When the Trump administration announced its tariff regime earlier this year, it claimed its goal was to make manufacturers reshore their operations from distant markets like China, India, and Brazil. In part, it appears Trump is using tariffs to make good on his campaign promises to protect and increase high-paying blue-collar jobs in the U.S. But is it possible to revive U.S. manufacturing so quickly, given the state of labor in the country? The sector’s significant tech skills gap suggests that it is not.
Manufacturing is a game of effectively managing inputs—raw materials, energy, real estate, labor, and more—to maximize outputs in the form of manufactured goods. Much of today’s conversation focuses on raw materials and the geopolitical wisdom of reshaping supply chains, but overlooks the critical component of labor.
Labor is the primary reason manufacturers left the U.S., and it’s also a big barrier to their return.
Since the 1980s, U.S. companies have outsourced manufacturing to developing nations in search of cheaper labor. This trend accelerated after the North American Free Trade Agreement in the ’90s, and has significantly contributed to the decline of high-paying blue-collar jobs.
While outsourcing has created vulnerabilities in U.S. supply chains, the job decline has taken on great political weight. Tariffs may, in theory, help restore jobs if manufacturers reshore operations. In reality, however, no amount of market interventions or trade deals can prepare the American workforce for the demands of 21st-century manufacturing. The jobs shipped overseas will not be the same as those we hope to bring back.
U.S. factories of the future will have to be much smarter if manufacturers hope to produce goods at prices palatable to American consumers and businesses. Domestic factories are already embracing automation and digitization. Caterpillar has invested significantly in smart sensors for real-time machine monitoring, Ford simulates assembly lines to detect bottlenecks before implementing real-world updates, and GE used autonomous mobile robots to increase throughput in its medical equipment repair center. These are just a few examples, and newcomers will have to double their efforts to offset a sharp rise in labor costs. That will require more tech-savvy technicians at a time when domestic manufacturers already face a labor shortage.
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A 2024 Deloitte study found that by 2033, the manufacturing sector may need 3.8 million new workers, and 1.9 million of those jobs could go unfilled due to the labor gap. As in other industries, a tech skills gap is creating shortages in roles that require technical expertise. The same research revealed that the skills with the fastest-growing demand—simulation and simulation software, enterprise information management, and cloud computing—are all tech-related.
All signs indicate the demand for tech skills will only grow. While all organizations are digitizing and facing talent shortages, U.S. manufacturers will also have to compete in a global marketplace where China and other nations can still employ low-paid manual labor. Transferring the manufacturing models used in emerging economies to the U.S. simply isn’t feasible.
So, if we truly want to reimagine manufacturing and produce more goods sporting the “Made in America” tag, where will we find the talent?
While some roles—such as in high-tech areas like semiconductor manufacturing—require master’s or Ph.D. degrees, we cannot afford to wait 8-12 years to mint enough graduates. To truly support a resurgence of U.S. manufacturing, we must reskill and upskill qualified candidates while also encouraging greater participation in the STEM higher education track. Manufacturing employers carry much of the responsibility on this front.
STEM degree holders don’t always find employment in their degree fields. In 2019, the U.S. Census Bureau found that only about 28 percent of STEM degree holders have STEM jobs, leaving roughly 13.3 million STEM graduates not using their degrees. The reasons vary, but often it’s due to a lack of suitable employment. The cohort of STEM graduates not currently working in STEM offers a strong starting point for reskilling and developing talent that can step into high-demand roles far faster than it takes to get a new degree.
At the same time, numerous other professionals can upskill to handle roles that don’t require terminal degrees. Modern technician roles are vital to keeping factory operations running, especially in the age of big data and the internet of things. These technicians don’t need STEM degrees but must have baseline knowledge of data analytics and working alongside AI, on top of soft skills like critical thinking, cross-functional problem solving, and leadership. The latter skills can be found outside of STEM professions.
Sometimes the best strategy for finding tech talent is to get someone with 70 percent of the needed skills and teach them the other 30 percent. This talent can be sourced internally or externally. This approach is particularly useful in manufacturing, where it’s hard to compete for talent in the first place.
Manufacturing roles carry the perception of requiring demanding physical labor, and many newly credentialed STEM master’s and Ph.D. graduates prefer fields marketed as having more “exciting” projects, like developing AGI or curing diseases. In an already tight labor market, manufacturing faces a uniquely difficult challenge, as the low number of applicants suggests.
Political parties and policy preferences matter little in the face of a massive skills deficit. If our goal is to reshore manufacturing, we need a vastly more technically proficient workforce. Tariffs without talent cannot make for a manufacturing boom in the U.S.
Erin Gadjalo is CEO of Pluralsight.
The views expressed in this article are the writer’s own.