Chad Moutray, Chief Economist at the National Association of Manufacturers, discusses how strong demand and supply chain congestion will affect the U.S. labor market.

Video Transcript

ADAM SHAPIRO: When we talk about the supply chain issues facing the country, facing the world, actually, we also talk about the labor problems. And to help us continue this discussion, we invite back into the stream Chad Moutray. He is the National Association of Manufacturers chief economist, and we appreciate your being here.

We were just talking with Mike Pyle, the chief economic advisor to Vice President Kamala Harris. And we asked him, it's one thing to say we're going to work 24/7, it's another thing to get the people in place to work 24 hours. I mean, they're not going to work 24 hours, but the three shifts that would be 24 hours. There's a labor shortage. From your viewpoint, are we closing the gap on that labor shortage? Because I know manufacturers have been sounding this alarm for over a year.

CHAD MOUTRAY: Well, you know, we have 870,000 job openings in manufacturing, just off of an all-time high. You're seeing all-time highs across the board. And manufacturers continue to tell me that one of the biggest downside risks to their forecast as you move into the next year is, will they have enough workers to be able to meet the capacity? And we're seeing really strong demand, right? Demand has been pretty strong, really, over the last year.

But being able to meet that demand is a challenge, given those worker shortages. We also, as you know, Adam, we also have an all-time high level of quits in the system, right? And so there's a lot of competition for labor out there in-- well, it's a number of sectors. And that means a number of challenges in terms of finding the right workers, retaining those workers, and obviously some wage pressures that are out there.

SEANA SMITH: So, Chad, with that in mind, talk to us just about what manufacturers are doing in order to get the workers, in order to attract what they need to meet that demand because it sounds like it's going to be an issue that we will be dealing with now for several months.

CHAD MOUTRAY: Well, as you know, we're doing a creators wanted campaign right now, where we're really trying to convince folks to go into manufacturing. It's a great career, high paying career. And we need to change perceptions about what manufacturing is and what it isn't. A number of school kids are coming around and going to the trucks that we have going around the country, touring and seeing just how cool manufacturing is.

And so I think that's the first thing that we need to do, is to just show folks just how advanced manufacturing is, how much we actually compete with a lot of other sectors that they might not recognize, and just getting those people in the door. As I talk to manufacturers about how they're addressing those skills gaps, yes, they're working their existing workforce more, but we've got to attract more folks and get them in the door to be able to really meet that demand that we're seeing.

ADAM SHAPIRO: That's a long-term, though, project. In fact, I remember we had your colleague on, and we were in one of those trucks. It's amazing, and these are high paying jobs. But in this world we're in now, I think the Wall Street Journal called it the great resignation. I mean, high wages don't seem to do the trick. How do you get people into place to-- I don't know if the 72 days, the supply shortage issue is going to be solved. But a year or two years out, because again, your organization was warning about this more than a year ago.

CHAD MOUTRAY: Well, I've been at the NAM 10 years. We've been talking about it most of that time. This is definitely a structural issue that we've had to address, right? We've got to get more young folks to think about manufacturing in a different way. And as the sector continues to evolve and get more technologically advanced, skilling and retraining are also very important components to that conversation.

Regarding the next 72 days, I think it's important. Certainly what the Biden administration did yesterday in terms of 24/7 at the ports, that's going to be helpful, right, as we try to really address the skills that-- excuse me, the cargo issue and the freight issue that so many manufacturers are facing.

The other one is one that you mentioned earlier as well, Adam, and that is we've got to pass the infrastructure package, right? These are key things that we need to do to address those shortcomings that we've really been under-investing in infrastructure for so long. This is a way that we can finally, hopefully, fix this issue for more of a long-term solution.

SEANA SMITH: And Chad, when you talk with the manufacturers, do they expect this issue to get worse before it gets better? What does their more immediate outlook look like?

CHAD MOUTRAY: Well, I think people have to recognize that this issue is not one that we got into yesterday, right? And it's not going to take something that's going to be solved tomorrow, right? This is going to be an issue that we're going to be dealing with as you move into next year. It's going to be a while for us to address this chip shortage, for instance, right? And so I think manufacturers are mostly recognizing that this is going to be something that, hopefully, by mid-2022, we will have moved on from.

Hopefully, things will stabilize by then, and some of these bottlenecks will be addressed. Hopefully we'll have in the short-term some solutions on the ports, as we move into the holiday season. But I think there's a recognition that this is not something that's going to end at the holidays. This is going to be something that moves into the first and second quarters of next year. And hopefully, as we get to the second half of 2022, we can be back to that new normal that we are all kind of striving for.

ADAM SHAPIRO: I had asked the previous guest, Mr. Pyle, if there was a way to prioritize the shipping of things like semiconductors. I'm sure those cargo ships, those containers, have everything from My Pretty Pony to semiconductors-- I don't know. But would there be a way to do that so that manufacturing doesn't suffer the same kind of slowdown? I don't want to be the Grinch who stole Christmas here, but it would seem to me manufacturing might take priority over toys.

CHAD MOUTRAY: Well, I think one thing that you have to hand to manufacturers is they've been very smart about keeping the lines open, right? When you talk to a lot-- and this is earnings season. You're going to be hearing a lot about supply chains over the next few weeks. Almost every one of them is going to talk about all of the smart things-- a lot of work that has gone into, really, keeping the shop floor lines open and running.

And that's required a lot of, you know, 24/7 manipulation to make sure that they can have those parts when they need them and to have the workers there that they need to be able to meet that demand. So I think similar to your last guest, I think the private sector needs to solve these solutions. And they're working very smartly to be able to address them as much as they can.

ADAM SHAPIRO: Chad Moutray is the National Association of Manufacturers chief economist. Thank you for being here. We always appreciate the updates from NAM.