A closer look at Minnesota's manufacturing sector
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Minnesota has lost more than 40,000 manufacturing jobs due to the recession. But it might see a healthier recovery of manufacturing jobs than the rest of the nation.
Manufacturing has been a major growth sector in Minnesota's economy, and the jobs pay 18 percent more than the average wage, according to state data.
The factory sector has been leading the nation's economy out of recession, but experts do not expect it to return to its old glory.
The Bureau of Labor Statistics projects that the nation's factories will dump 1.2 million jobs between 2008-2018.
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For Minnesota, the picture is less gloomy, but hardly bright, according to state economist Tom Stinson.
Stinson said in the next two or three years, Minnesota recover about 20,000 of the jobs lost because of the recession. Farther out, Stinson said, additional gains are possible. But he admits to considerable uncertainty.
"In my most optimistic moments I think we might get back all the manufacturing we have lost since late 2007, but no more. And it will be 2016 or beyond, which stretches the limits of my crystal ball," Stinson said. "In my more realistic moments I think we will eventually get most of our manufacturing back, but that manufacturing employment in Minnesota will never fully recover to the levels we saw in late 2007."
Stinson notes that factory jobs in Minnesota kept growing long after they took a nosedive on the national front.
Since 2001, Minnesota's factory jobs have dropped off considerably, but Stinson said those losses are not catastrophic to the state. Minnesota's economy is diverse enough to take the blows.
"We're not Michigan and Detroit with the auto industry," he said.
Many of the job losses in manufacturing mirror trends in the overall economy, according to state labor market analyst Steve Hine. Globalization has sent many low-skilled, highly repetitive jobs to countries where the work is done more cheaply.
"A reliance on more productive and higher-skilled-- but fewer-- workers has been the trend in manufacturing, as it has been in the economy as a whole," said Hine.
Growing use of industrial robots and other methods of automation have also eroded factory employment.
That's the direction the workforce is heading at United Machine & Foundry in Winona. Tom Renk, the president, said the company plans to use robots for an increasing amount of its work.
It's partly because Renk's workforce is aging, like those of other manufacturers. Renk said he has a hard time finding young workers endowed with the same, strong work ethic as his older employees. Inmates being released from a local jail have been a source of workers in recent years.
"That indicates to me that we are essentially a bottom feeder for the labor pool. And we want to change that. We have to change that," Renk said.
Renk said he'll likely shrink his workforce and increase its skill level. That will mean salaries go up, too.
But on the whole, state economist Tom Stinson does not expect manufacturing's wage premium over other industries to endure because of competition from cheap labor overseas.
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