May 22, 2018 New Jersey-Based Manufacturers Reveal Top Issues

Minimum wages, taxes, competition, and education threaten the Garden State’s manufacturing community.

May 17, 2018

By John W. Kennedy, Ph.D., CEO, NJMEP

Manufacturing contributes $46 billion to New Jersey’s economy. Yet manufacturing is the state’s best-kept secret. In fact, most people probably don’t even consider construction and food industries to be a part of the manufacturing community. But it’s true. Manufacturing is represented in all 40 districts of New Jersey, and it’s the only industry that supports at least four other jobs.

So why isn’t the public aware of the struggles that face New Jersey manufacturers? And how come manufacturing isn’t a top-of-mind career choice for New Jersey’s millennials?

Because the manufacturing industry needs to do more.

“If we don’t tell them, they won’t know.”

In order to evoke change, New Jersey-based manufacturers must form a united voice to raise awareness of top issues and rally support for solutions. The manufacturing/STEM industry finds its best support within its own community. Therefore, the government, educational systems and other local groups need manufacturers to initiate dialogue.

Hot Topics Facing The Manufacturing Industry

A group of the Garden State’s manufacturers, legislatures and STEM firm executives recently gathered to discuss burning issues facing New Jersey’s manufacturing industry. Concerns were raised on the following issues:

• Minimum wage
• Taxes
• Competition
• Education

The Cost of Raising Minimum Wage

A potential raise in New Jersey’s minimum wage would impact every manufacturer from large to small. The concern is not simply paying more for entry-level positions, because many manufacturers are already paying their entry-level workers the proposed minimum wage. The issue is that a pay increase for entry-level workers will mean a pay increase across the board. The required increase could cripple a company.

Companies are also concerned that if the minimum wage is universally raised, workers might not aspire to expand their skill set. Manufacturing must present itself as an industry with an attractive starting wage and opportunity for a career with longevity.

The Toll of Taxes

Another major issue of concern is New Jersey’s famously high taxes and lack of tax credits. These manufacturers struggle with meeting regulatory guidelines that, while in place for the safety and security of the state’s residents, can cost thousands of dollars. New Jersey has taxes that other states don’t impose on businesses, such as litter tax. These pressures are forcing many New Jersey manufacturers to consider relocating to a different state—which robs the state of valuable profits and leaves residents unemployed.

Conquering Competition

In New Jersey, manufacturers are competitive with other companies well beyond its borders. It can be difficult for these manufacturers to find value in keeping their business in-state when other states require much less of them. Manufacturers are even sometimes asked to relocate their business. With hundreds of jobs tied to the manufacturing industry outside of the facilities, this would create an impact beyond inner-factory work.

Changing the Stigma

Parents hold a false mentality that manufacturing workplaces are dangerous, dark, and reserved for the lower-educated. This is one of the reasons why New Jersey is the number one out-migrater of 19-34-year-olds, according to New Jersey Business Industry Association (NJBIA). In reality, manufacturing can be a fulfilling and prosperous career path that doesn’t require employees to first unbury themselves from student debt. The manufacturing industry offers a plethora of career opportunities for those with and without a collegiate degree. Candidates simply need math and mechanical skills—and support from their parents.

Generation Y is expected to make up 75 percent of the workforce by 2025, as reported by Forbes. Incentives must be devised to attract millennials to manufacturing careers in New Jersey.

Developing the Workforce

The lack of skilled workers in the industry makes workforce development a serious issue. Additionally, those that do have expertise in manufacturing fields are retiring and that often means taking all their knowledge with them. First-hand experience can’t be passed down through a textbook; mentoring is key to the success of future manufacturing generations.

Proper education is also needed. Many manufacturers find that educational courses are not geared towards on-the-job tasks. For example, when students learn the program Excel, they are not taught how to use it in a way that applies to manufacturers.

Moving Forward

In order to see change, New Jersey’s manufacturers must continue to unite with legislators, educators and the public. Managing state Talent Networks is one solution that will connect manufacturers, bring parents and students together, and help close the skills gap. Creating career pathways and apprenticeship programs will also help solve industry challenges and create a manufacturing revolution. It all starts with awareness and support.

About the Author
John W. Kennedy, Ph.D. is CEO of New Jersey Manufacturing Extension Program (NJMEP). He previously served as the organization’s COO and has more than two decades of experience in the manufacturing and engineering arenas. Contact: (973) 998-9801

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