Written by Joshua Seidemann, Vice President of Policy, NTCA
June 09, 2017
Recent articles and studies indicate that U.S. manufacturing jobs are being affected more by technology than cross-border competition. These data underlie a growing need to consider a new “extraction strategy” for rural America.
To begin, it is useful to consider the three broad categories into which American jobs fall: low, middle, and high skill. According to sources cited by the University of New Hampshire’s Carsey Institute, low-skill jobs generally require a high-school diploma, less than a year of related experience, and less than one month of “on the job” training; high-skill jobs require at least a college degree; and, middle-skill jobs require at least one month to a year of “on the job training” or an apprenticeship, vocational degree, or one-to-five years’ experience in a similar job. “Middle-skill” jobs may include electricians or medical assistants.
According to the Carsey Institute, rural workers are more likely than urban workers to hold middle-skill jobs. And, according to the National Skills Coalition (NSC), 53 percent of U.S. jobs in 2015 were middle-skill. It is expected that demand for middle-skill jobs will remain strong over the next decade. But, the NSC, relying on data from the Bureau of Labor Statistics Occupational Employment Statistics and the U.S. Census Bureau, finds that training for middle-skill jobs lags about ten percent behind demand.
These data justify greater attention to middle-skill job training in rural America. A recent Ball State University study reports U.S. manufacturing production has remained strong, citing 2013 as a “record year for the production of consumer durables” (“consumer durables” are defined as goods used for more than one year). The same report, however, notes that traditional inputs to manufacturing are changing.
Generally, manufacturing requires the combination of labor, capital and raw materials. As technological innovation increases, the ability of firms to create more product at a lower cost can increase. While this may lead to lower-priced products as well as reductions in low-skilled jobs, it may also increase the demand for middle-skill jobs in the manufacturing sector.
A New York Times article quotes a former executive at Siemens U.S.A., who commented on the opening of a gas turbine plant in North Carolina: “In our factories, there’s a computer about every 20 or 30 feet. People on the plant floor need to be much more skilled than they were in the past. There are no jobs for high school graduates at Siemens today.” A John Deere representative offered a similar observation, stating, “The toolbox is now a computer.”
Nearly half of middle-skill jobs, the types needed by Siemens and Deere, pay more than $55,000 a year (compared to an average $50,000 salary for recent four-year college graduates). In 2016, then-Labor Secretary Thomas Perez called apprenticeships, "the other college, except without the debt." Siemens created an apprenticeship program to meet employment needs at its North Carolina plant, offering high-school seniors four years of employment that ends in an associate degree from a local community college, a $50,000 annual salary, and no student loan debt. The NYT quotes a Siemens rep as cautioning, “These are not jobs for underachievers,” and profiles a 3.75 GPA student who turned down a University of North Carolina engineering school for a Siemens opportunity (my summary here of the NYT article does not do it justice; I recommend reading the full article for an excellent perspective on job market trends).
All of this leads to a reconsideration of so-called “rural extraction policies.” In classical conversations, rural extraction refers to mining for gas and coal. But, a committed focus to technical skills and training, whether in the IT space or enabled by the IT space, could provide a foundation for middle-skill jobs, defining rural extraction with an eye toward the intellect of rural students.
