How bad is bad?

Industry observers conflicted
over labor shortage

Apprenticeships, training essential
no matter how shallow the pool

By Jeremy Harrell
Daily Reporter Staff

Construction industry observers throw around conflicting adjectives to describe the impending labor shortage.

Some consider the situation grave, others overblown, while still others think it's somewhere in between. Some believe the industry, as it's already started to do, will rise to the occasion and come up with creative ways to solve the problem; others think it's almost too late to do anything about it.

Sitting in the offices of the Department of Workforce Development in Madison, surrounded by graphs, charts and actuarial tables, Terry Ludeman uses "severe" when depicting the labor shortage's impact on the construction industry in Wisconsin.
Ludeman, the DWD's local work force planning section chief, is an economist by trade, but he said it's a mistake to gauge the state of the work force on whether the industry is running on all cylinders or experiencing a temporary downturn (as now appears to be the case). The real problem is that, very soon, Wisconsin won't have enough workers to fuel any economy demands, he said.

"For me, the economy will adjust itself to the labor shortage, but what we're looking at is a demographic change, not an economic change," Ludeman said. "We've never seen this type of development."

The development Ludeman refers to is Wisconsin's population growth, which lags far behind that of the rest of the country. The entire nation went through the baby boom in the 1950s and '60s, and most industries-including construction-swelled with workers in the late '70s and early '80s. Since then, however, Wisconsin's birthrate has sharply declined and the state hasn't captured its share of new workers immigrating to America.

"I think inevitably we’re going to hit this wall, and I don’t think the construction industry will be able to duck it." Terry Ludeman State Department of Workforce Development Local Workforce Planning Section Chief

By 2016, the number of people turning 65 in Wisconsin will surpass the number of people turning 18-the first time this will have ever happened, Ludeman said. Almost a quarter of the construction industry is set to retire in the next eight to 10 years, he said.

According to DWD labor market projections, the number of workers in the construction industry will grow from 112,530 in 1998 to 124,800 in 2008-based on normal, expected economic growth. What's more critical, however, is that in addition to finding 12,000 new workers to match fiscal expansion, the industry will have to fill more than 26,000 jobs left vacant by what Ludeman called "separations"-people who retire or leave construction for other jobs.

"I think inevitably we're going to hit this wall, and I don't think the construction industry will be able to duck it," Ludeman said. "The current economic slowdown is giving us a false impression and distracting us from the bigger picture."

No problem?

Not everyone shares Ludeman's dark view of the labor shortage. John Brukbacher, who directs the Southeast Wisconsin Carpenters Apprenticeship Committee, said his program has more than enough people to fill any conceivable shortage.

"I thought at one time there was going to be a severe shortage," he said. "Right now, I'd be out on a limb, but I don't see a tremendous lack of interest from people to get into our program."

There are 330 workers enrolled in Brukbacher's apprenticeship program, and there are 130 more who have met the minimum standards for apprenticeships and are waiting for contractors to take them on.

"I cannot see where the tremendous shortage is," Brukbacher said.

Jay Yunker, career development services director with the Associated General Contractors of Wisconsin, agreed with Ludeman's prediction that the industry will have a hard time dealing with the staggering number of retirements looming on the horizon. But he said he also thinks the industry, spurred by economic necessity, will respond with vigorous recruiting techniques and head off the labor shortage before it becomes catastrophic.

"There's definitely a need and shortage," Yunker said. "Is it going to get to a crisis stage? No, because people know it's here and the industry is already rising to meet the demands of the market."

Jim Macejkovic, executive vice president of Building Services Inc., a Milwaukee general contractor, said he's willing to meet the opposing viewpoints halfway.

"The truth is that the shortage is somewhere in between," he said. "My personal opinion is that specialty trades are going to feel a pinch. We won't feel it on big projects, but rather on the day-to-day jobs done by smaller general contractors. And that's the meat of the work out there."

Macejkovic estimated that carpenters, electricians and masons will have difficulty filling the expected shortfall of 36,000 jobs in those trades by 2008, but the rest of the industry should be OK.

"I'm expecting a minor shortage," he said. "But if we don't address it now, in a few years it may be too late. You've got to start training people and stocking up your work force."

News from the Capitol

Last year, a few legislators put their fingers to the wind and decided the prospect of a labor shortage was stark enough to warrant a special committee to investigate the problem. Rep. Jean Hundertmark, R-Clintonville, and Sen. Gary George, D-Milwaukee, formed the largest special committee in state history to define the labor shortage and seek legislative answers.

"Government is typically shortsighted about these things," Hundertmark said. "More communities are being asked to address problems like labor shortages, and now the state is doing that by looking 20 years into the future."

After recently concluding six months of meetings, the labor shortage committee issued a dozen legislative proposals-ranging from an apprenticeship tax credit proposal to a bill that would establish an annual labor market report. George and Hundertmark plan to attach the proposals to the state budget bill, and, failing that, Hundertmark said they would try to introduce the measures as stand-alone legislation.

Macejkovic served on the labor shortage committee and, along with fellow committee members Rep. Dan Vrakas, R-Hartland, and Sen. Richard Grobschmidt, D-South Milwaukee, pushed for the apprenticeship tax credit. Grobschmidt and Vrakas sponsored a similar bill in the last session, but at Macejkovic's urging, the committee added a few new provisions to the proposal.

In addition to offering a tax incentive to certain contractors who take on apprentices, the bill authorizes the DWD to provide grants to apprenticeship applicants who have failed entry tests. Macejkovic said the money could help potential apprentices study more in areas that proved troublesome in the test.

"We see a lot of kids who want to be apprentices, but they can't get past the test," he said. "Under the bill, if they fail, they can get a grant to help them pass."

New blood

Although construction minds disagree about the severity of the labor shortage, all agreed that the industry needs to focus its attention on apprenticeships and renew its emphasis on training.

"It's got to start from the top down," Macejkovic said. "A lot of supervisors came up through the ranks. A lot of them, however, don't want to turn around and train the kids and deal with apprentices. But they have to."

It's even more important to take on new apprentices now, Yunker said, because the best trainers are the same people who will soon be walking the grassy golf courses of retirement.

"As these mentors are aging and leaving, it's hurting the apprenticeship programs," he said.

Only 335 of the more than 15,000 construction companies in Wisconsin train more than two-thirds of the apprentices, Macejkovic said. And the shallowness of the labor pool will force the industry to look in places where it hasn't typically sought workers.

"You're already seeing more women in the trades," Macejkovic said. "We need to do a better job of attracting minorities to construction."

Contractors and union reps also need to take a more active role in recruiting students to the trades, said Ed Hayden, executive vice president of the Allied Construction Employers Association. High school guidance counselors continue to operate on the assumption that the only way to succeed in life is to get a college degree, even though construction is one of the highest-wage fields going.

"The old saying is that if you couldn't do anything else, you were doomed to a life in construction," Hayden said. "We're not appealing to our potential markets as we should. We have a heck of a story to tell in terms of economic well-being."

Associations, such as the AGC, provide schools with construction games and materials so youngsters get an early jump on thinking about the trades, Yunker said.

Brukbacher said his union makes regular appearances at job fairs, much to the success of the apprenticeship program.
But, as Macejkovic said, solutions to the labor shortage are almost as complex as the reasons for the worker shortfall itself.
"There isn't just one fix to this," he said. "If there was, we would have done it by now."

---

| Editor's Note | Story Index | Sites of Interest | Books | Main |

| Special Section Main | Daily Reporter Main |

Questions or help? Drop us a line

© 2000, Daily Reporter Publishing Company, All Rights Reserved.