durations in 2011 and 2012. Te nine states, with their 2019 average potential UI durations in parentheses, are as follows: Arkansas (17), Florida (12), Georgia (14), Idaho (16), Kansas (15), Michigan (20), Missouri (20), North Carolina (12), and South Carolina (20).  Many of these states also let weekly beneft replacement rates decline since 2012. References DeAntonio, Dante. 2018. “Why Are U.S. Unemployment Insurance Claims So Low?” Economic View Report No. 348474. New York: Moody’s Analytics. https://www.economy.com/economicview/ analysis/348474. O’Leary, Christopher J., Kenneth J. Kline, Tomas A. Stengle, and Stephen A. Wandner. 2023. “Why Are Unemployment Insurance Claims So Low?” Upjohn Working Paper No. 2023-383. Kalamazoo, MI: W.E. Upjohn Institute for Employment Research. For additional details, see the full working paper athttp://research.upjohn.org/up_workingpapers/383. Christopher J. O’Leary is a senior economist,Kenneth J. Kline is a senior research analyst, andStephen A. Wandner is a research fellow, all atthe Upjohn Institute. Thomas A. Stengle retired asthe lead actuary for the Ofce of UnemploymentInsurance in the U.S. Department of Labor. How the ManufacturingExtension PartnershipCan Anchor U.S.Workforce Development Matthew D. Wilson, Nichola Lowe, Greg Schrock, Rumana Rabbani, and Allison Forbes As the U.S. economy rebounds from the COVID-19 pandemic, strategies that promote long-term transformation toward high-quality jobs will be critical. If not sufciently addressed, long-simmering workforce shortages, which intensifed during the pandemic, could undermine job growth. Manufacturing is a case in point. Leading up to the pandemic, an estimated 500,000 manufacturing job openings went unflled. For some legacy manufacturing regions, especially those with many older businesses that have not modernized their technology, difculties with worker recruitment and retention are especially pronounced. Te “Great Resignation” of 2021–2022 has only worsened matters, with workers voluntarily quitting jobs at historically high rates.  Although this phenomenon is widespread, it has added to the particular challenges facing the manufacturing sector. In a related paper, we ofer a promising institutional fx: centering workforce development within the U.S. Manufacturing Extension Partnership (MEP), a program based at the National Institute of Standards and Technology (NIST), within the U.S. Department of Commerce. In this brief, we summarize how this could work by documenting the workforce- and workplace-enhancing strategies that MEP centers have adopted since their inception in the mid-1990s. While workforce development is unevenly implemented across today’s MEP network, leading centers within the network are devising strategies to transform business practices to improve the quality of frontline manufacturing jobs. Our discussions with MEP network leaders and center directors point to three concurrent approaches that MEP centers have adopted to better integrate workforce solutions in their service delivery models: ARTICLE HIGHLIGHTS n By coupling workforce services with customized business assistance, the Manufac-turing Extension Partnership (MEP) provides a promising model to address a range of operational and competitive challenges faced by manufacturers.n Between 2011 and 2019, MEP centers grew their number of workforce projects nearly sevenfold, and the share of all MEP projects in workforce jumped from 3 to 12 percent.n MEP leaders viewed the COVID-19 pandemic as an opportunity to scale workforce development services intended to address preexisting workforce concerns that were exacerbated by the pandemic.n MEP centers have increasingly shifted their emphasis from skill development meant to help individual workers find jobs to preparing the workplace to attract, train, and nurture the manufacturing workforce. 4               EMPLOYMENT RESEARCH  • JULY 2023 W.E. UPJOHN INSTITUTE 1) Closely couple high-demand business services with workforce services. MEP center staf pair services explicitly requested by employers, such as lean process improvement services, product design and development, and marketing and sales assistance with workforce services. 2) Don’t just help individual workers move into jobs; prepare the workplace to attract, retain, and nurture the manufacturing workforce. MEP staf assist employers in identifying and resolving problematic organizational, interpersonal, and institutional dynamics, helping to improve the workplace and job quality. 3) Leverage the immediate need for workforce development services during the pandemic to scale these services more broadly and for the longer term. Te COVID-19 pandemic has exacerbated preexisting concerns around workplace safety and employee beneft costs, but MEPs can emphasize job-improvement strategies to make frms more viable and resilient to future crises, whether due to health, climate, or other factors. MEP Workforce History and Overview On their own, traditional workforce development institutions—such as community colleges, vocational training centers, or even worker-advocacy groups—are unlikely to solve the problems of high workforce vacancies and turnover. Tese institutions focus too narrowly on preparing individual job seekers to enter the labor market rather than helping businesses develop and sustain efective in-house workforce solutions. Tis is especially the case when it comes to manufacturing frms, especially those that are smaller or lack resources for efective training. Tese businesses need help to develop their workforce, but that help must come from organizations with a deep working knowledge of established manufacturing systems and practices, along with sufcient network reach to infuence meaningful and enduring change. Tose characteristics are found within the U.S. MEP. Te MEP dates to 1988, when federal industrial policies designed to boost the global competitiveness of U.S. regional manufacturing economies were adopted. Today, every state (plus Puerto Rico) has one or more MEP centers, and they collectively employ around 1,400 manufacturing specialists who provide technical assistance to more than 11,000 small and medium-sized manufacturing frms annually. Workforce development—programs and institutions that support investments in workforce skills and improvements to jobs through career pathways—is an evolving focus for MEP. While state- and local-level MEP centers universally promote process and product improvements, growing numbers are experimenting with complementary strategies that push changes to workplace structures and routines that improve the manufacturing work experience, thus increasing frontline worker retention. MEP Workforce Expansion and Experimentation MEP representatives are well-positioned to diagnose job quality and other related workforce problems since they help business owners and managers address a range of operational and competitive challenges. However, we know relatively little about MEP’s engagement with workforce development. To address this question, we conducted interviews with leadership from the national MEP system, including with directors from 10 MEP centers, to gain insight into how MEPs have helped manufacturers navigate employment challenges and opportunities. Between 2011 and 2019, MEP centers reported that their number of workforce projects grew nearly sevenfold, and the share of all MEP For decades, federal and stateworkforce development systems,including those focused on U.S.manufacturing, have sought toaddress purported skills shortages,rather than tackle broaderconcerns related to workerretention and turnover. projects in this domain quadrupled, from 3 percent to 12 percent (Figure 1). But within that decade, workforce activities waxed and waned. Tere was a signifcant surge in workforce projects between 2013 and 2015, led by centers in states like Ohio, Pennsylvania, Illinois, and Iowa; growth ebbed to some extent in 2016 and 2017, only to bounce back afer 2018. Over time, more centers engaged in workforce activities. By 2019, workforce projects accounted for at least one-tenth of the total projects for 30 out of 50 centers (Figure 2).    During this time, MEP renewed eforts toward a national, systemwide approach to workforce development programming, promoting learning and difusion across centers. Tese eforts included, for example, providing a three-year, $1 million grant to the Missouri center to start a new initiative called America Works. Implemented in partnership with MEP centers in northeast Ohio, New Jersey, Iowa, and Indiana, and managed by workforce staf from Cleveland, America Works centralizes and coordinates workforce services nationally, and shares best workforce practices throughout the network (Fieldman 2021). 5                   EMPLOYMENT RESEARCH  • JULY 2023 W.E. UPJOHN INSTITUTE How the Manufacturing Extension Partnership Can Anchor U.S. Workforce Development Figure 1  MEP Workforce Services Projects by Year, 2011–2021 staf intentionally introduce options for concurrent improvements on the 3,000 16% workforce side. 14% Te second strategy involves shifing 2,500 emphasis from preparing individual W.E.UPJOHN INSTITUTE 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Share of all MEP projects workers for specifc jobs to preparing the workplace to attract, retain, and nurture the manufacturing workforce. Tis involves identifying and resolving problematic organizational, interpersonal, and institutional dynamics. Training and technical skill 12% 10% 2,000 Projects 1,500 8% 6% 1,000 500 0 Workforce services projects Workforce % of total projects SOURCE: Authors’ calculations of NIST-MEP administrative data. Figure 2  MEP Workforce Service Project Difusion, 2011–2021 50 4% development are extended beyond frontline manufacturing workers to also 2% support supervisors, managers, and executives. Even the most technically 0% sophisticated workers, as well as top-level managers and executives, need to learn how to supervise and lead. While actions taken by MEPs can vary, the key is a shared emphasis on resolving an “interest gap” rather than a “skills gap”—the job of employers is to provide a supportive environment that values worker ingenuity and supports ongoing career success. Te third strategy comes out of 45 the disruption from the COVID-19 Centers with workforce development ≥ 10% of total projects Centers with workforce development < 5% of total projects W.E.UPJOHN INSTITUTE 40 35 pandemic, which exacerbated preexisting workforce concerns about safety. Many MEP centers, not just those at the frontier of workforce programs, ofered services in 2020 to help client frms reopen their factories # of MEP centers 30 25 20 15 10 5 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 safely afer an initial closure and avoid a subsequent shutdown by minimizing the risk of the virus spreading throughout the worksite. Te pandemic also reinforced the connection between business performance and employee benefts, including paid sick and family care leave, that enabled workers to stay home and care for themselves or family members, further reducing the risk of workplace infection. Some pioneering centers even explored options for helping clients and their workers navigate school closings. Te pandemic also catalyzed new approaches to ongoing workforce training, with MEP centers advising on which elements of existing training systems could be done online and SOURCE: Authors’ calculations of NIST-MEP administrative data. Strategies by Workforce-Leading MEPs Our discussions with MEP leaders integration of workforce solutions. Te frst strategy entails close coupling of workforce services with high-demand business services. When businesses point to three concurrent strategies that MEP centers have adopted for better request support for expanding their markets, for example, MEP center 6                       EMPLOYMENT RESEARCH  • JULY 2023 W.E. UPJOHN INSTITUTE which elements required an immersive, in-person experience (and could be postponed until the risk of COVID-19 infection was reduced). Some centers even experimented with augmented and virtual reality training options they co-developed in partnership with local technology frms, pitching these novel applications to make manufacturing more attractive to a younger generation of tech-savvy job seekers. An especially novel solution, called the Talent Exchange and developed by Polaris MEP in Rhode Island, helped connect manufacturing frms with furloughed workers from other factories. Tese workers could showcase their skills and secure short-term employment contracts with frms able to retool their production systems to meet emergency demand. More broadly, MEP centers across the country helped client frms retool production systems and repurpose existing supplier-matching systems to meet heightened demand for personal protective equipment. Refections on MEP’s Workforce Future Not every MEP center is fully committed to workforce development, and some centers have only recently begun to focus on workforce issues. Others, with more experience, have had more time to tinker with their approach, including combining and recombining established tools and practices. Tere are nonetheless still ample opportunities for further experimentation with workforce solutions to move workforce development from the margins into MEP’s service core. First, MEP leaders can push for greater federal fnancial support for MEP centers to engage in workforce development. Tis would add capacity for all centers to ofer additional, noncore services to support workers. It could also address a related fnancial challenge, raised by interviewees, of the heavy reliance by centers on client fees required as a local match to draw federal funding. Tese fees can push companies to favor immediate cost-saving measures or revenue-generating activities rather than investing in workforce solutions with sizable, but delayed, payofs. Second, MEP could deepen its connection to local and regional workforce intermediaries. As we have learned throughout our research, centers with workforce development experience ofen work with community colleges and other local partners to co-create client solutions. Tird, MEP leadership could expand communication throughout the network of centers, passing on best practices and other lessons learned from the innovations of individual centers. Tese lessons could include how to promote racial diversity, equity, and inclusion within U.S. manufacturing and MEP centers. Reference Fieldman, Matt. 2021. “America Works—An Innovative Approach to Workforce Development.” ManufacturingInnovation Blog. National Institute of Standards and Technology, March 9. For additional details, see the full working paper at https://research.upjohn.org/up_workingpapers/371/.Matthew D. Wilson is the associate director ofeconomic and workforce development at the GreatCities Institute, University of Illinois, Chicago. NicholaLowe is a professor of urban and regional planningat the University of Minnesota, Humphrey School ofPublic Afairs. Greg Schrock is an associate professorof urban studies and planning at Portland StateUniversity. Rumana Rabbani is a Ph.D. student inhealth policy and management at the Universityof North Carolina, Chapel Hill. Allison Forbes is vicepresident of research at the Center for RegionalEconomic Competitiveness. Upjohn Institute Researcher Develops New Ratio That Ofers More Detail about Quits and Discharges The Labor Leverage Ratio is a measure of worker versus employer bargaining power developed by Aaron Sojourner, a 7 senior researcher at the Upjohn Institute. The ratio indicates the number of quits initiated by workers per employer-initiated 6 layofs and discharges. 5 While many people look to the quit rate alone to measure 4 worker power, the Labor Leverage Ratio’s pairing of the quit rate with frings and layofs ofers more insight into the broader 3 economy. 2 The Upjohn Institute plans to host Sojourner’s monthly 1 calculations of the Labor Leverage Ratio for diferent sectors and over time, to allow comparisons. See www.upjohn.org for 0 updates. Labor Leverage Ratio = Quits per Discharge Labor Leverage Ratio in Four Key Industries Healthcare & Social Assist. Leisure & Hospitality Accomod. & Food Services Manufacturing 7 

How the Manufacturing Extension Partnership Can Anchor U.S. Workforce Development

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How the Manufacturing Extension Partnership Can Anchor U.S. Workforce Development

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