Worcester Business Journal

10 Worcester Business Journal | September 17, 2018 | wbjournal.com Massachusetts has the largest construction worker shortage in the nation HELP NEEDED BY GRANT WELKER Worcester Business Journal News Editor I f home prices are spiking because of low supply and high demand, construction firms seemingly can take advantage of a large market opportunity by ramping up their new home construction If it were only that simple. With the Massachusetts unemploy- ment rate at just 3.6 percent in July, con- struction firms simply can't find enough workers. Nowhere is the shortage more severe than in Massachusetts. Around 43 percent of construction jobs posted last year in Massachusetts remained unfilled aer 45 days, accord- ing to BuildZoom, a website helping people find contractors. e national average was just 39 percent. e number of construction workers in Massachusetts shrunk by 7 percent from 2005 to 2016, BuildZoom reported, while the overall Massachusetts work- force grew by nearly 8 percent during that time, according to Bureau of Labor Statistics data. "e No. 1 reason was the recession," said Paul Emrath, an economist for the Washington-based National Associa- tion of Home Builders. "It discouraged people and scared them away." During the Great Recession, work- ers in the construction industry were among the hardest hit, as capital dried up for new construction projects and firms were forced to cut costs. Construc- tion is among the last industries yet to recover its employment levels from prior to the Great Recession. "It's hard to track where they went and exactly why they're not coming back," Emrath added. Whatever the reason, Massachusetts has potentially suffered the most. Issi Romam, an economist who wrote the BuildZoom report and a fellow at the University of California Berkeley, said in Massachusetts and particularly the Boston area the effect is also the cause: fewer people may be going into construction work in high-priced areas where labor markets are already tight because they may seek higher-earning work. High prices in and around Boston in particular are, in part, due to a longterm trend of not building enough homes, Romam said. "It's been decades in the making," he said. Smaller, older workforce Construction-industry leaders are working to pitch the field to prospective workers by mentioning its relatively high pay without needing a college degree. Construction workers in Greater Worcester make $48,930 a year on average, according to the Bureau of Labor Statistics. Officials also work to publicize areas where wages are higher, or show high- er-ups in the field almost always have a background in the trades, indicating workers have a pathway toward more responsibility and better pay. But worker shortages have only wors- ened in the past year, according to the National Association of Home Builders. Worker gaps are most severe for car- penters and framing crews but are also severe for electricians and roofers. e gap is widest for subcontractors, who aren't as likely to show up in commonly cited labor statistics as no longer work- ing in the field, Emrath said. Construction relies on immigrant labor, a factor Emrath and Romam said can't be relied upon in today's political climate. It also isn't just a matter of workers who've le. According to BuildZoom, the share of construction workers who are under 25 has shrunk nationwide since 2000. In Massachusetts, those youngest workers made up 12.4 percent of the field in 2005. Now, it's 9.9 percent. "It's a very difficult problem attracting people to manual labor, to blue collar work, these days," Romam said. e Massachusetts Building Trades Council, which represents more than 75,000 workers, has not had to curtail any construction projects because of worker shortages but has noticed a dif- ficulty in more recent years as construc- tion activity has remained high, said Frank Callahan, the council's president. "It's becoming more difficult, but we haven't reached a situation where we haven't been able to staff a job," Callahan said. Another union labor leader, Worcester-Fitchburg Building Trades Council President Brian Brousseau, said his members have been able to meet demand. He portrayed the shortage as one stemming from less- attractive non-union positions. "It's not surprising that people don't want to do dangerous non-union work for sub-par compensation, especially given the millions of dollars in wage the that occurs on non-union construction sites," Brousseau said. "If builders or contractors are struggling to find workers, they should call us." No workers, no construction e Federal Reserve Bank of Kansas City estimated last year a gap of 6.9 million homes between what has been built for new homes since 2000 and what should have been, based on the needs of a growing population. at gap represents 5.8 percent of the national housing stock, the report said. Increasing sale prices and rents will likely spur further growth in the short The average cost of a newly constructed home in the U.S. has risen 13 percent since 2013. New homes are more likely to be in upper price ranges. Source: National Association of Home Builders Expensive homes 0 5% 10% 15% 20% 25% 30% 35% $100,000- $149,000 $150,000- $249,000 $250,000- $349,000 $350,000- $499,000 $500,000- $999,000 $1 million and over 2013 '17 PHOTO/FILE Construction work being done last year at the $160-million Apex Center in Marlborough.

• Cover