“Help Wanted, Work Boots and Skills Provided”
Shortage of Skilled Labor
The shortage of skilled labor is one of the major risk factors in the current resurgent construction market. The temptation to eagerly participate in a market upswing (that had contracted by almost half in 2009) was irresistible. Most contractors dove in head first only to be stymied by a shortage of skilled labor. During the recession, many skilled craftsmen left the industry or retired, and contractors couldn’t find anybody to do the work they had eagerly contracted. The resulting shortage abruptly put both efficiency (cash flow) and quality (debatable change orders) at risk, causing some small to medium-sized contractors to deliver projects late, over budget and, in some cases, default altogether.
When Social Needs Meet Economic Needs
According to a national survey released last year by the Associated General Contractors of America, 80% of contractors were having trouble finding skilled workers. Labor unions had all but abdicated their responsibility to conduct training and apprenticeship programs. High schools no longer conduct shop classes and trade schools do not graduate even a small percentage of the skilled labor pool needed. Innovative solutions were needed, and a recent report in the New York Times gives us an insight into how the industry is coping with this critical shortage of skilled labor.
“Help Wanted – Work Boots and Skills Provided”
(New York Times, January 9, 2019, Joe Gose)
The New York Times reports on the emergence of “innovative partnerships” across the country that are fulfilling both social and economic needs such as “Help Wanted”.
“Jeromy Gaviola was struggling to find steady and meaningful work in San Francisco. Living in the working-class neighborhood of Hunters Point, he heard about a program that was training residents to build the Chase Center, the $1 billion, 18,000 seat arena in Mission Bay that will be the new home of the Golden State Warriors when it opens this fall.
“Mr. Gaviola, 33, applied to the program, was accepted, and completed six weeks training in early September. He is now installing insulation and acoustical ceiling tiles above the Warriors’ practice court. Mr. Gaviola’s experience mirrors that of hundreds of others nationwide as demand for construction labor out strips supply. Facing a tight labor pool, developers, public officials and community organizations are using commercial projects to provide residents with careers in construction. They are making an effort to recruit men and women from impoverished local neighborhoods.
“The developers of Chase Center are getting a hand from San Francisco’s City Build Academy, a program that provides 18 weeks of training for apprenticeships in partnership with City College of San Francisco. These programs provide graduates with union apprenticeships.
“JPMorgan Chase, which acquired the naming rights to the arena, has also kicked in $350,000 to fund special training courses.
“For taxpayer funded projects, San Francisco requires that local workers perform 30% of overall work hours and 50% of apprentice hours.”
In Milwaukee, Gorman & Company, an apartment developer, has teamed up with city, state and community agencies to give former prison inmates on-the-job training restoring dilapidated, tax-foreclosed homes, which are then rented to low-income earners.
In addition to classes, the programs typically provide tools, boots and other equipment to the candidates, and pay for items such as apprentice application fees, child care and gas. Workers make hourly wages of $20 to $30, not including overtime.
Developers of the Miami World Center agreed to hire 10% of their skilled workers and 30% of their unskilled workers from Miami-Dade County. “Even though employment is strong in Miami, these jobs offer a great opportunity for folks because they can move up the ladder as they meet certain criteria,” said Daniel Kodsi, a principal of Paramount Ventures, developer of the $600 million Miami World Center condominium tower.
In Denver, work is about to begin on the $765 million redevelopment of the National Western Center, home of the 113-year-old National Western Stock Show. The development will create 1,000 construction jobs, and the city is requiring contractors to recruit in nearby low-income neighborhoods and to reach out to veterans and former prison inmates.
“There are many construction projects in Denver that have really intensified the need for an expanded pipeline of workers,” said Katrina Wert, director of the Center for Work-force Initiatives. “We want to reach populations that haven’t shared in the city’s recent growth and prosperity.”
The construction industry has always solved intractable problems such as “Help Wanted” through resourceful approaches. The emergence of innovative partnerships that source labor from surrounding underprivileged neighborhood populations is just the latest example of the power of creative thinking.
Read More: Without Skilled Labor and Reality Check