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Contractors Act to Avert Labor Pinch

Wednesday, April 16, 2014

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A new plan aims to combat a shortage of skilled construction workers by pushing legislative and regulatory reforms that would make it easier to establish career and technical training programs. 

A little more than half of the U.S.'s metro areas saw an increase in construction jobs over the last year, but a lack of skilled workers could undermine recovery and impact economic growth, according to the Associated General Contractors of America.

To address the shortages, AGC has announced a new national plan, "Preparing the Next Generation of Skilled Construction Workers: A Workforce Development Plan for the 21st Century," which outlines measures to make it easier for schools, construction firms and local construction associations to establish career and technical training programs.

construction employment

With the U.S. facing shortages of skilled construction workers, AGC is pushing a new national plan to enact legislative and regulatory measures to increase training and education programs.

"The consequences of inaction for both the construction industry and the broader economy are simply too severe not to act," said Ken Simonson, AGC's chief economist.

What's at Stake

According to AGC, construction employment expanded in 175 out of 339 areas between February 2013 and 2014.

However, nearly two-thirds of construction firms are reportedly having a hard time finding qualified workers to fill the jobs they are adding after spending several years in a downturn. In addition, 79 percent of contractors expect the shortages to remain bad or get even worse in the next year, association officials noted. 

AGC says a lack of sufficient training programs across the country means that construction firms will have a hard time finding skilled workers as the industry expands, ultimately undermining recovery and broader economic growth.

The association's new plan outlines measures that federal, state and local officials can adopt to expand training opportunities, so that more people are ready for the growing job opportunities in construction.

'Take Steps Now'

"To avoid going from a market where firms don't have enough work to one where they don't have enough workers, the nation needs to take steps now to prepare the next generation of workers," Simonson says.

"Fortunately, through a combination of new investments, pragmatic changes and immigration reform, it is possible to prepare the next generation of construction workers."

This January, the construction industry saw its greatest year-over-year increase in spending since 2006 and added 15,000 jobs in February, raising the industry's employment to almost 6 million jobs—the highest level since June 2009, AGC reported.

Calling on Washington

AGC plans to share the workforce development plan with elected federal officials and has reached out to Vice President Joe Biden's office to help his review of federal training programs.

Associated General Contractors of America

The construction industry has been adding jobs, but there may not be enough workers to fill them. Between February 2013 and 2014, employment increased in 175 out of 339 metro areas.

The plan calls for significant changes to federal career and technical education programs. For example, Simonson notes, Congress and the administration need to reform the Carl D. Perkins Career and Technical Education Act of 2006 to give states greater flexibility and autonomy in establishing secondary career and technical education programs.

Congress also needs to reform the Workforce Investment Act of 1998 to make it easier for local Workforce Investment Boards to partner with apprenticeship training programs, Simonson says.

AGC's plan calls for increased funding for both federal programs once they are reformed and accountability measures are in place. The association is seeking an increase from $1.12 billion this year to $1.3 billion next year for the Perkins Act, which would return it to its 2007 funding levels. For the Workforce Investment Act, AGC says $20 million should be invested over a three-year period and tax credits should be extended to firms that train and hire veterans.

Anti-Trust, Immigration Plans

In the meantime, AGC says Congress should enact measures that make it easier for firms and local associations to train new workers. Specifically, it should expand antitrust exemptions to open-shop contractors so they can enter into agreements among themselves for training programs, AGC says.

Additionally, AGC's plan calls on Congress to pass comprehensive immigration reform to allow construction workers to enter the country, especially in cases where worker shortages "are so significant they threaten to undermine the recovery."

On a state and local level, AGC says officials need to enact measures to establish new charter schools that focus on skills-based training and make it easier for school leaders to establish career academies and other skills-based programs.

According to Simonson, charter schools established by AGC chapters in St. Louis, MO, and Albuquerque, NM, achieve higher graduation rates than traditional neighboring schools.

Preparation is Key

Throughout the country, construction employment expanded in 175 metro areas, declined in 106, and was stagnant in 58 between February 2013 and February 2014, AGC says.

However, despite these gains, construction employment remained below peak levels in all but 19 metro areas.

The areas that added the largest number of jobs were:

  • Houston-Sugar Land-Bayortown, TX (9,600 jobs, 5 percent);
  • Santa Ana-Anaheim-Irvine, CA (8,600 jobs, 12 percent); and
  • Los Angeles-Long Beach-Glendale, CA (8,000 jobs, 7 percent).

The areas with the largest job losses were:

  • Gary, IN (-4,700 jobs, -25 percent);
  • Bethesda-Rockville-Frederick, MD (-3,100 jobs, -10 percent); and
  • Putnam-Rockland-Westchester, NY (-2.100 jobs, -8 percent.

AGC called the addition of new jobs "welcome news," but again warned about the skilled labor shortages without proper training programs.

©iStock / tenenit

"The consequences of inaction for both the construction industry and the broader economy are simply too severe not to act," says AGC chief economist Ken Simonson.

"During the last four years along, over 800,000 construction workers have left the profession," said AGC CEO Stephen E. Sandherr. "Unless we find a way to prepare the next generation, we are going to get to a point in the near future when there aren't enough workers to meet demand on schedule or on budget."

Construction employment figures can be viewed by state or rank.

Complementing Resources

Simonson announced the workforce plan in Denver, CO. He noted that the proposal is designed to complement local workforce development programs like Denver's Workforce Initiative Now (WIN), a partnership by the Regional Transportation District (RTD), Community College of Denver, Denver Transit Partners, and the Urban League of the Metro Denver.

"WIN seeks to use existing training resources to identify, assess, train, and place community members into careers in transportation and mixed-use development projects, thereby growing the local workforce and strengthening the economy," said RTD general manager Phil Washington.

Simonson noted that the Union Station rehab and other major projects helped place the metro area among the top 10 (out of 339) nationwide for construction jobs added in the past year.

Denver added 3,600 new construction jobs between February 2013 and February 2014. The city has seen a 21 percent increase from its low point of 64,300 jobs in February 2011 to 77,500 in February 2014.


Tagged categories: Associated General Contractors (AGC); Construction; Economy; Hiring; Jobs; Labor; Program/Project Management; Worker training; Workers

Comment from Robert Bullard, (4/16/2014, 9:38 AM)

Not a word about what the unions are doing. It sounds like the AGC is the only game in town. Unbalanced journalism at its finest.

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