“Now Hiring.” It’s hard to go to most places in the country these days without seeing signs like that in front of several businesses. From the fast-food joints to gas stations to foundries, signs practically begging people to come and work dot the landscape. Almost as common are signs proclaiming limited hours and others begging customers to be patient as very few people are willing to work.
Someone might be tempted to think this is a good thing. Normally, businesses desperate to hire people are a sign of a booming economy. In this case, most people understand that isn’t the case. We are dealing with not so much a healthy economy but the effects of the government’s response to Covid. Back in the beginning, the government shut down a vast number of businesses, believing it necessary to limit activity and social interaction to slow the spread. As part of that, unemployment benefits were increased to offset the loss of income. While those benefits being instituted made sense at the time, the fact that they have been extended well past when nearly every business in every part of the country has reopened has helped create the labor shortage.
Skilled Employment
To be fair, attracting and keeping skilled employees is not a new problem in the foundry industry. Iron foundries have struggled to balance employee incentives, government regulation, and being profitable enough to operate for decades. It’s hard work that doesn’t often get the recognition it deserves. Yet, it can’t be denied that the extension of those enhanced unemployment benefits is actually making the job of finding new employees more difficult than it has ever been.
Compensation
“If you can’t pay people more than they get on unemployment, then you shouldn’t be in business” is a common refrain in response to complaints about not being able to find employees. Such responses ignore two things. One is the narrow profit margins that most businesses, including iron foundries, operate. This is a consequence of international competition. Foundries in the United States have to compete with those in other countries who don’t have the labor laws and environmental regulations present here. That allows them to produce products at a much lower cost. Often, those products are of lower quality as well. Still, the businesses buying the product have their own profit margins to consider. The second issue that gets ignored is that the enhancement to the benefits is to the tune of an additional $300 a week, bringing the take-home from the average unemployment check to $900 every single week. That’s not bad money for not having to do anything. Factor in money saved on gas, work clothes and eating on the go, and it’s little wonder many are choosing to stay home rather than re-enter the workforce.
It isn’t as if foundries aren’t trying to adapt either. Many have offered signing bonuses, increased pay, and other benefits such as tuition reimbursement, all to little avail.
What will happen if this trend continues? No doubt, many will have to cut product lines, halt plans of expansion, and others will close entirely. That will result in fewer places to work when things do recover as well as greater reliance on foreign products, meaning more money goes overseas instead of building the economy at home. The result will be a weakened American economy, weakened at the very base of manufacturing. The ripple effects will continue for years.
Taking Action
This is why the foundry industry is lobbying government officials to end the enhanced and extended unemployment benefits. The American Foundry Society and the Foundry Association of Michigan, in particular, have been urging Michigan’s Gov. Whitmer to end those benefits and encourage Michigan workers to get back into the workforce. Doing so won’t magically solve all the employment problems of the foundry industry. It will remove a significant and recently added obstacle, allowing us to get back to ground zero. Perhaps then, we can apply the lessons learned from this odd period in history to address our long-standing issues better and solve our employment problems for the long term.
If you’re looking for talent we can help. Foundrylink offers several job posting options to help fill every need. Contact us today to learn more about how we can help.
