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 eight million people have lost their jobs and countless millions more are working part-time or are underemployed. Yet at the same time, reports keep popping up of labor shortages in construction and manufacturing.

Early last year Industrial Info Resources (IIR) cited a number of major green energy projects being held up due to a shortage of skilled craft labor. These included concentrated solar power projects, which have extensive piping requirements to carry gases or heated steam to and from the solar arrays. Concerns also have mounted about the ability to staff all the new nuclear power projects in the planning stage, if they ever come about. 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 2014.”

The temporary staffing agency Manpower Inc. conducts an annual survey about labor market shortages. The Skilled Trades category has topped the list each year of the survey.

Also, the National Association of Manufacturers has been beating the drum for years about a shortage of skilled factory workers. This comes as a brain warp 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 shortage?

Upon further reflection, the discrepancy is not so mysterious. This is skilled labor we’re talking about. Most 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 United Association, to its credit, has been aggressive in its efforts to recruit military veterans, women and minorities into the pipe trades. This is encouraging, except when you look at the big picture, these efforts appear more as a trickle than a flood.

That’s because the UA unions are careful to calibrate their apprenticeship ranks 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 apprentices in training diminish. Nonunion 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 pipe trades 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 recouping their former earning power. But again, while this may boost the caliber of apprentices, until the economy improves the number of people being trained is likely to be far less than the industry needs to sustain another boom.

The Fabricators and Manufacturers Association, along with its colorfully named Nuts, Bolts & Thingamajigs Foundation, places some of the blame for skilled labor shortages on a society detached from its blue-collar roots. One recent NBTF poll revealed that America has become a nation of “nontinkerers,” 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 tinker toys and erector sets as the favorite things for youngsters to find under the Christmas tree.

All of these factors make it a daunting task for industry 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 thing.

That’s the fact that the pipe 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 will never dry up completely, nor can they be outsourced overseas.

That’s your story. Stick to it, and shout it from the rooftops.

Links