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Labor Shortage: It's Not Necessarily About Pay

Mon September 24, 2018 - Southeast Edition #20
Jennifer McKevitt - CEG Correspondent


Ken Simonson, AGC's chief economist, believes the true source of worker shortages isn't pay-related. The real issue is training.
Ken Simonson, AGC's chief economist, believes the true source of worker shortages isn't pay-related. The real issue is training.

A recent report from the Associated General Contractors of America notes that more than 80 percent of contractors are struggling to fill hourly craft positions or those that require specialized training to perform. In an attempt to lure in talented workers, per diems and other pay structures are growing increasingly competitive.

CEG spoke with Ken Simonson, AGC's chief economist, who believes the situation will take more than adjusted per diems to resolve.

“Construction firms are definitely sensitive to wage and benefits packages,” Simonson said. “However, the problem of attracting qualified workers goes deeper than adjusted costs for meals, travel and lodging.”

The true source of worker shortages isn't pay-related, he believes. The real issue is training.

“About a decade or more ago, schools began de-emphasizing the value of trades,” he said. “Career counselors told everyone that college was the best way to land a high-paying job.”

What the counselors didn't foresee was the accumulated effect of generalized advice. As a result, many degree holders are now struggling with massive debt in minimum wage jobs as a result of a glut in qualified staff for a variety of white-collar positions. Employers are thus able to demand more specialized skills due to competition, further limiting opportunities. However, had those same individuals obtained technical training in construction or manufacturing, they'd likely be gainfully employed with minimal loans to repay.

“Students were told that craft jobs in construction were dead ends. Academics were the best path to professional stability. The fact is that's simply not true,” Simonson said. “It's actually an exciting time to be in the business of building. We're introducing drones, laser guided equipment, robotics and 3D printing, among other technical tools.”

Recession Hit Construction Hard

In truth, however, construction did face a severe downturn during the recession.

“Jobs in construction declined around 2006,” Simonson said. “Nationally, there were roughly two to three million layoffs at the time. The field rebounded by 2011, however, and now we're struggling to fill all the positions available.”

According to AGC's Workforce Development Plan 2.0, “nearly one third of all construction jobs disappeared nationally [during the recession] … yet less than two years after surviving near-Armageddon, many construction firms began reporting to the association they were having a hard time finding qualified construction workers to hire.”

Sadly, few construction employers consider this shortage temporary. AGC in conjunction with Autodesk report that 33 percent of construction firms expect that it will continue to be hard to find qualified workers within the coming year. Forty eight percent believe the worker shortage will worsen during that time.

Putting a Plan Together

In a nutshell: construction needs more talented workers with technical skills to operate cutting edge equipment. What's the solution?

“We have all kinds of workforce development plans in place,” Simonson said. “One of which is having organizations that support construction working with schools to offer not only career advice, but also training opportunities.”

Current solutions apply not only to current students, but also to under- or unemployed adults, to be enacted through legislative and regulatory reforms. In its Workforce Development Plan 2.0, AGC states that “many of the changes entail greater federal funding, greater responsibility and flexibility to tailor and create local programs for in-demand skills in local markets.” The plan also suggests that a blend of actions is what's needed, as there's no “one size fits all” method for solving the dearth of workers.

Chief among the suggested plans for growth are ensuring adequate funding for WIOA (Workplace Innovation and Opportunity Act) and CTE (Career Technical Education) programs, both of which have been severely cut in recent years; applying Pell Grants to short term training programs and enacting greater accountability and reform in higher education in areas of workforce preparation for students.

One aspect of the development plan is more controversial than others: Reform Immigration to Address Worker Shortage. With immigration so often in recent news, the AGC's decision to include this option is accordingly careful in phrasing: “For decades AGC of America has supported immigration reform that strengthens national security but also addresses workforce needs. The broken immigration system is a prime area to look to address the worker shortage with an estimated 10 million unauthorized individuals in the United States without the ability to lawfully work for employers. The lack of a legal visa program for construction workers and a recent tightening of legal immigration will worsen worker shortages if not addressed comprehensively. True reform must include a mechanism for construction industry employers to hire the temporary foreign-born workers they need when American workers are unavailable and economic demand merits.”

While some may object to this inclusion, the fact is that historically, America has always relied on immigrant or new resident labor for such landmark construction projects as railroad, skyscraper and bridge building efforts.

In addition to immigrant labor, groups like AGC fully support expanding work opportunities to what were once perceived as out-of-the-box staff.

“Anyone with appropriate skills is a desirable employee,” Simonson said. “That includes women, minorities and even the formerly incarcerated. We're broadening our outreach to a far wider pool of workers these days.”

Further options supported by groups like the AGC include Educate the Media and Public About the Benefits of Working in Construction; Supporting and Recruiting Veterans, and Statewide Go Build Campaigns, which seek to address misperceptions about working in construction with a more modern and accurate vision that better reflects current conditions in the field. Scholarships for those seeking education support are also being made available to worthy students.

Clearly, construction associations are using innovative thinking to reach well beyond what was once considered the field's traditional audience. In fact, what they most wish to emphasize is that there is no traditional audience: construction, in all its forms and guises is no single task aimed at a predictable type of individual. Anyone interested in training to learn much-needed skills is a potential employee. In construction, more than any other field, the sky is truly the limit.

CEG