Skilled-Labor Shortage Exacerbates Irma/Harvey Rebuild Difficulties
Qualified, Skilled Laborers Nowhere to be Found
There is a staggering shortage of skilled laborers in the construction/development trades. Contractors can not find laborers who can build competently. Equally alarming is how few workers are available to fill those open positions that do not require skills.
According to a Contruct-Ed article, because of the labor shortage, contractors are desperate. “One contractor says he’s thinking about offering $50 just to show up to the interview!” explains the Construct-Ed contributor who wrote We Get It. There’s a Trades Shortage. But Why? And What Now?
The skilled-labor shortage is even more evident in the Southern States. Devastated by hurricanes Irma, Harvey, and Maria, the South needs skilled laborers in the worst way.
Why Skilled Laborers Disappeared and to Where?
In a mass exodus, many skilled laborers abandoned the trades during the 2006-2011 recession. Over a five-to-seven-year period, skilled laborers suffered through the worst economic downturn since the 1980s. When housing-market bubble burst, work in the trades seemed to disappear overnight. Layoffs in the trades happened everywhere across the country. Layoffs were common for even highly-skilled laborers.
Quickly finding work to replace lost jobs, on the other hand, was very uncommon. So, skilled laborers found work in other industries. According to Construct-Ed, that is why the construction/development industries have such a problem now. “So many left the industry in 2008, there just aren’t as many professionals to do the work that’s available.”
Tradesmen International answers the question, Where Did All the Skilled Labor Go? While where the skilled labor went isn’t a mystery, if or when they will return to the trades is.
When — or Will — Skilled Labor Return to the Trades?
According to Tradesmen International, the skilled laborers who left the trades during the recession won’t return. At least, they won’t return to construction/development anytime soon. T.I. concludes, “[We] have likely only seen the beginning of the construction labor shortage.”
Tradesmen International explains, “From 2006 through 2011, the construction industry lost 2.3 million jobs. Additionally, there are about 1 million fewer residential-construction jobs to be had today than there were prior to 2006.”
But, the Bureau of Labor Statistics reports that there are more than 140,000 vacant construction positions nationwide. And, the National Association of Home Builders (NAHB) reports that almost 70% of its members have skilled labor shortages.
With so much work available, the assumption is that the trades will be able to lure skilled laborers back. With all these positions to fill, surely there are laborers who need the work.
Not the case according to T.I. Instead, those skilled laborers who found other work are staying pat. Those who left the trades are choosing to stay in their new professions. But, that isn’t the only issue. True, the skilled laborers who lost their jobs during the recession-weary of returning to construction and development. But equally as important, millennials are not interested in construction. filling those positions either.
According to a PeopleReady survey, job growth was at 1.6% in 2016, down from 2.3% in 2015. But in an odd paradox, job openings remain at record levels and have since 2014 according to PeopleReady.
No Millennials in Skilled Labor Sectors
Not only are those skilled laborers who left the industry not returning, no one is replacing them. “A whole generation of younger workers are no longer even considering construction as a viable career option. Many high schools have phased out shop classes and parents increasingly [steer] graduates to four-year colleges and white-collar careers. Now, as older workers are retiring, there simply isn’t anyone ready to take their spots,” explains T.I.
“The so-called silver tsunami of baby boomer retirements is starting to crash,” explains Fortune’s Todd Palmer.
At the end of 2016, the labor and skilled-labor shortage was already a huge concern. The Washington Post reports that “monthly job openings in the United States reached a record high this summer at 6.2 million.”
And that was before this year’s hurricane season, before the damage created by three historic hurricanes within a one-month period.
Skilled Labor Shortage Affecting Hurricane Rebuilds
The damage is incredible. Cost estimates to repair the damage done by Irma are anywhere from $50 billion to $100. That does not count Puerto Rico. The price to rebuild Coastal Texas is estimated to be twice that. According to Fortune Magazine, “That could make Hurricane Harvey the costliest weather disaster in U.S. history.”
Inflation-adjusted, Katrina caused roughly $160 billion worth of damage. The damage caused by Irma and Harvey could be twice that. And, that does not account for the damage done by Maria. Vox.com’s Alexia Campbell exaggerated the damage when writing, “All the relief money in the world won’t rebuild Houston.” But, the content of her column is legitimate. Without more laborers, repairing the damage done by Harvey will take far too long.
And Florida in the same boat. Without sufficient skilled labor to repair the destruction from the first month of hurricane season, it’s going to be difficult to argue that the south is getting any help.