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Mike Ralston and Mike Tramontina Discuss Iowa Workforce Issues

posted on November 15, 2007 at 9:15 AM

Michael Ralston is president of the Association of Iowa Business and Industry. And he's with us tonight. And also joining us is Michael Tramontina, who is director of the Iowa Department of Economic Development. Both of these gentlemen have heard a lot of the concerns and complaints from not only employers about workforce needs in Iowa, but also about the issues the government is facing in putting all this together.

Mundt: I wonder if we could start -- I don't want to spend a lot of time working on the background here, but I want to get a little bit of a bigger picture on some of this. Michael Tramontina, what has been the general trend over a long, let's say, maybe the last ten years in manufacturing in Iowa? We talked about a recent increase of more than 11,000 jobs, but can you put that in perspective?

Tramontina: Well, as America has been on a trend line of losing its manufacturing base employment in many states in the Midwest, Iowa has actually reversed that trend and has been adding jobs. And we're very fortunate in that. A lot of that I think has to do with the ability of our Iowa companies to innovative and to make the transition to very modern and what we call advanced manufacturing processes and techniques and to use lean process techniques that enable them to compete better with foreign countries.

Mundt: What is advanced manufacturing?

Tramontina: Advanced manufacturing is a term which is applied to -- I think the simplest way to describe it -- and I've tried to find -- I'm not aware that there's really a succinct definition of this, but the way I've seen it described in various reports is that -- when we were younger and the idea of growing up and working down at the plant or working down at the factory where Dad worked or Grandpa worked or something like that was not something that our parents really encouraged. They wanted us to go to college and go do something else, a good, clean, healthy career.

Mundt: The tradeoff was between a good education and a manufacturing job.

Tramontina: Now, if you go into over half the manufacturers in the state of Iowa, you are going to find such advanced technology. Let me give you this example. They're just about to break ground on a new ethanol plant down in Eddyville at that Cargill, that big Ajinomoto facility down there. A $230-million piece of equipment at this ethanol plant, and it's going to be attached to another part of a building.

And I was down there touring this, and they showed us where the operator of this was going to be, because actually -- they were showing us the operator of this other plant right on one side of it, and there were, like, four screens there, terminals right there. And they said, yeah, and this is where the operator for the ethanol plant which is going to be right out here is going to be. They're going to add one more screen.

And so this $230-million piece of machinery that's going to run on the weekends and run in the evenings, it's going to have one operator standing there looking at screens, looking at panels having a variety of keyboards that is going to run this ethanol plant on the weekends and evenings.

It takes about 35 people to run it totally to clean it and run it all the time. This is advanced biotechnology. This one person is going to be able to do this. It's all run by equipment.

You can go into lots of manufacturing processes in Iowa today, and it is so automated, it will really surprise people. Also, you can see manufacturers use what we call lean processes to take all the waste out of their processes. It's highly empowering for employees and really has enabled the American companies to use smarter workers to compete with lower cost workers overseas. These kind of techniques are really advanced manufacturing techniques.

Mundt: And, Mike Ralston, is that why, because in spite of the pressure to -- you know, that lowers wages because of increased competition and globalization that we're able to see instances where some of these, you know, young kids who are getting out of school are getting $17- and $20-an-hour jobs?

Ralston: Todd, that's exactly right. Mike outlined several companies and practices in Iowa that are illustrative of those kinds of jobs. They're highly technical. The skill sets are pretty advanced, needs to have advanced degrees in many cases, and that's exactly why they are commanding higher wages, which is good for everybody.

Mundt: So why are we going to -- you know, why are we looking at, in three years, a 150,000 worker shortage in Iowa?

Ralston: Because Iowa is a manufacturing mecca. Iowa is a financial services Mecca. We have a lot of employers here. They have a lot of jobs. That's the good news.

The other good news, though, Todd, is that there is a lot happening. State policymakers are raising the profile of this issue. Governor Culver has called for a workforce summit next month. The General Assembly created an interim legislative committee chaired by Senator Bill Dotzler of Waterloo. They're doing great work. Iowa employers are working hard to work with those folks. Mike's team at the Department of Economic Development and his counterpart at Iowa Workforce Development, Elizabeth Buck, are putting together a program.

So I would say Iowa is ahead of the curve a little bit in addressing some of this. Now we need to see it through the end and realize some results.

Mundt: In some ways it is a good situation for us to be in; however, we do have to start solving that problem.

Tramontina: Could I take a little different answer to the question?

Mundt: Sure thing.

Tramontina: What -- why are we having this problem? I don't know about in your office, but in every office that I've ever worked in, if something goes wrong with the technology, you have to turn to the youngest person in the office to fix it, even if it's only the intern.

Mundt: Oh, that is so true.

Tramontina: When Iowa continues to have a brain drain and we continue to lose our young, educated people, the way we have for decades, that's part of what we're really giving up is this -- we're talking about biotechnology. We're talking about advanced manufacturing.

We're talking about highly technical positions, and these are really younger people who are inclined to do this. And when we continue to lose young, we're going to have shortages in those highly technical fields, information technology, advanced manufacturing, biosciences.

Mundt: Is it the same old reasons that have been around all the time like when I was growing up that would draw me away from Iowa? Are there new reasons why young people are leaving Iowa to go elsewhere?

Tramontina: No, I would guess that it's the same old thing.

Mundt: Still just the lure of the big city --

Tramontina: Through our whole lives, I think that's probably true.

Mundt: I'll start with you, Mike Ralston, and have you answer this too. How do we try to reverse that trend? How do you address that layer of it, the allure of going somewhere else when you've grown up in Iowa?

Ralston: There are a couple things we can do, Todd, the biggest thing we can do is present young people with a quality of life opportunity in Iowa. You focused on a great program in northwest Iowa at Iowa Lakes Community College. They're doing great work. Almost every community college in Iowa has a program that focuses on workforce in some respect.

In most every community, those community colleges are working with local employers, local organizations to get things done. The real goal there is to provide not only a job but a quality of life to go along with that job. More than anything, that's making a difference. Now it's small. Hopefully it will get larger over time.

Mundt: Your thoughts, Mike Tramontina.

Tramontina: Well, two things. One, we have to -- we have to what they call upscale and train, do better training, appropriate training for the workforce that is here. As Mike described, community colleges and our colleges and universities across the state I think are doing a good job at that. That will help on the one hand.

The governor, I've heard speak very eloquently about the need to really attack the problem of dropouts. We have young people dropping out of school which our -- our workforce -- we need them too badly in the workforce to let that happen. We've got gaps in -- with minorities in high school. We need to close those gaps. We need every single worker that we've got growing up in Iowa today. So that is one thing we clearly have to do.

But secondly, really, I want to underscore what Mike said about we have to focus on our quality of life. And to just put a little spin on that, Iowa really is great place to live and to work and to raise a family, but it's really not that great of a place to be single.

We have a lot of big employers right now who are out really recruiting people to Iowa and to information technology and to research jobs. I don't know how many hundreds of research jobs we have going begging in the state at, say, a pioneer, a Monsanto, a Rockwell, and Emerson up in Marshalltown. These are all research facilities and they have to recruit midcareer professionals to move to Iowa.

And for them to do that, the state has to provide the kind of place that when you bring somebody to town, it really makes a good impression on them. Some of our communities could use a good coat of paint. The schools that we're so proud of -- when we go and show somebody we're trying to recruit to town and take the wife and the kids and show them the schools, we're very proud of our schools. But, frankly, the school is eighty years old and they're moving from a suburb of Minneapolis or Austin or Boston. And everything looks new there.

Some of our communities could use sprucing up, but we really have to pay attention to that. We've got recreation and tourism in the state that we could do way more with. We have assets that we could develop and invest a little more in.

Mundt: And certainly there's a level of -- I think it's only natural for us to turn to the state and want some kind of investment there, but it seems to me that there's also an aspect of private business and the rest making some additional investments, civic investments in communities, as well as individuals trying to make their communities better.

Ralston: Very much so, Todd. And I think you'll see Iowa employers across the state are doing just that. When perhaps they've been making some investment in the past, they're stepping that up. They're being more involved in their communities, allowing their employees to be more involved, really urging that to happen. Employers are also stepping up and acting a little quicker.

I think we all have heard the anecdotes about folks who want to come back to Iowa, send their resume out, and they don't get called. That's happened too often. Employers in the state are understanding they have to make sure their recruitment policies and practices are in top-notch form and that they act swiftly and quickly.

The good news about this problem is it's forced all these things to happen. Again, we have a lot of work to do, but the work has begun.

Mundt: Just taking a step back again, a lot of our state's economy depends on manufacturing, around a fifth, I believe. It's very important to the state. Is it wise for us to be that dependent on manufacturing? I'll start with you, Mike Tramontina, the economic development guy.

Tramontina: Well, that's goods news and bad news. We have 22.5 percent of our economy is manufacturing, and it's growing at a point -- as a share of our gross domestic product.

Mundt: Good paying jobs and --

Tramontina: That's good news by any measure. I've always had a hard time with the idea that we're too narrow, we need to diversify more. We have added, certainly in central Iowa but I think across the state, a lot of financial services growing. Our agricultural commodities have never been worth more than they're worth today.

So I feel like we're reasonably well diversified, but we have to really recognize that the pace of change of technology is so fast today that the fact that we've got good advanced manufacturers here and that we're growing some, boy, in two or three years that could really shift away from us.

So we need to always be looking for ways to transform the economy, transform those manufacturing jobs to the kinds of industries of the future, bio-based plastics, biofuels, those -- we have to be transforming the economy that we have toward future directions as well.

Mundt: And we touched on education just a little bit earlier. But what would you say, Mike Ralston, to state government, to local governments, to Iowa taxpayers about the kind of investments that we need to be making in education?

Ralston: In many respects we're having that kind of debate in public policy circles, Todd, and that's good. I need to say -- I'm biased but we need these manufacturing jobs. They are the jobs that you point out are so important when it comes to pay, when it comes to benefits. But they're also the jobs that lead to innovation, that lead to the kind of change that we all want.

Iowa is fortunate to be a manufacturing leader in the country. Iowa's education system has played a huge role in making Iowa a manufacturing leader. So education is a paramount issue. And the fact the legislators and the governor and folks locally are talking about education again -- education has always been important in Iowa, but it's becoming important again in a real substantive way. And those discussions are very important.

Mundt: Mike Tramontina, the national economy is going to play a big role in all of this too, and the economy seems to be a little bit weak. How do you see the potential -- let's say we have a mild recession that we enter. What's the potential impact on Iowa jobs and manufacturing?

Tramontina: Well, I don't have an economic forecast for you, Todd. Typically Iowa goes into recessions a little earlier than the national economy and usually, at least for the past twenty years, have been coming out of them a little bit slower. I don't know if that's going to be the case this time.

You can see throughout the country and here and throughout the globe that the world is making a transition from a fossil fuel based economy to a biobased economy.

Governor Culver likes to say this is Iowa's time. We have the concentrations of feed stocks unlike anything else in North America. We have got the workforce. We have got everything -- we have got the great research universities in the University of Iowa and Iowa State to be able to make that conversion. Maybe we're not going to go through the recession. Maybe the transition from fossil fuels to bioplastics, biopharmacy, biofuels, bio everything maybe -- maybe won't be as rough on us. I really can't say.


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