Why is it so hard for supply to keep up with even diminished demand?
Some things are so counterintuitive, it’s a struggle
to explain them. For instance, we’re now three years into the Great Recession,
in which an estimated 8 million people have lost their jobs and countless
millions more are working part-time or underemployed. Yet at the same time,
reports keep popping up of labor shortages in construction and
About a year ago, Industrial Info Resources (IIR) cited 688 renewable energy
projects scheduled to begin construction in 2010 year across North America.
Some of those projects were delayed or cancelled for various reasons –
financing chief among them -- but others were held up due to a shortage of
skilled craft labor in some areas.
The media has been filled with reports recently about a coming revival of
nuclear power projects in the United States. Some 17 companies and consortia
are considering building more than 30 nuclear plants, and the U.S. Nuclear
Regulatory Commission is actively reviewing 13 license applications for 22
nukes. If those projects ever get off the drawing board, it’s doubtful there
will be enough skilled labor to pull them off in reasonable time. Fluor is one
of the contractors expected to build some of those new nukes. IIR cited a Fluor
procurement manager saying, “There’s not enough skilled labor in the market to
build more than a few reactors at the same time. When we have four active
[nuclear] projects under way at the same time, things will be interesting. I
expect that labor costs will go up, perhaps sharply, around
The temporary staffing agency Manpower Inc. for the last five years has
conducted an annual survey of tens of thousands of employers in 33 nations to
determine the extent to which talent shortages are impacting today’s labor
markets. Their latest effort in early 2010 found 31 percent of employers
worldwide reporting difficulty filling key positions within their organization.
The Skilled Trades category has topped the list each year of the
Also, the National Association of Manufacturers (NAM) has been beating the drum
for years about a shortage of skilled factory workers. Among NAM’s membership,
their average age is around 50, and 90 percent of NAM members say they can’t
find enough skilled production workers.
This comes as a stunning revelation to people who read almost every day about
factories laying off hundreds or thousands of people. How can manufacturers be
shedding jobs all over the map, yet suffer a labor
Upon further reflection, the discrepancy is not so mysterious. This is skilled
labor we’re talking about. Many of the jobs that still exist in manufacturing
are far removed from the assembly line tasks of the past that could be learned
in a day. Many of today’s production workers have to know how to operate
sophisticated computerized machinery, and it takes highly trained technicians
to maintain and troubleshoot that equipment.
Likewise, it takes years to fully train skilled construction craft workers. The
best craft training traditionally has come out of the construction unions, but
the unions are starkly diminished in numbers from what they used to be, and
they are careful to calibrate their apprentices with the amount of work
available. It wouldn’t make sense for them to train more journeymen than their
contractors can employ, so in a dismal economy like this, apprenticeship ranks
diminish. Nonunion and company apprenticeship programs have even less incentive
to expand enrollment in a down economy. Some short-shrift the process, and end
up producing task workers rather than full-fledged journeymen.
Anecdotally, I keep hearing of construction apprenticeship programs attracting
older and college-educated people. This is because we’re in an era when many
white collar workers have been laid off from well-paying jobs, and the trades
give them the best chance of recapturing their former earning power. But again,
while this may boost the caliber of apprentices, until the economy improves,
the number people being trained is likely to be far less than the industry
needs to sustain another boom. When the market finally does recover, the
construction skilled labor shortage is likely to get worse before it gets
The Fabricators and Manufacturers Association, along with its colorfully named
Nuts, Bolts & Thingamajigs Foundation (NBTF), places some of the blame for
skilled labor shortages on a society detached from its blue-collar roots. A
recent poll sponsored by NBTF showed a majority of teens – 52 percent – have
little or no interest in a manufacturing career, and another 21 percent are
ambivalent. When asked why, a whopping 61 percent said they seek a professional
career, far surpassing other issues such as pay (17%), career growth (15%) and
physical work (14%).
A major reason that kids don’t pursue careers in the skilled trades is the
simple fact they are not introduced to them anymore. In the past, high school
students could take a shop class and get a feel for working with tools, but
today most don’t have that chance.
Also, the old stereotypes of backbreaking labor and grimy working conditions in
factories persist, even though most factories today are far cleaner, safer and
more automated than in the bad old days.
The same NBTF poll revealed that America has become a nation of
“non-tinkerers,” with 60 percent of adults avoiding major household repairs.
And, 57 percent state they have average or below average skills at fixing
things around the house.
This means young people essentially have no role models when it comes to
repairing things themselves or taking pride in building something useful. Also,
computer games have replaced Tinkertoys and erector sets as their favorite
things to find under the Christmas tree.
All of these factors make it a daunting task for manufacturing and trade recruiters
to replenish ranks and staff up for better times to come. But they can’t give
up. There may be only one thing in their favor, but it’s a big
That’s the fact that the trades are indispensable to our society, and offer
jobs with great pay and benefits (usually). While job opportunities always
fluctuate wildly depending on the state of the economy, they never will dry up
completely, nor can they be outsourced overseas.
That’s your story. Stick to it, and shout it from the rooftops.
Smart Business: Skilled Labor Still in Short Supply
February 1, 2011