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NEWSLETTER

November 2nd, 2023

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This week we will be discussing the labor shortage in the USA!

The construction labor shortage is having a significant impact on the market. With fewer skilled workers available, construction projects are facing delays and increased costs. This shortage is particularly evident in the housing sector, where the demand for new homes is high but the supply is limited. As a result, home prices have been rising, making it more difficult for potential buyers to enter the market. Additionally, the shortage is also affecting infrastructure projects, such as roads and bridges, which are crucial for economic growth. Delays in these projects can hinder productivity and limit job creation. Overall, the construction labor shortage is creating challenges for the market, leading to higher costs, reduced supply, and slower economic growth.

The average age of construction workers in America varies depending on the specific region and sector of the industry. However, in general, the construction workforce tends to be older compared to other industries. According to data from the Bureau of Labor Statistics, the median age of construction workers in 2020 was 42.7 years old. This can be attributed to several factors, including the physical demands of the job and the lack of younger individuals entering the construction field. Additionally, many experienced workers choose to remain in the industry due to the potential for higher wages and job stability. As the construction industry continues to evolve and adapt, efforts are being made to attract younger workers and address the aging workforce challenge.

An aging construction labor population combined with a labor shortage can have a significant impact on the craftsmanship of future projects. As the construction labor force ages, there may be a decline in the availability of experienced and skilled workers. This can result in a lack of expertise and knowledge being passed down to younger generations, leading to a potential decline in craftsmanship. Additionally, the labor shortage can further exacerbate this issue by limiting the number of workers available to complete projects. With fewer workers, there may be increased pressure to complete projects quickly, potentially compromising the attention to detail and quality of workmanship. Overall, the combination of an aging labor population and a labor shortage can pose challenges to maintaining high levels of craftsmanship in future construction projects.

Do we have hope in the trade schools? How are the trade schools doing on enrollment number?

Enrollments in skill-based trade schools, such as those offering programs for welders, masons, HVAC technicians, electricians, and plumbers, have been experiencing varying trends. In recent years, there has been a growing demand for skilled tradespeople due to factors such as an aging workforce, increased construction and infrastructure projects, and a shift towards vocational education. As a result, enrollments in these trade schools have generally been on the rise. Many individuals are recognizing the potential for stable and well-paying careers in these fields, leading to increased interest and enrollment in programs that provide the necessary skills and certifications. Additionally, the emphasis on hands-on training and practical experience offered by trade schools appeals to those seeking a more direct path to employment. However, it is important to note that the demand for specific trades may vary regionally, and economic factors can also influence enrollments in these programs. Overall, the enrollments in skill-based trade schools for welders, masons, HVAC technicians, electricians, and plumbers have been generally positive, reflecting the growing recognition of the value and opportunities provided by these trades.

In the future, it could become increasingly difficult to find a basic plumber for a broken faucet or an HVAC installer for an AC tune-up before summer. This could be attributed to several factors. Firstly, as technology advances, there may be a shift towards more complex and automated plumbing and HVAC systems, reducing the need for traditional plumbers and installers. Additionally, the younger generation might be less inclined to pursue careers in these trades, opting for more technologically-focused professions. This could result in a shortage of skilled workers in these fields. Moreover, as the population continues to grow, the demand for plumbing and HVAC services may increase, further exacerbating the scarcity of available professionals. Consequently, individuals with minor issues like a broken faucet or the need for an AC tune-up may struggle to find someone willing and available to address their needs promptly.

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The future of trade workers could potentially see a significant jump in wages due to several reasons. Firstly, there is a growing demand for skilled trade workers in various industries such as construction, manufacturing, and infrastructure development. As the global economy continues to expand, there will be a need for more trade workers to meet the increasing demand for infrastructure projects. This high demand coupled with a limited supply of skilled trade workers could lead to a rise in wages as employers compete to attract and retain talent. Additionally, advancements in technology and automation are changing the nature of trade work, requiring workers to possess more specialized skills. This increased complexity and expertise could also contribute to higher wages for trade workers. Furthermore, as the cost of living continues to rise, trade workers may demand higher wages to maintain a decent standard of living. Overall, the future of trade workers looks promising in terms of potential wage increases due to the growing demand, evolving skill requirements, and economic factors.

Both UPS wages and GM auto manufacturers' wages have experienced a notable increase this year after deal was reached. UPS, one of the largest package delivery companies, has seen a rise in wages as they strive to attract and retain employees in a competitive labor market. This increase in wages is a response to the growing demand for delivery services, particularly due to the surge in e-commerce during the pandemic. Similarly, auto manufacturers have also raised wages to address labor shortages and ensure a skilled workforce. As the automotive industry rebounds from the impact of the global health crisis, manufacturers are offering higher wages to attract workers and meet the rising demand for vehicles. One must ask when does the wage bump come to construction? My guess is 10-15 years still due to the housing correction that we are witnessing.

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See you next week when we do a glance at what is happening in the the housing market closing out of 2023!