Manufacturing Innovation Under the Radar

The latest unemployment report released by the Bureau of Labor Statistics (BLS) a couple of weeks ago was positive. We added 151,000 jobs. The unemployment rate ticked down under 5.0 percent for the first time in many years. It was a positive report.

There was one conspicuous oddity in that report however - we supposedly added 29,000 manufacturing jobs in January. I thought that was strange when the monthly ISM reports show manufacturing is in decline. The soaring dollar makes our goods hard to sell around the world. So where did those 29,000 new manufacturing jobs come from?

I am aware that the BLS data is based on surveys of 146,000 businesses and government agencies covering 623,000 individual worksites. That is at best a representative sampling that misses a lot. Any number that sticks out like that one could be dismissed as an aberration.

But after reading "How America Is Putting Itself Back Together," an article by James Fallows in the latest issue of The Atlantic, I am beginning to think there is something positive going on under the radar. All around the country in small towns here and there in the most unexpected places a new generation of entrepreneurs is taking the initiative to spark productive investment, and a major chunk of it is in manufacturing.

In San Bernardino, California, site of the terrible mass shooting last year, a couple of enterprising doers and shakers named Mike Gallo and Bill Clarke set up a nonprofit technical school for unskilled locals and intensified training in the public schools where students learn to use and repair the machinery that defines the advanced manufacturing age, such as 3D printers, robots and computer-controlled machine tool systems. Since 2010, more than 400 students have passed through the school and gone directly into manufacturing jobs.

In Duluth, Minnesota, Fallows found a new company called TrueRide that makes ramps, half-pipes and other ingredients for outdoor skateboard parks. The entrepreneurs, Greg and Dave Benson, fretted about all the plastic being discarded after they cut out what they needed to make the ramps. So they formed a kitchenware company, Epicurean, and then a furniture company called Loll, to make chairs, tables, cutting boards, and other items from the discarded material.

Down in northeastern Mississippi, a depressed area dating back generations, Fallows found Golden Triangle Development, the most modern mini-mill for producing steel in North America. They transform vast amounts of scrap metal from recycling shops and auto junkyards, into an endless stream of new sheet metal. Its racially mixed workforce of almost 700 people earning a median wage of more than $80,000.

I cannot sum up the entire article here. Suffice it to say Fallows and his wife spent three years flying around our great country in a small plane and found abundant evidence that manufacturing and innovation are alive and well - and perhaps those 29,000 new manufacturing jobs are real.

Jerry Jasinowski, an economist and author, served as President of the National Association of Manufacturers for 14 years and later The Manufacturing Institute. Jerry is available for speaking engagements. February 2016