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Wed August 6, 2014
Construction Industry Missing Key Tool: Skilled Workers
Originally published on Wed August 6, 2014 5:56 pm
It's a beautiful day and Jeremy Smith, the business manager for a school district in northern Wyoming, is showing off the new Tongue River Elementary School — or at least the plot of land where the school should be.
"What you're going to see when you get up here a little bit closer is you are going to just see pasture," Smith says.
The school was supposed to be under construction by now, but last month state officials said they didn't have the money.
The district sought to keep costs down by borrowing the design for its new school from one that had been built last year in a nearby town.
"[That school] was built for about $211 a square foot," Smith says. "When we opened bids on the same school it was [$280]."
In other words, the new Tongue River would cost 33 percent more than the same school design did last year, just 30 miles away.
It's a problem of supply and demand: There is a massive construction boom right now but construction workers are few and far between.
Largely fueled by the energy industry, tens of billions of dollars of development is in the works along the Gulf Coast and in the Midwest. This year there is almost as much construction work in energy boom states like Wyoming as there was in 2008.
But back then, there were about 6 million Americans working in commercial construction. Now, there are only about 4.5 million.
With roughly 20 percent fewer skilled workers in the construction industry, trade apprenticeships for young people are helping to ease the shortage. But it may be too little, too late.
Ron Kaiser, the vice president of Mike's Electric, one of the contractors that bid high on the new school, says he sees this play out on a daily basis.
"Usually there's people waiting and willing to come to work," Kaiser says. "I've been with the business since '99, and it's the worst I've seen."
He says he's had to raise benefits to attract enough workers.
"What's really strange, you go into an interview and they're actually interviewing you instead of you interviewing them," Kaiser says.
Mike Glavin, a senior manager with the Associated Builders and Contractors, an industry trade association, says that after construction took a nosedive six years ago a lot of skilled workers left the business, and they haven't come back. Many of the workers that did stay were older, and now they're starting to think about retirement.
"If you're a very highly skilled welder you can pretty much write your own ticket," Glavin says.
But he says this has contractors concerned about the future. "Five to 10 years from now ... the folks that they have are going to be leaving the industry, and they don't necessarily see a replacement for those folks."
One possible replacement is Michael Swanson. He's an apprentice electrician and currently working a summer job rewiring the University of Wyoming's engineering building. Swanson actually studied engineering at college for a year, but he says it was because he felt like he had to.
"They almost made it seem like you either go to college or you amount to nothing," Swanson says. "Coming from teachers, from parents, from other kids. It just — pretty much you either go to school or you end up working at McDonald's."
Swanson says being an electrician is really satisfying, both intellectually and financially.
"I can take time off when I need," he says. "I don't have to work overtime without being paid like I would with a salaried job like an engineer."
And Swanson says as an apprentice he's making $26 an hour and he's saving up to buy a house soon.
But a lot more young people like Swanson are needed in the near future to meet demand in Wyoming, and all around the U.S.
Swanson says that when he started his apprenticeship program it could hold 60 students, but 20 enrolled — and only 12 graduated.
The Associated Builders and Contractors estimates the construction industry is facing a shortage of almost 2 million skilled workers by the end of the decade.