business

Federal Reserve's Patrick Harker hears what Philly's manufacturers need: capital, know-how, and workers who aren't high

Jane M. Von Bergen, Staff Writer

Updated: Tuesday, November 7, 2017, 3:14 PM

Chief executive and co-owner Alan Levin, left, explains his company’s window manufacturing process to Patrick T. Harker, right, president and chief executive officer of the Federal Reserve Bank of Philadelphia, during Harker’s tour of Northeast Building Products Corp. in Northeast Philadelphia on Monday. JESSICA GRIFFIN / Staff Photographer

Alan Levin has 25 job openings at his 550-employee factory, Northeast Building Products Corp. in Northeast Philadelphia.

Now if only he could find some workers who aren’t high on drugs to fill them.

“Turnover is the highest it’s ever been,” Levin told Patrick Harker, president of the Federal Reserve Bank of Philadelphia. “For every 100 applicants, we can get maybe two, because they can’t even pass a drug screen.”

Nate Mell’s custom ceramics business, started when he was a waiter, has been growing, and now Felt & Fat LLC in Kensington has five employees, three partners and, once again, a need for more space.

Now if only he could gain more business know-how.

“I’m a fine arts major — not too gifted in business,” he told Harker, who visited both organizations Monday morning as part of a field trip designed to help him and federal policymakers learn how manufacturers large and small could be assisted by the government.

Harker asked Mell if he still had time for the creative sculpting that started his business, which now supplies custom-designed, elegant dishes to restaurants worldwide, including one in an upscale hotel in Qatar. “Just building this business has been a creative endeavor for me,” Mell said.

At the end of the tour, which included a walk through partly finished, partly raw industrial space being assembled into MaKen, the branding name associated with a major real estate play in the Kensington area by Shift Capital LLC, Harker took a rest in an empty room and talked about what he had learned.

“There is no one-size-fits-all approach,” Harker said. Some need help with capital, some need help with workforce, some need help with business smarts. But, he said, he’s more convinced than ever that manufacturing is a key path to lead neighborhoods like the ravaged ones in the un-hip parts of Kensington into something resembling prosperity.

“When you get these islands of despair, when people there have no hope, it leads to behaviors that people know is not in their best interests,” and then they can’t work because they are too high, or too lacking in imagination, or don’t understand what’s required to keep a job, he said.

“Companies can’t find the people they need, and people need hope,” he said. With the low unemployment rate plus the demand for workers, “we’re at a point in time where we need to help solve the problem,” perhaps adding more social services to the workforce and investing more in education.

Accompanying Harker on his field trip Monday were officials from the Urban Manufacturing Alliance, a national nonprofit research organization that is studying manufacturing in about 15 urban locations, with an in-depth look at six cities, including Philadelphia.

In 2015, 21,345 people held manufacturing jobs in Philadelphia. That’s just 56 percent of those available in 2003, when company payrolls numbered 38,353. In the region, manufacturing employment fell to 169,091 from 228,682 in 2003, according to a report on manufacturing that the alliance and the Fed are releasing this week

Although manufacturing has declined, remaining factories still offer the best-paying possibilities to people with lower education levels. Also, there is a small resurgence in the sector. The idea, said Lee Wellington, head of the alliance, is to find out how policymakers can encourage the resurgence and retain existing jobs.

“There are gaps” in policymakers’ knowledge of the sector, she said. It can be as basic as how manufacturers identify themselves. Some adopt the title of maker or designer rather than business person or entrepreneur.

Jane M. Von Bergen, Staff Writer

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