In May, construction spending topped out at 1.143 trillion dollars. While the construction industry is seeing growth, contractors are beginning to have a hard time finding qualified workers. While spending appears to have dipped slightly during May, there is huge growth across the board from 2015.
With good news comes good problems. Times of growth can be dangerous as there are risks in a growing market. In order to sustain it, growth must be responsible. In a recent survey by the Associated General Contractors of America (AGC), almost two-thirds stated they are struggling to hire qualified laborers at the rate of growth. To combat this, the AGC has urged Congress to renew the Perkins Act, among other legislative remedies, to boost the construction workforce. In the eight years leading up to 2015, federal funding for career and technical programs dropped 29 percent. This drop resulted in insufficient funding for operations and an inability to acquire the equipment necessary to train workers.
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Following 2006, the construction industry faced a downturn and saw huge layoffs resulting in fewer qualified workers looking to enter the industry. In recent years, the trend has reversed and construction spending has shot up. However, when interest in construction jobs dropped, the secondary education programs that prepared workers for a career in construction also suffered. The growing demand for projects can only be satisfied as long as there are skilled workers for contractors to hire. If contractors are unable to hire at a pace to support this growth, construction delays will ensue and undermine the recent surge. With strong growth in the construction industry, it is time to rebuild those programs to fulfill the hiring needs of contractors.
Here are some of the options to help grow the construction workforce that have been proposed by the Associated General Contractors Workforce Development Plan.
Renewing the Perkins Act
The Perkins Act provides funding for programs that teach career and technical skills. One of the most important trades that falls under the Act is construction. The CEO of AGC calls for a new iteration of the Perkins act that increases funding and allows school officials to better accommodate the needs of the industries they serve. In particular, the association has been pushing for legislation as a part of their Workforce Development plan. They hope to draw students by promoting education on in-demand skills that can result in high earning potential.
Implementation the Workforce Innovation and Opportunity Act (WIOA)
The Workforce Innovation and Opportunity Act helps job seekers succeed in finding jobs and to match the labor market with the skilled workers they need. The Act seeks to align the workforce with the needs of employers in their market, contributing to economic growth. Signed into law by President Obama in 2014, the law went into effect in July 2015. Implementation was set to begin on July 1, 2016.
The AGC calls for immigration reform, creating a path to legal status for the millions of undocumented workers participating in the construction industry. With such reform, more construction laborers could enter the country and fulfill the needs of contractors.
Expanding Antitrust Exemption
Antitrust laws are in place to protect consumers from businesses banding together to harm them. These laws sometimes prohibit partnerships that may be necessary for an industry to exist. The AGC would ask that Congress provide extend their antitrust exemption to allow open shop contractors to create deals in order to fund craft training programs. Should open-shop contractors be allowed to work together to fund these programs, the industry could self-fund the education required to prepare workers and alleviate the public.