A Look at Labor

Help Wanted Signs Hanging
In Some Midwestern Cities

by Craig Barner

Some construction executives in the Midwest are worried about the availability of skilled labor even though starts in 2007 are settling
after years of strong growth.

advertisement

Commercial construction projects under way are numerous and picking up the slack from the softening demand in residential. Megaprojects abound and are keeping workers and supervisors busy in the field.

Moreover, the strain on labor could intensify if other major projects are suddenly announced as expected and as efforts ramp up to rebuild the Gulf Coast in the wake of hurricanes Katrina and Rita in 2005.

Help wanted signs are likely being seen or are expected to be seen in some locales and are definitely hanging in one major metropolitan region where Midwest Construction circulates: Indianapolis.

A report released in December 2005 by the Indianapolis-based Indiana Construction Roundtable, an organization of construction buyers, projected a labor shortage due in part to the large number megaprojects and overall vibrant construction activity in the Central Indiana city. The report, "The 2005 Craft Labor Study," had warned of a shortfall of 1,450 skilled construction workers by 2008.

"To be honest, that sounds really light to me," says Gary Price, president of ICR. "In the interim [since the study was done], several projects of an extraordinary nature have started. We would anticipate that the shortages will that were predicted to escalate."

Among the biggest projects under way are the approximately $1 billion upgrade of the Indianapolis International Airport; the $675 million Lucas Oil Stadium project with $275 million expansion of the adjoining Indiana Convention Center; and two Eli Lilly and Co. projects, a $311 million manufacturing plant and a $200 million research laboratory.

Pipefitting is experiencing particularly critical shortages due in part to projects at Lilly, several ethanol plants and a BP petroleum facility in Northwest Indiana.

An updated ICR labor study is being done, and it will survey the labor situation statewide, rather then in just Indianapolis.

In the meantime, employers in Indiana are tapping itinerant construction workers-frequently known as "travelers"-to shore up the labor supply, though this is seen as a stopgap measure.

"ICR owners have expressed their preference that those jobs be handled by Indiana workers," Price says.

St. Louis Labor Shortage Blues

Indianapolis is not the only Midwest city with labor concerns.

Executives in St. Louis are also finding the labor situation tight, though no verifiable data exists.

"We are anticipating shortages," says Art Buckowitz, superintendent of construction services for St. Louis-based Ameren Generation, Construction & Management, the building arm for utility firm Ameren, and chairman of the St. Louis Council of Construction Consumers. "We're seeing a lot of owners with a lot of projects."

He pointed to the $900 million cement plant that Waltham, Mass.-based Holcim (US) Inc. is building in St. Genevieve County south of St. Louis; two casino/hotels-a $430 million facility downtown and a $375 million project in suburban Lemay-that Las Vegas-based Pinnacle Entertainment Inc. is building; and the $200 Pfizer Inc. expansion in suburban Chesterfield. There also are major expansions in the region expected at Chrysler Corp. and ConocoPhillips facilities.

Echoing these concerns is Greg Kozicz, president of St. Louis-based Alberici Corp., a general contractor.

"If you spoke with the unions, you'd find almost all of the trades are at or near full employment," he says.

The SLCCC is surveying owners in the Gateway City to project the demand for labor and compare that figure to the existing labor pool, Buckowitz says. If an insufficient amount of labor is found, efforts will be introduced to increase the labor supply. In the meantime, St. Louis is mirroring Indianapolis with travelers being hired.

29,000 Workers Needed?

No major labor shortages are currently being experienced in Chicago and Milwaukee, but that could change because demand is expected to intensify, according to sources.

Lyle Balistreri, president of the Milwaukee Building and Construction Trades Council, an affiliate of the Washington, D.C.-based Building & Construction Trades Department of the AFL-CIO, says power plant and similar industrial work was a focus at the organization's Midwest Regional Meeting.

An estimate was that 29,000 new workers would be needed to fill the number of jobs expected, he says. Intense demand is expected for boilermakers, steamfitters, electricians, ironworkers and other skilled construction trades.

"People have to ask themselves a question," Balistreri says. "Is the traditional way we recruit and build our membership able to deliver the workers to the workplace?

"If some of the projections being thrown out are near real, there are going to be severe shortages."

In Wisconsin alone, power plant work is booming, including at the $2.3 billion Oak Green Generating Station expansion south of Milwaukee, the $752 million Weston Power Plant Unit 4 project near Wausau and the $660 million Port Washington Generation Station expansion north of Milwaukee. Pipeline and ethanol facilities are also being built in the state.

Coming in Southern Illinois, the billion-dollar Prairie State Energy Campus in Lively Grove has received permits, and planning is under way for a major coal plant in Washington County. Generators all over the Midwest are installing scrubbers and selective catalytic reduction units to reduce emissions.

Competition could intensify for workers who can perform this work. In January, Irving, Texas-based Fluor Corp. announced that it planned to hire 800 to 1,000 workers in Houston due to contracts with clients in the chemical, oil and gas industries, and Midwest workers could be lured there.

"I think you're going to see shortages in areas where you need guys with high skills," Balistreri adds.

And, the strain could increase as efforts ramp up to rebuild the Gulf Coast.

Frank O'Lone, secretary-treasurer of the Chicago & Cook County Building & Construction Trades Council, says the organization's membership has received requests for workers. Initially, they were needed to remove debris and set up kitchens for food distribution but not to perform skilled labor.

"Now, we're getting calls weekly from [charity] organizations for skilled workers," he says.

Enticing Teens, Minorities

A number of initiatives are under way to ensure a steady supply of workers in the future.

For instance, the ACE Mentoring Program, a program to entice teenagers into careers in construction, is growing, says Pamela Mullender, executive director of the Stamford, Conn.-based organization.

About 7,500 students in 90 cities are involved nationwide in ACE, which introduces students to careers in the field and those requiring postsecondary degrees. In 2000, only 810 students in nine cities were participating.

An ACE chapter was set up in Indianapolis for the 2005-06 school year, says A. Ridgeway Miller, treasurer with the chapter and accountant with Crowe Chizek and Co. LLP, an accounting firm in Indianapolis.

There are other programs under way, too, including an inventive program in Milwaukee at the Lynde and Harry Bradley Technology and Trade School.

The Milwaukee Public Schools-operated facility opened in 2003 so students can begin learning the construction trades while earning a high-school diploma.

A number of plans have been implemented to increase the diversity of the construction field and make it more appealing to women and minorities so the labor supply goes up.

"If you look at most projects, you see middle-class white men almost entirely," the ICR's Price says. "That has to change."

The ICR awards points to contractors who hire and employ minorities and women, and participating ICR owner-members consider these firms for future work based on their point total.

"The whole idea is that essentially nothing has changed in the area of diversity in construction for 20 years," Price says. "We want a program that works and increases the number and capacity of minority and women firms and also increases the number of workers earning a middle-class living in construction."

SIDEBAR

Indianapolis Shortage/Surplus

A 2-year-old study projected a shortage in nearly all major trades in Central Indiana by 2008. An updated study is under way.

 

Trade 2007 2008
Trade	2007	2008
Carpenters Drywall	+51	-7
Carpenters Interior & Framing	+9	-155
Carpenters Other	+100	+27
Electricians	+192	+52
Glaziers	-29	-43
Ironworkers Structural	+27	-36
Ironworkers Rodmen	-9	-30
Laborers	-313	-566
Masons	+4	-86
Operating Engineers	+31	-33
Painters	+51	-8
Pipefitters/Plumbers	-267	-386
Roofers	-61	-69
Sheetmetal Workers	-1	-91
Total Shortfall	-214	-1,451
Source: Indiana Construction Roundtable

Click here for next Feature Story >>