Manufacturing Faces Potential Labor Shortage Due to Skills Gap

Manufacturing Faces Potential Labor Shortage Due to Skills Gap 500 319 Morris County Economic Development Corporation (MCEDC)

Manufacturing Faces Potential Labor Shortage Due to Skills Gap


About 1.4 million manufacturing jobs were lost during the COVID-19 pandemic but the industry was already facing a potential labor crisis — a projected 2.1 million unfulfilled jobs by 2030 resulting from a lack of skilled labor, according to a study by the Manufacturing Institute (MI).

Now that the pandemic emergency has ended, the industry has more jobs to fill and is actively seeking highly skilled workers. The MI study shows that diversity, equity and inclusion (DEI) initiatives have a growing influence on workforce trends and can help manufacturers fill these empty jobs.

Diversifying the Manufacturing Workforce

U.S. Census Bureau data also show diversity trends playing a larger role in the manufacturing sector. This year’s Manufacturing Week offers an opportunity to focus on the industry’s diverse employment makeup.

The Census Bureau’s Job-to-Job (J2J) Flows Explorer shows us that the number of workers changing jobs to go into manufacturing in each of the race groups (Black or African-American alone, Asian alone, etc.) increased from 2019 to 2022.

diversifying manufacturing workforce

Additionally, according to the Census Bureau’s Quarterly Workforce Indicators (QWI) Explorer Tool, the number of workers in each race category steadily increased from 2014 until 2020, relative to manufacturing employment in 1993. In 2020 there was a brief dip, but the employment growth resumed in 2021 and 2022.

Diversity in Business Ownership of Manufacturing Companies

At the top of the employment hierarchy, business ownership in manufacturing became more diverse, a sign that DEI initiatives may have had an impact.

According to the 2021 Annual Business Survey (ABS), women owned 36,453 of the 240,194 Manufacturing Sector employer firms in the United States.

In addition, 34,452 were co-owned by women and men with each owning equal shares of the company.

There were 23,911 minority-owned employer firms in 2020 and 3,402 were equally owned by minorities and nonminorities. The breakdown by race and ethnicity:

  • 10,988 Hispanic-owned.
  • 1,557 Black or African American-owned.
  • 10,456 Asian-owned.

Manufacturers are increasing efforts to attract larger numbers of women and diverse workers to the industry. For example, NAM’s annual STEP Ahead Awards recognize women’s achievements in the fields of science, technology, engineering and production (STEP).