March 2014, Vol. 69 No. 3
Editor's Log
Editor's Log: Labor: Inhibitor To Growth?
People get old. People get disinterested, want to come home at night after a day’s work or simply believe they are entitled to an air conditioned and heated job environment. People just don’t find the working in the construction market appealing. For whatever the reason, the underground construction market is increasingly feeling the pinch of a limited labor pool.
The oil and gas pipeline market segment has been feeling the effects of a limited labor force for years. When pipeline construction was in an historic down cycle, concerns were minor. But when integrity management regulations were implemented, it naturally generated significant work. Industry was strained but could generally find and/or train a qualified workforce. Shale changed all that. The mandated integrity management protocols will continue and the prolonged boom in the oil and gas transmission pipeline construction rolls on. Now, the severe lack of skilled and qualified labor has proven an inhibitor to expansion.
There was an unofficial, collective sigh of relief from many when it became apparent that, at least for the time being, the Alaska Pipeline was not needed due to the boom in shale gas production in the lower 48. Before that, there was legitimate concern that the pipeline labor force could not handle both the Alaska and continental U.S. pipeline construction – too many projects and not enough workers.
Union pipeline contractors have traditionally depended upon Union Shops to meet their labor demands when they are gearing up for major projects. Now, unions are struggling to meet contractor labor requirements. But both non-union and union contractors increasingly find they must identify and train their own personnel as the older, reliable sources of obtaining laborers have dramatically decreased or dried up entirely. Union Shops scramble to attract workers to a career in pipelining and non-union pipeline contractors also find that their worker pool of qualified welders and laborers has been absorbed by other industries or the workers have sought less trying jobs.
Labor shortages are not limited to oil and gas transmission pipelines. Gas distribution contractors can usually offer a regular paycheck and excellent benefits year round. But working out in the elements and making a career in the construction market simply doesn’t have the appeal that it had 20 or 30 years ago. Integrity management demands have kept distribution contractors busy to the point that they are generally looking for labor. Now, as new construction begins to ramp up, some local distribution companies have expressed concern that there is enough labor to continue both the integrity management efforts when construction needs are added.
In the finite universe of horizontal directional drilling, finding and retaining skilled drillers is a constant struggle with workers frequently receiving higher offers from competitive companies. Those contractors too are looking for ways to train, develop – and retain – qualified drillers.
Sewer, water, telecom and electric contractors are not exempt as they also find acquiring skilled labor an increasing challenge. Those contractors too complain that a lack of labor has become a major barrier to growth.
To some degree the Hispanic immigrant workforce has been the savior of the construction market. But as more than one contractor has pointed out, cultural differences and language challenges can be difficult to navigate. The paperwork trail now required to document a worker’s eligibility has also driven away potential hires.
In Underground Construction’s latest municipal survey, cities are expressing similar concerns. Labor was cited frequently as a major problem for sewer and water managers. They see their workforce aging, retiring and not having qualified people available to replace them. Thus, valuable job experience is disappearing and there aren’t adequate personnel to train and impart knowledge upon.
We hear this story time and again: the digital age has also brought a fundamental shift in the work habits and interests of young people entering the workforce. In some ways, the Great Recession served as motivator for many people. Trying life in the construction market was much more palatable if it enabled one to pay the rent and eat. Still, many government programs make it too easy for people to hold out for “something better” than to get their hands dirty. Our society has become too cool for manual labor in the great outdoors.
There are many programs in place to attract students and young people into our markets. Frequently we learn of new, innovative ideas to appeal to workers. All help but no program has yet to fully address the problem.
So where does our labor force come from in the future? That’s the question virtually every contractor, association, engineering company and now even owning companies is asking. History shows that Irish immigrants built the New Orleans levee system, Chinese immigrants much of the western U.S. railroads and other immigrant groups contributed mightily to building America. Will Hispanic immigrants build our underground infrastructure? Or will labor solutions materialize elsewhere?
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