by Tom Finan, Executive Director, Construction Forum STL
"What causes inflation?," my 13-year-old daughter asked me at dinner recently.
I tried to explain supply and demand and up economies versus down economies, and she stopped me. She's more of a mathematician than I'll ever be, and she favors straightforward answers versus my rambling stories. She stopped me and asked, "What did things cost when you were younger?"
I gave her some guesstimates from back then. Later on I did some digging. Here's a little bit of what I found (these are taken from 1973 newspaper ads):
Mercury, Montego, 2 door, $4,281.00
Plymouth, Duster, $2,275.00
Beef, shoulder roast, $1.39/lb
Bread, white, .29¢/loaf
Men’s shorts, $5.99/pair
Men’s suit, Joshua Trent, tropical knit, $98.00-$138.90/each
Women’s bathing suits, $2.00-$15.00/each
Women’s dress, summer, $6.66-$15.00/each
To put that in perspective, this from "Industry Wage Survey: Contract Construction, September 1973 : Bulletin of the United States Bureau of Labor Statistics, No. 1911: "Average straight-time hourly earnings of union and nonunion construction carpenters ranged from $6.19 an hour in Dallas to $9.56 in Cleveland, based on a September 1973 study in 17 metropolitan areas. Typical union-to-nonunion wage differentials within the areas studied were: 35 to 55 percent for carpenters..."
According to BLS, in 2016 the mean hourly wage for carpenters was $23.24 and the mean annual compensation was $48,340. Wages ranged from $13.02 an hour in the bottom 10 percent to $38.21 an hour in the top 10 percent.
A Cultural Disconnect
Our dinner table conversation came about because I was voicing what I saw as a disconnect between two articles in the news. The first, in the St. Louis Post-Dispatch was headlined "As construction picks up and workforce ages, contractors see skilled labor shortage." In it, a new AGC MO survey, which matches national AGC data, was cited, stating that 70 percent of contractors were facing a labor shortage. Len Toenjes, president of AGC MO, "implored" kids and parents to consider careers in construction.
At the same time, the Sunday New York Times ran a lengthy feature on the front page of its business section headed, "Global Economy’s Stubborn Reality: Plenty of Work, Not Enough Pay." The article noted:
"Some economists argue that the world is still grappling with the hangover from the worst downturn since the Great Depression. Once growth gains momentum, employers will be forced to pay more to fill jobs.
"But other economists assert that the weak growth in wages is an indicator of a new economic order in which working people are at the mercy of their employers. Unions have lost clout. Companies are relying on temporary and part-time workers while deploying robots and other forms of automation in ways that allow them to produce more without paying extra to human beings. Globalization has intensified competitive pressures, connecting factories in Asia and Latin America to customers in Europe and North America."
The Long Race to the Bottom
The Times noted: "Last year, only 10.7 percent of American workers were represented by a union, down from 20.1 percent in 1983, according to Labor Department data. Many economists see the decline as a key to why employers can pay lower wages.
"In 1972, so-called production and nonsupervisory workers — some 80 percent of the American work force — brought home average wages equivalent to $738.86 a week in today’s dollars, after adjusting for inflation, according to an Economic Policy Institute analysis of federal data. Last year, the average worker brought home $723.67 a week.
"In short, 44 years had passed with the typical American worker absorbing a roughly 2 percent pay cut."
The College Mirage
As the Times noted, erosion of the workforce in skilled manual trades has been caused by a lot of things, from cheaper labor elsewhere to mechanization and computerization of the jobs that remain. Unions have been weakened and political pressure on wages applied through Right to Work and repeal of Prevailing Wage.
With this scenario playing out there's little wonder that CTE programs have all but evaporated and emphasis has been placed by middle and high school educators with Master's degrees on college over skilled trades. And that's a problem
The recently-released 2017 St. Louis Community College State of the St. Louis Workforce report noted that, "According to the National Skills Coalition, Missouri’s middle-skill jobs represent 53% of all jobs in 2015 and will comprise 48% of job openings between 2014 and 2024. The study said that workers 55 and older represent 22% of the workforce versus 15.7% a decade ago. It also found that almost 60% of the employers who hired skilled trade workers were experiencing a shortage.
Last week, we saw and heard first hand some things that showed just how steep the trail is that it will take to right this situation, as well as some promising pathways.
Monday we were videotaping interviews with the honorees for next week's Construction Forum Education Foundation Building Tomorrow Awards (CFEF). I heard my friend Dr. John Gall of the Carpenters tell our video producer Amanda Aschinger that it took us a long time to get into this mess and that in his estimation it will take us at least eight years to begin to dig out of it, beginning with today's middle schoolers.
Tuesday we were at MODOT's Career Fair at Alberici's Kienlen Avenue facilities. Unions, contractors, industry associations and others met with high school students from 12 schools. There were hands-on demonstrations and one-on-one conversations about opportunities and careers. Most of the students were engaged, and some of them were clearly focused on the possibilities in construction.
Wednesday we were at "After Post Secondary" day at McCluer South-Berkley High School. Several unions and the military were there, but it was mostly colleges. On the wall at McCluer South is a banner that on which the large question, "Will you go to college?" is struck through and underneath is written, "WHERE will you go to college?" Underneath, very small signs that say "skilled trades" and "technical education" were added to the banner.
A technical college with an annual tuition of $14,457 (83% of freshmen receive grants) was represented at the McCluer event, as was a Kentucky school with annual tuition of $40,000. (In case you missed it, this event was being held in Ferguson.)
CFEF and the unions had the opportunity to tell some very interested students about articulation agreements between St. Louis Community College and some unions, which allow the students to get an associate's degree at no cost while they complete their apprenticeship.
Thursday we got a sneak peek at some of the first creative for CFEF's new initiatives, which include a video channel aimed at engaging kids, an online database allowing them to explore possibilities, and training adults in our industry to support them with mentoring. After intensive focus groups (with our own kids) CFEF and Solstice Productions came up with a new approach that is engaging and has attitude, wrapping around the reason why people who stay in construction love it. The theme, is "Yeah, I built that." We also saw the raw footage for the first video that will go up on CFEF's video channel for young people.
Friday we were pleasantly surprised by a Facebook notice about the Forum's Young Leaders Group (YLG) and their work with young people at Kingdom Academy. Kingdom House is a community agency located in the midst of five housing projects near 12th and Park streets. YLG first became involved at Kingdom House last year. This past summer the Carpenters union invited the Kingdom Academy kids to spend half a day at the JAPTC.
Saturday we got a look at the new digs of Building Futures, a not-for-profit located near Crown Candy in Old North, which introduces K-12 children to design with computers, drawing, model-building and brain power and to construction with hand and power tools.
Opportunities, skills education without burdensome debt, and wages that recognize the value that skilled workers bring to the table: That's the cost of labor capacity.
The more that we're willing to step up — like some of those people and organizations mentioned above — the more likely it is that we won't be staring down the same issues a decade from now.