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VOL. 133 | NO. 157 | Thursday, August 9, 2018

Lack of Young Employees Hurting Construction

By Patrick Lantrip

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Issi Romem

The epidemic diminishing of the construction workforce in a post-recession world is primarily fueled by a sharp decline in the number of young construction workers, according to research conducted by BuildZoom’s chief economist Issi Romem.

In his study, “The Scar from Which the Construction Workforce Has Yet to Recover,” Romem outlines the correlation between states that were hardest hit by last decade’s housing market collapse and the lack of young talent entering the industry.

“Places where home prices fell more during the bust years saw a greater percentage drops in their share of young construction workers,” Romem said.

As a result, while the construction employment rates have recovered to pre-bust levels, the overall size of the construction workforce has diminished, both nationally and in most states, Romem maintains.

He said that while there is no obvious answer, one reason behind this is that formal training required in the construction trades is harder to come by today than it was before the housing bust.

“There are a few very large construction companies, and there’s a very long tail of smaller firms,” Romen said. “For smaller firms, it’s hard to put together that kind of training. First of all, you need the people, and the manpower, and the budget to do it. Aside from that, you need some confidence that those workers who you spend a lot of resources to train will remain with you for at least some period.”

This can be a lot to ask of a worker and a small company, he said, because workers, especially younger workers, tend to move jobs a lot.

“If you’re a small company, you’re likely to lose those workers that you train. It doesn’t make much sense to look for untrained workers and train them,” Romem said. “It makes more sense to look for trained workers.”

To alleviate this, other organizations such as labor unions, different trade associations, local governments, and nonprofit need to come into play to produce more apprenticeship programs and lift this burden off of the small businesses.

Another issue he noted was the perception of the industry as a type of blue-collar work that young people aren’t interested in.

He said that this produces a separate set of problems, which he doesn’t necessarily have a perfect solution to, but that there are other ways to sate these numbers.

“One of them is to import construction labor, bringing folks over from other countries who are skilled in these lines of work,” Romem said. “In this day and age that doesn’t seem a politically feasible thing to do. The general tendency right now… is for the government to work against the entrance of large numbers of less-educated immigrants. Trying to bring in large pools of that kind of immigrant seems to run against the grain today.”

As for Tennessee’s fate in his state-by-state study, Romem said it was “middle of the pack,” as his data on the Volunteer State as a whole seems to be not as hard hit as other places in terms of the loss of young workers.

“Now whether that’s because there’s been more growth in Tennessee than elsewhere, and population growth in general is masking the shrinkage of young workers in the industry the way that’s happening in Texas, or whether Tennessee just wasn’t that hard hit is not obvious from just looking at this,” Romen said. “My guess is it’s probably more of the latter.”

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 92 158 13,600
MORTGAGES 89 165 15,731
FORECLOSURE NOTICES 10 21 2,160
BUILDING PERMITS 250 250 28,008
BANKRUPTCIES 54 121 8,771
BUSINESS LICENSES 33 54 4,619
UTILITY CONNECTIONS 28 60 5,453
MARRIAGE LICENSES 20 48 2,942

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