The Free Press, Mankato, MN

May 22, 2013

Area manufacturers worry about health care

By Tim Krohn

---- — NORTH MANKATO — As a group, local and state manufacturers are a bit less enthusiastic about the economic direction and future of Minnesota, are worried most about health care and the Affordable Care Act, don't expect to raise wages much in the coming year and are having trouble finding qualified workers.

Still, 82 percent of manufacturing executives say they are confident in the future of their own companies.

"The feedback was more mixed this year than in recent years," said Bob Kill about the annual survey of state manufacturers.

Kill, president of Enterprise Minnesota, said uncertainty about strong economic growth, a total lack of faith in Washington and fears of rising health care costs are making executives less optimistic than they were the past two years when the recession began to wane.

New health care rules have moved to the top spot of concerns with 67 percent of manufacturers listing it as their top worry.

"Affordable health care has trumped everything else for recruiting employees," Kill told a group of local leaders at a meeting at South Central College Wednesday.

That's because potential employees say getting affordable health insurance from their employer is more important than pay and benefits.

Executives aren't counting on Congress to offer any leadership on health care — or anything else. Nearly 80 percent of manufacturers say they have no confidence in Washington.

"Executives will tell you, if we know where the bumps in the road are, we'll avoid them. But you can't keep moving the bumps around," Kill said.

Just under half of manufacturers reported increasing wages in the past year, but employees shouldn't expect the trend to accelerate. The percent of executives who expect to increase wages in the next two years fell from 54 last year to 48 this year.

There are 7,400 manufacturers in the state, divided equally between the metro and outstate. They provide 13 percent of the state's jobs and 15 percent of all wages.

But even with thousands of relatively well-paying jobs open, manufacturers say they have a tough time filling them.

"They used to draw kids from the farm, but there aren't many farms," Kill said. He said manufacturers need to show parents that it's a good career choice for their kids.

Keith Stover, president of SCC, said the college and area manufacturers have teamed up to provide a pipeline of qualified employees. The college was one of the first in the nation to start the Right Skills Now program, which features two semesters of intense training followed by a paid internship.

"We are big into manufacturing," Stover said. But he said manufacturers need to support such tailored programs.

"If you're looking for new employees, you need to help us on the pipeline end."