Michigan Labor Shortage Could Affect Road Construction
Some Experts Argue a Lack of Skilled Workers Will Slow Down Improvements to Infrastructure, Others Are Not So Sure
Lansing (Great Lakes News) - How do you fix the damn roads without enough enough damn workers? And how much could these damn workers potentially cost? Michigan is losing skilled laborers at a high rate due to an aging population and lack of interest in the skilled trades, complicating dreams for drastic improvements to infrastructure.
Michigan is expecting more from skilled laborers as they continue to lose them.
Most Michigander’s agree that their roads need fixing. A report in May from the Transportation Asset Management Council showed that roughly 41 percent of Michigan roads are “poor,” and Governor Gretchen Whitmer rode her slogan “fix the damn roads” to victory in 2018. That same year, the Detroit Free Press published a poll showing that Michigan residents valued improvements to infrastructure above any other issue. Now in 2019, Republicans are wrestling to find a solution to Michigan’s road problems without agreeing to Whitmer’s proposed 45 cent gas tax hike. Some are arguing that, in its current state, the road construction business could not take much more work.
“Our transportation committee held 12 hearings specifically about road building this winter and spring,” said Rep. Jack O’Malley chair of the Michigan House Transportation Committee. “And we talked to the public the private sector. One of the questions I asked, and this was to an MDOT official, was ‘Is there enough work force?.’ And the answer was ‘no.’ But he went on to say: ‘It’ll take time, but we can train them and educate them to get the job done.”
Some county road commissions also claim that there is a labor shortage among road construction workers.
“I believe there is a huge labor shortage as well as contractor shortage,” said Steve Leonard at the Lake County Road Commision.
“They just see things through their goggles,” said Ken Bertolini, Director of Workforce Development at The Michigan Infrastructure and Transportation Association (MITA). “A lot of the counties want to take over their own construction. So, it’s almost in their best interest at times to say ‘there isn’t enough people out there so we need more funding.’”
MITA is a Michigan based trade association that represents over 500 companies in construction disciplines such as road and bridge, sewer and water, utility, railroad, excavation and specialty construction. They argue that the labor shortage among road construction workers does not exist. A large portion of the workers in the road construction business are seasonal, and because of that they spend a few months of the year laid off. This prevents construction companies from hiring en masse.
“We do have enough people, we just can’t automatically go out and hire a bunch of new people because we are also very seasonal,” Bertolini said. “We work a lot during the summer, and then a lot of our people are laid off during the slow points. So they may be off a month or two.”
MITA claims that the real issue is not numbers, but the manner in which contracts are negotiated between large companies and county road commissions. Most local contracts are short and have a short time frame in which they can be completed, which can tie the hands of large contractors who would otherwise be able to take the contract.
“There are a lot of projects out there that are large. I-75 for example. That has to happen, it has to start at a specific time and be completed by a certain time,” Bertolini said. ”But then there's a number of both smaller M-Dot projects and county projects that don’t necessarily need to start at a particular time or end at a particular time. They just need to be done by the end of a season.”
While the smaller projects might not be on a time crunch, MITA claims counties come to the negotiation table demanding a strict timeline.
“We’re talking currently with M-DOT and our members have said: ‘MDOT give us the opportunity to bid on those smaller projects by giving us a window of opportunity,’” Bertolini said. “Because if I was on a huge I-75 project and there’s a seven day county project or smaller MDOT project out there but it falls in the confines of my I-75 project I can’t bid on it. But, if you allow us to have a window that we could fit it in, and get it maybe towards the end of the project or before it, if you give us that opportunity then we will be available.”
While MITA might argue that there is no shortage of road workers, there seems to be a shortage of skilled trades workers. Demographic statistics show that industries all over Michigan and the United States are searching for employees that are becoming less common.
“The challenge in all occupations now in Michigan is more demographic than economic,” said Lou Glazer, president and co-founder of Michigan Future, Inc. “We got more people aging out of the labor market then are coming into the labor market.”
Michigan has the highest ratio of boomers to millenials out of any state in the union, and as boomers age out of the workforce millennials have failed to replace them. While this is a nationwide issue, Michigan is being hit particularly hard.
“89% of Michigan residents live in a county that, in the last ten years, lost prime working age people ages 25-54,” said Steve Tobocman, former Democtratic lawmaker and director of Global Detroit. “It’s estimated that by 2037, two thirds of all American counties will have fewer prime age working people than in 1997.”
The prime age workers who are aging out of the workforce happen to be those most needed right now for infrastructural improvements.
“One of the biggest and most obvious costs is this skill labor shortage,” Tobocman said. “We’re seeing 10,000 Americans retire every single day right now, and a lot of them are those who have gone out and learned those trades. They are our welders and road builders.”
“I think it’s common sense to realize that right now as a whole, our country is short on workforce,” O’Malley said. “Everybody’s got signs out that are saying: help wanted.”
Labor shortages are often accompanied by economic indicators, especially wage increases to attract more workers. Most of the industries affected by this shrinking number of workers are not raising their wages in a radical manner.
“Economists by and large believe that you cannot have a shortage unless the price is going up,” Glazer said. “In this case price is wage, because the price is what balances supply and demand. In almost all of these occupations wages are not going up or they are going up really slowly. If there were shortages there really should be really much higher wage increases.”
Glazer argues that part of the reason that many believe there is a shortage is because most companies are unwilling to offer jobs for their actual market value. If further economic incentives present themselves the market will adjust accordingly.
“Even if it is a problem, that problem is a short term problem,” Glazer said. “If we know anything, it's that markets fill up to meet demand. You have to believe that a market economy does not work to believe that if there’s business out there there’s not going to be any enterprise able to take advantage of the business. It would pull in more contractors. Both of the existing and additional contractors would do what’s necessary to get the business, part of that would be raising wages and actively getting more actively involved in training the people they need.”
MITA claims that if a large amount of funding was granted for road construction, not only would the market adjust but overall prices for contracts would go down.
“It’s simple supply and demand,” Bertolini said. “If there is more money out there the prices will not increase, because there will be more people bidding on those projects. And we may get some people who come from out of state as well that join our forces because they see that money. You’re going to get a few companies that come from out of state and some really good medium sized companies and push them into road construction because now it’s viable.”
While there may be a shortage among skilled laborers, a willingness to train and a commitment to higher pay could attract the needed workforce. The Michigan Department of Talent and Economic Development started the Marshall Plan for Talent during the Snyder administration and have been hard at work making skilled labor jobs more attractive. Ultimately, these changes will take time.
“This isn’t going to be a quick fix,” O’Malley said. “It’s going to take time to get workers here and it might not happen as fast as people expect.”
While this may make it difficult to significantly improve Michigan’s roads in the governor’s ten year timeline, O’Malley believes it will happen.
“I’ve talked to people and in hearings and those engineers have told me that 10 years is optimistic, it might be 15,” O’Malley said. ““I am a firm believer that we got so focused on college that we have forgotten the trades. And under Gov. Snyder I think that’s started to swing back.”
“Doctors and Lawyers need plumbers too.”