Reshoring manufacturing will take a more skilled workforce, small manufacturers say

By Morgan Sweeney
The Center Square

The federal government should help American businesses access highly skilled workers, continue to cut burdensome regulations and perhaps alter some of its tariff policies to expedite reshoring of American manufacturing, several small business leaders told lawmakers Thursday.

One of President Donald Trump’s main goals with his tariff policies has been to bring back manufacturing, boosting American jobs and improving national security by reducing U.S. dependence on other countries for manufactured goods. With small businesses employing nearly half of American workers, the House Small Business Committee invited several small business leaders to Capitol Hill to learn which government policies are helping or hurting their role in that intended resurgence.

Those small business leaders disagreed on some points about tariffs, but several raised concerns about finding employees who already have the requisite knowledge and training to step into a manufacturing job.

Managing Vice President of Policy at the National Association of Manufacturers Charles Crain said that there are roughly 400,000 jobs across the industry that need filling.

“Our 30-year veterans are retiring, and we do not have that up-and-coming skilled workforce to take their place,” said Shirley Modlin, owner of 3D Design and Manufacturing in Virginia.

Smaller manufacturers need skilled labor as much, if not more, than larger corporations, but it’s difficult to compete with the richer benefits and higher salaries they can often offer. Modlin said training an employee can take up to three months, so it’s helpful to 3D Design when it can hire workers who are already trained.

“They have to hit the floor and be able to work, and there is a tremendous shortage of these workers in manufacturing,” Modlin said. “Small manufacturers have to rely on a skilled workforce.”

Crain suggested that domestically, the government should support programs starting as early as middle school to educate students on the trades and manufacturing skills. Otherwise, it should strengthen immigration policies that allow American companies to readily hire skilled workers from overseas.

Harry Moser, founder and president of the Reshoring Initiative, also testified before the committee. He said the Department of Labor still overemphasizes a traditional career path starting with a four-year college degree, and it should encourage technical training more.

Reshoring Initiative also surveyed a number of companies this year about government policies that could make reshoring easier for them and their biggest concern of the options listed was an able workforce.

“They gave nice responses for lower taxes, less regulations, lower dollar, things like that, [but] they gave the highest priority to a skilled workforce – significantly higher than any of the other things that politicians typically talk about,” Moser said. “And because they understand that if we’re going to increase significantly in manufacturing, you need more people to do it, and you need better trained people.”

Countries like Germany, Switzerland, Austria and China have better apprentice programs and training overall than the U.S. does, Moser said.

Crain emphasized the importance of a “comprehensive manufacturing strategy” that addresses workforce shortage issues as well as tax, energy, infrastructure and regulatory reform.

He believes the extension of the 2017 tax cuts enshrined in the One Big Beautiful budget bill Congress passed over the summer was beneficial for small manufacturers, but permitting and regulatory reform would also go a long way in helping them succeed.

Permitting in the U.S. is often more rigorous than in many other countries, contributing to longer project timelines and delays.

“We cannot become the best place in the world to build things if it takes us 80% longer to permit projects here in the US, as compared to other advanced economies. Unclear timelines, overlapping statutes, excessive litigation – these all raise costs for manufacturers, or they halt manufacturing projects entirely.

The president has issued multiple executive orders aimed at accelerating the permitting process.

Complying with excessive or complex federal regulations can also cost small manufacturers a lot each year.

“Small manufacturers bear the brunt of the federal regulatory burden that our industry faces,” Crain said. “As an industry writ large, we face about $350 billion every year, and federal regulatory cost for small manufacturers is about $50,000 per employee per year.”

Modlin said that this year’s tariffs have made running her business difficult. She said that larger companies often rely on 3D Design and Manufacturing for fast solutions to technical problems, but it’s difficult to operate quickly when there is so much flux in the price of goods and those fluctuations are largely unpredictable.

“3D Design and Manufacturing has been in business since 2005 and we have never experienced such turmoil,” Modlin said. “Our products are made in America, but we rely on aluminum, steel and alloys, which are imported from Canada and Mexico.”

The administration has imposed high tariffs on aluminum and steel and has raised tariffs on many Canadian and Mexican products.

Modlin has been unable to wholly avoid passing some costs on to customers.

Though tariffs have caused some problems for AmeriLux International, whose CEO Kurt Voss was called as a witness in Thursday’s hearing, Voss wasn’t entirely critical.

“We’ve had customers who have their businesses have expanded as a result of the foreign competition being tariffed. Our prices actually have not gone up for the things that we bring in from overseas, because the manufacturers overseas have largely ate those increases or the cost of the tariff,” Voss said.

As a remedy, Modlin suggested that all small businesses be exempt from tariffs.