Skills and the Workplace: The Lesson of Inland Steel

Workplace skills then and now: The Lesson of Inland Steel

Workplace Skills Then and Now: The Lesson of Inland Steel

by Gary Kaplan

“Sorry, son, we can’t hire you. You’re overqualified.”

Thus ended my career as a steelworker. The place was Inland Steel in East Chicago, Indiana. The time was the 1970s. I was looking for an interim job while I plotted my next career move. I thought that working in a steel mill would be educational, in addition to bringing in some serious, and seriously needed, cash.

I had grown up in the Calumet Region of Northwest Indiana, one of the world’s largest concentrations of heavy industry. Steel mills and oil refineries were the landscape of my childhood. Many of my high school classmates had gone directly to work at Inland, Youngstown, US Steel or Standard Oil and were well on their way to owning a house, a car, a cabin in Michigan, a boat, and eventually a union pension. Though I had been around the mills my whole life, I had never been inside them. I thought it was time I found out how America’s industrial might was created.

But Inland wasn’t interested in my research project. They were looking for long-term mill rats, not transient culture tourists. My grizzled middle-aged interviewer said that college graduates only stayed six months to a year—exactly my plan. Since it took three months for a new hire to become productive, it didn’t make sense for the company. “Sorry, kid. Good luck.”

The mills didn’t require a high school diploma.

Employment—union employment– in the Calumet Region steel industry at that time was over 60,000. The US led the world in steel production—without college graduates. The mills didn’t even require a high school diploma. Many of the workers from countries all over the world barely spoke English. The work was hard, physical, dirty and dangerous. It required strength and endurance. It also required skill, but the skills were manual and mechanical. They were learned on the line, not in a classroom.

All that has changed. Technology has transformed the shop floor from a manual to a digital workplace. Throughout the vast variety of industries that comprise the manufacturing sector, skill requirements have escalated. Back in the last century, education beyond high school was unnecessary, even a disqualification. As late as 2000, 53% of manufacturing workers still had no education past high school. But by 2015, the percent of workers with only high school had shrunk to 42%. College-educated workers now outnumber the non-degreed by steadily rising rates. And the degrees and certificates are highly specialized: electro-mechanical technologies, programmable logic control, automated process control, engineering technology, hydraulics and pneumatics, manufacturing engineering, and on and on. None of these specialties existed a generation ago.

Companies cannot find workers with the skills they need.

Manufacturing companies across the spectrum cannot find production workers with the skills they need. The number of open manufacturing jobs is the highest since 2000. Because of technology-driven productivity increases, American manufacturers produce twice as much with half the workers, but those workers must have the skills to operate the advanced machinery that has transformed the greasy shop floor into a gleaming high tech laboratory.

The twin forces of globalization and technology will continue to drive up the skill level required for employment in American industry. Globalization means that production can be sited wherever in the world business conditions are best. High on the list of those conditions is the labor force. Technology means that more and more jobs will be performed by a computer or robot. Some studies predict that 80% of low-skilled jobs in the US will be robotized in the foreseeable future.

The trend toward higher skills has been clear for decades. But our response has been muddled and ineffective. The proportion of American 25 to 29 year-olds who have bachelors’ degrees or higher has risen only 11% (to a meager 35.6%) since 1995. This age group is a leading indicator of the quality of the labor force because they’ll be in it for a long time. Upgrading their skills later in life will be much more difficult than at the beginning of their careers. Our competitors in the global marketplace have outstripped us in the percentage of these young workers with degrees. We now rank 19th out of 28 countries tracked by OECD on this crucial metric. Twenty years ago, we were number one.

Labor Day was started by the labor movement in the 1880s and became a federal holiday in 1894. It celebrates the contributions of working men and women to our society and the struggles of the labor movement. The benchmarks of labor progress have traditionally been wages and working conditions.

As Labor Day 2016 recedes, we would do well to add another benchmark to our goals for working men and women: post-secondary education or training.

There are proposals on the table such as early college courses in high school to accelerate degree-earning and free tuition at two- or four-year colleges to broaden access. These strategies could help raise the skill levels of our workforce. But they will work only if we raise the skill levels of our high school students.

This is the critical gap in our workforce development pipeline.

More than half of our high school graduates have to take remedial courses in college because their reading and math skills are too low. Less than one-quarter of these remedial students finish a degree. This gap in college readiness has been holding back the growth of a skilled workforce for decades. It was not a problem when a college degree was irrelevant. It’s a big problem now. This is the critical gap in our workforce development pipeline. It must be closed.

The rubric “College and Career Readiness” put forth by President Obama in 2009 captured the primary fact that college and career are not different paths: they are the same path. Our task this Labor Day remains to place more feet on that path by raising the skills of our high school students so they all can pursue education and training beyond high school and gain the skills to participate fully in the competitive global economy.

If I were applying to Inland (now ArcelorMittal) today, the young woman interviewer would look at my liberal arts resume, shake her head sadly and say, “Sorry, sir, we can’t hire you. You don’t have the technical background or skills we need. I’m afraid you’re underqualified.”

Gary Kaplan is the executive director of JFYNetWorks.

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