MIT researcher on the welder skills gap vs. pay gap debate

Anna Waldman-Brown, a researcher with the MIT Urban Studies and Planning at the Industrial Performance Center, joins Darla and Josh Welton to talk about the current state of welder careers, and how wages, automation, and perception are affecting the industry.

Waldman-Brown’s research focuses on the adoption of welding robots in small and medium-sized manufacturing businesses as well as the trajectory of welding jobs in both the Midwestern United States and Germany. She is also a member of MIT’s Work of the Future Task Force and recently accepted a position with the Made in America initiative within the White House Office of Management and Budget (OMB).

Part 1 of their conversation covers:

• Waldman-Brown’s background and her research
• Germany vs. U.S. systems of welding education
• The pros and cons of a standardized system for career pathways
• How German companies compete for best apprentices
• Wage gap vs. skills gap in the manufacturing industry
• Pay for welders in the U.S. vs. in Germany
• The impact of robots and automation on skilled workers
• What models of automation implementation are working?
• Why so many welding robots are popping up on used equipment websites in the U.S.

Check out more from Anna Waldman-Brown:

• WIRED: Automation Isn’t the Biggest Threat to US Factory Jobs
• Work of the Future: Redeployment or Robocalypse? Workers and Automation in Ohio Manufacturing SMEs
• Medium: Why AI probably won’t take all the jobs (and what to worry about instead)

TRANSCRIPT

Darla Welton: Welcome everyone. We're so excited for you to join us for this conversation with Anna Waldman-Brown, who is an industrial researcher at MIT, and we connected with Anna. Well, actually, she connected with us after she read Josh's article on the skills gap and his challenge to employers. Josh got a little bit of backlash from the industry, which we weren't surprised about. But we believe that there's a really important message there. But you had reached out to us because you were studying the adoption of welding robots and SMEs and what's happening to welding jobs in the Midwest compared to Germany. And it is fascinating research, and I know Josh was really honored that you're reached out to him.

Anna Waldman-Brown: Was really honored that you all replied. So thank you.

Josh Welton: Mutual honor.

Darla Welton: Yeah, exactly. This whole conversation around welder shortages that we keep hearing repeated over and over, but you are seeing a stark difference in what that means in Germany and what that means in the American Midwest, specifically. We've now since read your articles and looked at the research that you're doing based on how the German welders are educated versus how the American welders are educated. But there's, there's so much to unpack here, and so we want to pick your brain a little bit about all of this research. We really want our audience to hear from you directly.

Anna Waldman-Brown: Fabulous. Thanks, Darla. It's a pleasure to be here and have this conversation.

Darla Welton: So before we jump into all of that, can you share a little bit of your background and how you got involved in this type of research with MIT?

Anna Waldman-Brown: Sure. So I have a background in physics and technology policy. Did a little bit of engineering. I have a "fake" engineering degree in technology policy. I've built a couple things, but I'm sure you all are much better at the actual building of stuff. So I was working with a group looking at small-scale manufacturing in sub-Saharan Africa. And I was particularly interested in energy technologies and what was going on around building solar installations. And so I went got a fellowship to go do research with university called Kwame Nkrumah University of Science and Technology in Ghana. My grandmother and my dad had lived in Ghana for a couple years, so I had connections. And then there was some fabulous group called D-Lab at MIT, and it also worked with a group called the Fab Lab Network, which is all about democratizing the tools of technology production.

Anna Waldman-Brown: And so they do more high-end stuff, but I ended up working with a bunch of mostly mechanical engineers there. And it turned out there wasn't really anything interesting happening on the renewable energy front, but the automotive -- there is these informal clusters of folks by the side of the road who were welding together car parts. So there are all these small firm networks, people like, you know, two to five people, maybe 10 at most, in sort of these ramshackle huts that are built out of, you know, the cardboard and corrugated metal that was taken from some abandoned construction site. And they put things together. It looks kind of like a slum when you get in there, and you realize these guys are building the entire mass transit network for Ghana.

Anna Waldman-Brown: They get FedEx vans, and they'll build doors and they'll build seats and put in 15 seats, and then that becomes a little mini bus. They've started exporting across West Africa. They send to like Nigeria, Mali, Côte d'Ivoire. They also build all of the trucks which transport the cacao beans, which are exported to make chocolate internationally.

Anna Waldman-Brown: So it's a hugely important part of the entire Ghanaian economy, but there are all these small-scale manufacturers who get pretty much ignored. So I got really interested in particularly metal fabrication by studying these guys. And the folks at the bottom of the supply chain who are really critical for making everything else happen. I came back to MIT to get an actual degree in technology policy.

Anna Waldman-Brown: And then a couple years later with the sort of economic crisis, Trump got elected, MIT started, mostly related to the globalization backlash, getting a lot of flack for what's going on in the US and what's happening with manufacturing jobs here, what's happening around globalization. They're like, "You're building the robots and are these robots taking everyone's jobs?"

Anna Waldman-Brown: And so I'd already been working looking at metal fabrication in Kenya. There was an MIT research team called the Work of the Future in 2008. So they invited me to come do my PhD with them and continue working on looking at metal fabrication companies, but with more of a focus on high tech, robots, and looking at the American Midwest. And so I ended up joining that. It's also a lot easier to, you know, go out to western Massachusetts where there's lots of manufacturing happening and a lot of automotive too.

Josh Welton: Right on.

Anna Waldman-Brown: And so that's how I got involved with this team, which has been fantastic. A couple of them were working on the Build Back Better plan right now at the White House and have been advocating for domestic manufacturing policy. It's on both sides of the political aisle since like the 70s and 80s. So it's cool to be part of that.

Darla Welton: Wow. That's a pretty fascinating background.

Josh Welton: Would've never guessed it started with roadside welders in Ghana. Like that's, that's amazing.

Darla Welton: I actually did a interview recently with a woman who went over to Ethiopia. She's a welder, but she was basically doing like mission work. But she ran into a group of welders and they were building their own machines and transformers out of cardboard and just corrugated metal parts. And it was a little scary looking. Not OSHA approved.

Anna Waldman-Brown: There are definitely some safety issues.

Josh Welton: Have some dark pair of sunglasses and good to go.

Anna Waldman-Brown: Yeah. There is definitely a belief that sunglasses will protect you from arc flash, which is problematic.

Josh Welton: Yeah. They don't. Spoiler alert: They Don't.

Anna Waldman-Brown: Actually a colleague at my university in Ghana had done a study on cataracts and other welding-related eye disorders across welders. So there was a push for better safety education.

Josh Welton: Is it the education or is the economics of of PPE? Or is it kind of both?

Anna Waldman-Brown: It's definitely both. I think people don't realize. The craziest safety story I heard was from a young woman who had been doing electrical work in automotive repair. She was sort of an apprentice. Her boss said, "You can't do electrical work." And she was thinking of having a baby. Her boss said, "Look, if you wanna get pregnant, you can't go under the car to do electrical work." Like, there are other ways to jack up the car or do electrical work elsewhere. He convinced her to go into painting. And so then she was pregnant and she was spraying cars. There are like no decent fume hoods or fume protections. Luckily she then went and started her own shop later on that was sort of outside the cluster where she could build a better enclosed area.

Josh Welton: Outta the frying pan into the fire.

Darla Welton: Yeah.

Anna Waldman-Brown: Like, who says, "Oh, you wanna have a baby? Why don't you just spray toxic chemicals?"

Josh Welton: "We've got some lead paint in the back. I hear that's even more safe."

Anna Waldman-Brown: Yeah. So they have a long way to go. Actually the sort of sad thing about this cluster now is that they really don't know how to deal with car computers or electric vehicles. And so there's gonna be a big transition point and hopefully, I mean, this is sort of true I think in most countries developed or not, that there's just a real lack of respect for the people who build the stuff that we need. Right? We, we love the inventors everywhere. But actual fabricators who are critical to getting anything done are just completely ignored.

Josh Welton: Yeah. And a lot of that stems from the people designing things because they think, "You know, well, I have this blueprint here that I made. So, you know, I'm the one behind all this, and it's my genius that created this." And you're just a person who knows how to connect point A to point B.

Anna Waldman-Brown: Yeah. But all the fab shops I've visited particularly around Massachusetts, who were, you know, making parts for these MIT startups. Right? Actually one of them is making one of my professors' parts for this crazy new additive metal manufacturing company. They said no one knows how to design parts for manufacturing. So it's all the fabricators who are redesigning the things.

Josh Welton: Totally.

Anna Waldman-Brown: And there's an incredible amount of expertise that goes in this, as I'm sure you all know. Commonwealth Fusion Systems is a new company that's working on hot fusion. They're also an MIT spinoff. This is one of the most exciting things in renewable energy right now. Right. They're like building the sun in an enclosed system. And so their first big hurdle was reinventing these materials so they could have these super cooled magnets that could also help contain this super heated plasma. And they invented this brand new material. Everyone was really excited, and then they turned to start building a large, full-scale demo out in Massachusetts. They can't find enough fabricators. And so the main thing holding us back is skilled welders and skilled machinists who can make this thing and tell us all the ways in which we engineers and physicists are coming up with this wrong. How is it actually gonna get made?

Josh Welton: Right on. I have afriend in the automotive industry. I asked him what he thought the future of energy with automotive was gonna be. He's like, "I think it's gonna be reactors. Personal reactors per vehicle." I was like, "Yeah, that's, that actually makes a lot of sense." One of my my favorite things about this time right now is material technology is advancing so rapidly. And there's things that like right now we could look at and be like, well, that's not possible, but we're also working on the solutions to make those things possible.

Anna Waldman-Brown: Yeah, totally. But unless you have people who know how to build those things. A society full of inventors is not gonna get you anywhere.

Josh Welton: Right. And one of the other problems we have right now, especially in the United States, which you're keenly aware, is the educational system and how we train fabricators or welders. It's kind of hodgepodge and all over the place. So you can't just go to someone and be like, "Well, you have this welding certificate that means you know how to do all these different things." You have to strike -- you kind of have to get lucky and find the right individuals that have maybe the right background that you're looking for because there is not really a standardized training process in the United States.

Anna Waldman-Brown: Definitely. Yeah. It varies. It's sort of hard. I've been going through my interviews today with different fab shops and small-scale manufacturers in Ohio and Massachusetts. Even in Massachusetts, if you go out to New Bedford, people will say, "Oh, there's a fantastic vocational high school here and we can just get guys from there." And then you go like an hour and a half away and people will say, "Well, we can't find anybody within like a 20 hour drive of us. There's nobody. There are no skilled welders anywhere." So yeah, I think it just is so dependent on the region, the connections that you've got, how much people are paying too.

Josh Welton: For sure.

Anna Waldman-Brown: You look at how wages have increased in manufacturing over time, and they haven't. So when people say there's like a big skills shortage, what they're really talking about is a willingness to work, given their current skills, for whatever those wages are.

Josh Welton: Exactly. Yeah.

Anna Waldman-Brown: Yeah. As you put so well in your article.

Darla Welton: We've already started to jump in a little bit into your research. But let's start with talking about some of what's going on in Germany and what your research has shown while you're talking with these factory owners, operators, factory management, and what that hiring process of welders looks like there. So we'll start with Germany.

Anna Waldman-Brown: Yeah. Germany is actually somewhat easy to explain 'cause it's extremely rigid system. I mean, there are a lot of things that I don't think could translate outside of the German cultural context. Like if you decide at the end of your middle school, essentially. So you hit the equivalent of eighth or ninth grade, and you decide immediately which of three different high schools you're gonna go to. And so they weren't started originally in terms of sort of intelligence, but they've sort of become more like that over time. There's the two-year high school, which is a full high school. You get a secondary degree certificate after two years. And then you go from there onto vocational training.

Anna Waldman-Brown: Your vocational training, for fabricators specifically, is a three-and-a-half-year apprenticeship program where you will spend half of that time learning welding, you'll learn fabrication. There is a very rigid set of skills that you need to know everything from blueprint reading to a little bit of 3D design and fabrication and building jigs. The one center that we visited outside Stuttgart has you build -- they call it like a robot arm. There's nothing mechatronic about it. It's just a little arm that you can move around with your hand. But in order to do that, you are piecing together sort of all of these different sheet metal components and figuring out how are you gonna cut them and how are you gonna machine them.

Josh Welton: You're playing with tolerances and fabrication processes. Kind of one of those things.

Anna Waldman-Brown: Exactly.

Anna Waldman-Brown: So yeah, there's also a metallurgy specification, like a metallurgy track as well. I've only visited a couple of factories. I'll have more to say in February after I go visit some more German factories. But most people have this construction, mechanic apprenticeship. If you think of the difference, an American kid is gonna go to high school for four years and there's sort of the vocational high school and there's the normal high school, but both of those will only get you a high school degree. In Germany, there are three different high schools you can go to. The one that sort of tracked to the trades specifically, which is two years. And then there are other options which are two to four years. The one's that the most sort of advanced is based on if you want more of a white collar job.

Anna Waldman-Brown: And so that'll be a four-year degree program. And that almost always sends you to university. And then the middle one, you can kind of go either way. There's a little bit of flexibility, but it's, you know, imagine deciding at the age of 15, "What, what is my career track going to be?" It's a pretty stark difference. But the thing that works well is you walk into your average German factory -- I visited one firm that makes like hot dog and fish smoking machines. Or one makes specialty construction equipment. Then there are a lot of fab shops which service everything from aerospace to medical devices. And then of course there's tons of automotive, particularly in southwestern Germany. And again, this does sort of depend on where you are in Germany. In like the manufacturing center, Baden-Württemberg, the Southwest, if you walk into any those smaller medium manufacturers, and every single person on the shop floor has this vocational degree that is combined schooling and apprenticeship.

Anna Waldman-Brown: And so they talk about the qualifications to have a job. You know that you have all of these skills coming in. About 72% of German apprentices are going to stay at that firm where they do their apprenticeship. So they'll also learn all of these job specific skills and firms will compete to get the best apprentices. And there are two firms that told us they were bringing in new technology because they wanted to get the most enthusiastic young welders who knew that the future would be something around robots. They wanted to have robots. And you go to the websites of these German firms and they'll say, "We're looking for apprentices." You click the apprenticeship thing and it's like, "This is our robot. Here's our fancy CNC machine. You will be learning from the best and the brightest. Our firm is awesome. Here are all the social activities we do, etcetera." And so there's a real culture and enthusiasm around having the apprentices. It's given a number of American factories that will have apprentices or co-ops. But there's, there's nothing that's institutionalized in the same way.

Josh Welton: No. And so much of it is whether it's actuality or just it seems like so many factories are trying to invest so they can not put as much into the workforce so they can decrease their labor costs or go for people who aren't as educated. It feels like a very different paradigm.

Anna Waldman-Brown: Yeah. At the same time as Germany has been sort of building up its apprenticeship more. They have a whole -- I dunno if you've heard of Industry 4.0 -- but there's a whole effort to digitize manufacturing and bring in sort of sensors and robots and AI to whatever extent cyber, physical systems. All these fancy words. It's less buzzwords in Germany in the same way that it is in the States. They're actually trying to bring digitization into the apprenticeship courses. So they'll be teaching kids when they first get to these vocational schools where they'll spend half of their time in school and they'll spend half of their time at the factory doing their apprenticeship. It's really trying to introduce them to whatever the new technologies are and get them excited about the future of manufacturing.

Josh Welton: Right on. I feel like I had a nice experience with my education and going through the a four-year apprenticeship at Chrysler.

Anna Waldman-Brown: Which is rare.

Josh Welton: Yeah. It is. And that's why I get people who ask me how to get to where I'm going, and there's no easy answer because I can't tell them to do what I did because, to be quite frank, I mean, obviously I took advantage of the chances I had, and I worked my butt off, but I really got lucky with a lot of things. You can't just be like, "Well, go join this union and get into this apprenticeship." And part of it is the unions are so hodgepodge here, and they've controlled the apprenticeships for so long. It's like you have to have this really strong labor union, where it kind of is overarching over everything. But here it's more like, we've got our little group of people we wanna protect this little thing we have. And it's very localized. It's very niche. I wouldn't trade my education for the world, but I feel like not a lot of people here are getting that education.

Anna Waldman-Brown: The phrase that fancy academics will use, talking about countries like Germany, is "codetermination," meaning that the unions representing the workers and the small and medium firms and the big firms have all been working together since the 1890s or so to figure out what's the best way to establish these kinds of programs that will let sort of the firms and the workers work together to establish it -- like all of these artisanal programs initially.

Josh Welton: It's beneficial to everyone, whereas it seems like we just keep trying to get over on each other over here. How can we take advantage of this situation for, you know, extra money in my bank account? And that goes for whatever level, but clearly the people who already have that money are the ones who are able to dictate the strongest terms. So yeah. It's frustrating. We'll get into that.

Anna Waldman-Brown: There's sad story from the early days of apprenticeships in metal fabrication, like 1920s-ish in Massachusetts, where a couple of firms realized, "Oh, hey, we can get poor kids for really cheap." So these apprenticeship systems were set up with decent intentions.

Josh Welton: Right.

Anna Waldman-Brown: The firms very quickly were trying to force kids to work all of the crappy jobs, to stay really long hours. And they weren't really teaching them anything. So of course all these kids left and it sort of set up the apprenticeship as an exploitative system. Whereas in Germany, there's more of this understanding where kids will go into the factory, of course, they're gonna be not paid as well, but they're also gonna be mentored and they're gonna be offered a pretty great job upon graduating. In a way where a kid in who has, who's that same age coming out of say, a four-year high school is not gonna have that firm specific experience.

Josh Welton: Right.

Darla Welton: I feel like there are many areas of the American manufacturing world that still kind of get, you know, they're still perceived that way in some regards.

Josh Welton: And there are pros and cons. I'm not a huge fan of our educational system. Our high school system has degraded so much that by the time you're going to university, they're teaching you things that you should have already learned because we're trying to do mass education, so it's catered to like the lowest common denominator. But at the same time, having the freedom to be able to choose what you wanna do later in life is hard to give up. But what are we really giving up when we're going into, you know, six-figure debt by the time we're 22? And we realize, even at 18, "That's not what I wanna do. I don't know why I did that."

Josh Welton: I don't have a lot of firsthand -- just things that I've read -- the European unions have always been strong, and it feels like they've always done more on the job training, which to me makes a lot more sense. You basically just described that, the benefits. Is it possible for us to change here or is that just one of those freedoms where we're like, "No, that's my right to not choose to do something until..."

Anna Waldman-Brown: Get screwed over by college debt. The America way.

Josh Welton: Yeah. I don't know. I shouldn't say that it's not changeable because I've seen so many things change in the last 15 years, 20 years, since I was college age, and how we've perceived things. And we were even just talking to somebody the other day about how more and more corporations are, especially in the tech industry, are like, "Screw that piece of paper, that degree. We wanna see if you can do the work. We wanna see if you're trainable." Do you see things in our country evolving or changing to be more like that? Or is that kind of pipe dream?

Anna Waldman-Brown: I think there are parts of it that we can take. I've interviewed a number of small factories who say, "You know, the government sucks. We're all libertarians. The schools around us suck. We wanna create our own welding school." And so the number of factories who have, or who have volunteered to be the lead for their AWS chapter, they're going to the local folk and telling them, "Look, these are the things that, you know, we small businesses really want." I know more about the system in Ohio, but there's a number of both employer- and worker-driven organizations. Whereas in Germany, it's this very formalized, you know, government- and big firm-led system. There's a lot more of this ground-up, you know, American innovation style that I think has a lot of hope for the future.

Anna Waldman-Brown: As we can work on networking that, and I think we do need some degree of government support for all of this, because, like, as you're all saying, there are things that are very broken about our system. And the interesting thing is the German system actually last year had a record in the fewest number of kids going on to apprentices. And so even Germany is having this crisis of, you know, maybe kids actually wanna go to college. Of course, colleges are, you know, either free or heavily subsidized throughout a lot of Europe in a way that they're not in the States. But I think it's interesting because there are kind of forces on both sides, right? You've got the Germans moving away from the apprentices while the Americans are realizing, there's the state of, I think it's North Carolina that has all these German-run automotive manufacturers who are saying, "We need to set up an apprenticeship system in our state."

Anna Waldman-Brown: And so it's German companies working with the state to set up an apprenticeship program.

Darla Welton: Oh, that's cool.

Anna Waldman-Brown: And so you're sort of starting to see on both sides. And then I think the bootcamp idea that's become really popular, you mentioned programming. I talked to one firm, which had a 20-year-old girl who went to welding metallurgy bootcamp in Maine. She came back after nine months and was starting to program this collaborative robot because she didn't have the welding chops yet. This, you know, gets into my interest in the technology. The robot knows how to do those job specific skills, right? The robot can weld aluminum. And so if all she needs to do is tack the parts up in the right way, she can start getting familiarized with what the welding looks like and the robot can do the hard stuff while she's sort of working her way up to become better.

Darla Welton: Interesting. I'm just thinking through, you know, what that could look like. I can see it varying, you know, state by state. Quick question about Germany. So this opportunity to go through this high school program, is that pretty much all across the board in Germany? So like, no matter where you live? Or where you live, does that sort of determine your opportunities very much like it does here in the United States?

Anna Waldman-Brown: Yeah, that's a really good question. So, you know, Germany was divided half Communist and Soviet, right? You have, so you have Eastern and Western Germany. And formerly Eastern Germany, places like the Ruhr Valley, there was a lot of manufacturing, historically, and there still is today. And they do not have these same dense networks. So you will, you will see sort of vast regional differences. I wanted to start comparison. So I went to like the absolute best part of Germany -- it's ironic because thinking of Germany the Southwestern Germany and Baden-Württemberg and the Midwest in the States were both these huge automotive manufacturing centers. And then at the same time in the 1980s as the Rust Belt became a popular term, the state of Baden-Württemberg in Germany had this huge high-tech push for manufacturing and for strengthening sort of state partnerships with bigger firms and smaller firms and the apprenticeship programs. And Baden-Württemberg was named the showpiece land for all of Europe. Right? And so these are two regions that really looked pretty similar, if you go back to say the 1960s, but they completely diverged. Americans were always a little scared to talk about industrial policy because it sounds sort of like a Soviet centralized planning thing, which never worked in Germany either, right?

Anna Waldman-Brown: But you think about how much support we have for military manufacturing or something like we subsidizing corn? We have massive agricultural subsidies for corn and the corn-eating cows that go on to make meat and dairy much cheaper. Like, why don't we have similar sorts of subsidies or similar sorts of policies that really support where there are market failures in manufacturing. And that's something that Germany has done a good job at, while still thriving and being somewhat innovative. In the U.S. we really win on all the innovation measures, so that's sort of one benefit to our crazy, "everyone can do whatever they want" system. We're good at innovation, but, as we talked about earlier, if you're gonna innovate, you still need people to build that stuff. And those people need to be really good and really clever about building in order to be innovative about whatever hasn't been made before.

Josh Welton: That was one of my frustrations when, well, particularly during the, the global financial crisis in the late 2000s. The bailout was one thing or another, but the biggest thing is we're trying to compete on a global stage where other countries are very open about their subsidization. Like in Japan, when they developed the Prius. The Japanese government paid for a lot of that. And then when the United States fell behind in EVs or in hybrids, people are looking at the individual organization and companies saying, "You guys dropped the ball." It's like, well, yeah, but their government's helping them with that stuff. But we see that as these payouts. But if you have a global economy, at some point you have to kind of compete with global standards.

Josh Welton: And I think one of the things that the U.S. ss really bad at is calling some things subsidies. The terminology and how they hide some things and not others, like corn. We subsidize so much farming. And I understand the importance of a lot of that, but there's a lot of issues of that causes too. It feels like there's a vibe between privatization, like what we think is privatization and what is actually privatization. And even in a higher education, we look at it as like, "Well, you should be paying your own way and this and that." And the college endowments are getting insane.

Josh Welton: The people running the schools, they're the ones benefiting from this, where it should be really the students that are benefiting from it. And we look at everything like where the money's going, the money trail. And I don't think we see the reality of where the cost benefit is compared to a system where there's a lot more put into the other end of the education and the technology development and things like that. That was a long rambling. I don't know if that made any sense whatsoever.

Anna Waldman-Brown: Yeah, I totally agree. I think you look at, you know, lasers. Lasers are everywhere now, right? Yeah. And Americans develop laser technologies using some grants around the time of the space race. One of the biggest pushes for laser technologies was, you know, the giant space laser that would shoot down Russian nuclear missiles. Total failure of a giant death ray project.

Josh Welton: How cool would've that been?

Anna Waldman-Brown: It would've been really cool. It's true. Yeah. I'm sure, I'm sure we're still working on it.

Josh Welton: I bet we have it. And the "big non-laser agenda" is shutting it down. So somewhere there's death ray.

Anna Waldman-Brown: That and the Air Force UFO secret base.

Josh Welton: I was at Area 52 working the last couple of months, and it was probably out there. I would not be surprised.

Anna Waldman-Brown: Oh, oh, yeah. Yeah. That must've been fun.

Josh Welton: I was definitely not doing any alien autopsies.

Darla Welton: ,

Josh Welton: Or reverse engineering UFOs.

Darla Welton: Let's talk a little bit about the differences in pay. I'm sure when the German students, German apprentices start out, I'm sure it's still at a lower wage. But what has your research shown in America? We see the most drastic difference in wages since the 70s have not increased.

Josh Welton: Since like 1979.

Darla Welton: Yeah.

Anna Waldman-Brown: The great divergence graph.

Anna Waldman-Brown: Exactly the change in economic policy and labor strength was a big part of it. But since 1975, the middle class has continued to shrink into nothingness, basically.

Anna Waldman-Brown: Yeah. It's awful.

Darla Welton: And so what were you seeing in that same time period in Germany? What has happened? Have they seen an increase in wages? What does that look like?

Anna Waldman-Brown: Yeah. Again, this is a story of Germany doing better, but starting to look a little more like the U.S. more recently. So in manufacturing, looking at 2016 and I don't even have any idea what's going on with wages right now. Between inflation and there's just a lot going on.

Josh Welton: A lot. The last few years have been hectic.

Anna Waldman-Brown: Yes. Right. But going back to 2016. So the average German manufacturing worker, who has more both general and firm specific skills than the average US manufacturing worker, earned $43.10 plus $8.88 in benefits per hour. The average American earned $39 with only $3.66 in benefits. So you can see they're like closer in the average salary, but the Germans have much higher benefits. And then if you look at medium scale, there's a much bigger difference. That's someone with a vocational certificate in Germany and probably a high school degree in the U.S. And so it's about the same number roughly of years of schooling. Right? But again, the German system is gonna be much more tailored towards whatever you're gonna go into. In 2016, the average German earned $24.31 per hour, the average American earned $14.55 per hour. So there's a $10 per hour difference, which means a lot when you're talking about $14 an hour.

Josh Welton: Yeah, absolutely. That's a huge, huge schism there.

Anna Waldman-Brown: So it's the skill level, right? Because you look at the average manufacturer, the average manufacturing worker probably knows a bit more about programming or even has a university degree in Germany and the U.S. because -- I dunno exactly how they define manufacturing worker, but I think like your automotive company managers would probably count as that. And so it's really this "medium skill." So you look at the U.S. Compared to a bunch of comparable developed countries, we are really bad at paying medium skilled workers.

Josh Welton: Yeah.

Anna Waldman-Brown: And I don't really like this term because some of this "medium skill" is all about formal education.

Josh Welton: It just falls into that classification. Yeah. I get it. Here, so let's say you've spent 10 to 15 years in a job, a lot of times what we'll have happened is we'll have people being laid off to higher in cheaper labor, even if it's not skilled. In the U.S., if you're in the skilled trades, 10 to 15 years, you're not gonna be making a lot more money than you're making right now. But if you have to start over, a lot of places only pay by seniority, not on skill level. Personally where I work right now, if I were to go in and hire in right now, I would make roughly $16 less an hour than what I'm at right now. And that has nothing to do with skill. It has everything to do with seniority, but I'm guessing in Germany there's a little bit more loyalty on both ends from both the employee and the employer. More of a mutual beneficial kind of thing going on.

Anna Waldman-Brown: Yeah. It really does cut both ways, as you're saying. Because the worker needs to know, "If I stick around here, what am I gonna get for it?"

Josh Welton: Right.

Anna Waldman-Brown: And the firm knows, "We've trained you up. If you stick around, we're gonna make your life better too."

Josh Welton: Here, that training is considered a reason for loyalty. It has nothing to do with pay. It's like, "Well, we trained you so you should stay here." It's like, "Well, yeah, you trained me, so you should pay me more, so I'll stay here."

Anna Waldman-Brown: Right.

Josh Welton: There's just this little piece of the puzzle that's missing that kinda affects everything.

Anna Waldman-Brown: Yeah. Definitely. And it helps that training is subsidized in the German system.

Josh Welton: Totally. Well, and that's another thing. A lot of companies will try to push for the government to do more to subsidize more training, which I'm not against. The problem I have is when the companies are pushing for it and then they're using it as a benefit. Like that's part of your pay, sort of thing. Like that's almost the general gist. It's like, "Well, you're benefiting because you're getting this training, but we're benefiting because we're getting you really cheap because the government trained you how to do this." And it goes hand-in-hand with what you were saying, kind of from the top down. Companies and the government, they're, they're working together. Whereas here, there's always this give and take, there's this push and pull kind of thing going on. Everyone's trying to get over on each other. And that's my biggest issue right now that I have with large manufacturers that are pushing for this. It seems like they're pushing for it not to get better workers, but to get more workers, like more fish in the barrel so, basically, more fish in the pond you can pay less. It's like a competition for people to take lower wages.

Anna Waldman-Brown: Yeah, absolutely. Economists like to say, "You can't say that there's a labor shortage unless you can prove that the pay is going up."

Josh Welton: There's a couple people at EPI that have a definition I use all the time. Some people looking at me like, "That's just some definition that somebody made up." Well, it makes sense: Saying there's a skills gap with no quantification of where the pay is at, you're only telling a third of the story or a part of the story.

Anna Waldman-Brown: Mm-hmm

Josh Welton: But I agree with that definition. I think that there's a certain percentage. There has to be a certain unemployment rate and a certain wage increase, and then you can say, "Okay, your wage went up this much and you're still not finding workers. Then you have a skills gap." And we don't have that.

Josh Welton: Oh, hi, April!

Darla Welton: Our dog just walked in.

Josh Welton: There were like 20 different trades I was looking at, and I think one of them qualified, and it was just by like the slimmest of margins. Even with welding, we look at it as a growth industry. But the reality is the board of Labor statistics or the Bureau of Labor statistics shows growth is average at best. It's not this like this torrent of -- that's where I come in. That's where I feel frustrated when I see all these societies and these organizations putting out that, you know, "We're gonna need 400,000 welders next year." We have like 400,000 welders total in the country right now. Next year, we're not gonna all of a sudden need like 10 million more welders or whatever the numbers they come up with are. I get frustrated with that. But I'm going on a side note now. Reign me in, Darla.

Anna Waldman-Brown: Reign you in, huh? .

Darla Welton: I'm not getting involved in that.

Anna Waldman-Brown: One of the problems, I think, to be fair to particularly the smaller manufacturers -- the big guys have no excuse, right? They should just be paying people more. There's a funny history of American firms adopting more technology than the technology is actually capable of in an attempt to get rid of skilled workers. And so you saw this with automotive firms. They brought in these milling machines around the cusp of when CNCs were just being invented, which were billed as management-run machines. The ads said you could just sit at your desk and then have an unskilled operator loading and unloading this thing. And of course it was a total disaster because management didn't know how to program the machines and they got the punch cards wrong, and then there was no one on the shop floor who knew what to do with them. This all came about at the same time as this real strife between the automotive unions and the factories themselves. And so there's even Elon Musk ...

Josh Welton: I was just about to say. I was just biding my time. In Fremont, he was like, "I'm just gonna automate everything." And it's like, "Uh, yeah."

Anna Waldman-Brown: The Alien juggernaut of fully automated lights-out factory.

Josh Welton: Maybe you don't know more about manufacturing than anyone else in the world, Elon, because that did not work. No, it's the exact same thing, trying to push the technology to do things that it wasn't capable of doing just because you wanted to pay less people.

Anna Waldman-Brown: Exactly. We're really good at that in America.

Josh Welton: Yes.

Anna Waldman-Brown: They're firms that we asked about welding robots who would say, "Oh no. We see these welding robots on used equipment websites all the time." Everyone just keeps trying to buy welding robots to get rid of welders. And then it turns out, you know, you still need welders to program most of your welding robots.

Josh Welton: Yeah.

Anna Waldman-Brown: It just doesn't work. There are a couple firms who are like, "We're never gonna get a welding robot. We see way too many people trying to sell them." They bring them in to replace skilled workers and then they don't, they don't do what anyone wants them to do.

Josh Welton: Yeah. And it goes both ways, like you need both. I mean, you can have a welder without the robot. And that was one of the things going to FABTECH [in 2022] that was that I was personally blown away by, the amount of automation that was there. But specifically the cobot; the the interactive man and machine kind of thing. That seems to be really the next step. And companies are making a concerted effort to make it so. One of the reasons going to cruise control or lane control with cars. Like going from that to fully automated, that's a huge jump.

Anna Waldman-Brown: Oh yeah.

Josh Welton: And it's the same thing with manufacturing. To go from someone making stuff by hand to just punching a button and a machine to do it, that's a gap that's way off in the distance. It's way farther than people realize, going complete AI. But man working with machine kind of feels like that's where that sweet spot is.

Anna Waldman-Brown: Yeah. I love your sculpture with the dancer and the robot. That's exactly it.

Darla Welton: Thank you for checking out Part 1 of our interview with Anna Waldman-Brown. And stay tuned for our continued conversation in Part 2, where we discuss automation and AI risk, ethical economics, why expert welders are still needed for our future and so much more. We'd love for you to join in the conversation. So please send us your comments and questions and we will get back to you. Thanks again to Anna, and thanks to you for watching.