A recent report by construction data firm BuildZoom found that, nationally, Massachusetts holds the most significant shortage of construction labor.
The report looked at the length of time that online construction job postings were sustained on various sites, using data from labor market intelligence firm Greenwich.HR. With the state facing the worst construction worker shortage in the country, firms are looking at ways to recruit younger workers.
The share of workers in construction who are 24 years old or younger has declined in 48 states since the last housing boom in 2005. Issi Romem, chief economist at BuildZoom, reflected on the report's findings.
"Places with high housing costs tend to be less attractive to construction labor, making it harder to fill construction jobs," Romem concludes. "This it the 'reducing supply' part. The people and firms that remain in such places tend to be more affluent, and generally spend more than others on construction-related services. This translates to greater demand for construction work and workers."
While Massachusetts was at the top of the list, New Jersey, California, Pennsylvania and Connecticut followed closely behind - all states with relatively high housing prices. On a chart comparing median home values with number of days job postings remained online throughout the country in 2017, Romem observed that the shortage of construction labor is greater in states whose housing is more pricey.
Romem suggests several possible reasons for the correlation:
- High housing prices restrict the market and make the construction labor pool tighter by reducing needed supply and increasing demand.
- Tighter labor pools push prices higher by raising the duration and cost of construction, further exacerbating the labor problem.
- Competition for buyers in vibrant economies results in high home prices, high wages and a greater difficulty filling jobs.
While the employment rate for construction workers has rebounded since the housing bust (80.3% in 2005 to 69.4% in 2010 to 80.5% in 2016), the construction workforce has diminished since the recession. The workforce was at a high of 11.7 million in 2005 to 10.8 million in 2010 and 10.2 million in 2016.
Construction firms and labor unions have cited a key factor in driving the shortage in their industry: the construction workforce is aging, and younger generations are not filling the open positions.
In the recent economic downturn, younger construction workers found themselves without jobs and had to find work in other industries, not necessarily other construction firms. When construction in Boston was on the rise again, those workers stayed in their new industries. Young workers are more likely to change companies and careers numerous times, whereas older generations were less apt to do so.
"Why aren't young workers flocking back to the construction industry? There is no obvious answer," Romem concludes. "But one possibility is that the formal training required in the construction trades is harder to come by today than it was before the housing bust. This could be because of the loss of institutions such as high school vocational training programs and technical colleges during the bust. The evidence of such institutions shutting down during the bust is anecdotal, but it would be no surprise if it turned out that such institutions closed down more often in states that were harder hit."
"Another possibility is that young workers often enter construction following the footsteps of older relatives and friends. The decline in construction labor during the housing bust, especially among the younger ranks, left fewer young construction workers to reel in the next generation."
Jim Grossmann, national director of construction operations for Suffolk, said that there's a stigma in Massachusetts that young people should obtain a college degree rather than join a building trade or get an apprenticeship.
"We've become more of a white collar state... the white collar service industry is seen in a much better light," Grossman states. "The reality is when you're shoveling dirt or banging nails or putting pipes together on a cold, rainy day, an office job can look more appealing".
If the labor shortage were to continue, Massachusetts could face significant project delays, quality issues and higher costs.
While construction jobs aren't seen as the most attractive occupations by eager, young professionals, the pay rates for a construction job are often more than 10% higher than the average private-sector job.
Construction firms including Skanska and the New England Regional Council of Carpenters have increased their recruitment efforts in targeting younger generations. They're marketing jobs to college students and high schoolers, and bringing in girls to meet the female workers, clients, architects and engineers to show them the variety of paths they can take with a construction career.
Changing the perception of an entire industry can be an arduous process, especially when an industry is rooted in the same way things are done for the last 50 years. Construction firms remain optimistic that their flexibility and advancements in construction technology will help attract and retain young professionals to the industry.