When infrastructure boom meets workforce bust

For decades, the lack of progress in maintaining old and building new infrastructure in states and localities has topped the list of concerns for the future. Over the years, we’ve asked dozens of government leaders about this issue, and nearly all of them have told us the problem is simple: not enough money.

Now, with the federal government pouring cascades of cash into state and local coffers, a new problem looms on the horizon. Although not widely recognized yet, all the money in the world won’t make much difference if there aren’t enough people, inside and outside government, to spend the money effectively and timely.

Even before the current employee shortage plaguing states and local governments, there weren’t enough people to build, renovate and maintain public sector infrastructure. With today’s growing list of new projects, this problem is much more pressing. “The labor shortage is a huge dilemma, compounded by the infrastructure opportunities presented by the recent Congress,” says Emily Brock, director of the Federal Liaison Center at the Government Finance Officers Association.

The problem here is twofold.

First, there is a shortage of jobs in the public sector to take care of infrastructure. As Joshua Franzel, Managing Director of MissionSquare Research Institute points out, “If you look at the major categories that would be impacted by infrastructure spending, almost all of them are below 2019 levels, and the problem is particularly acute in rural areas. , who are having trouble recruiting people.”

Second, the workforce is aging and the number of retirements is cascading. This produces “a lot of output and you don’t have enough input,” says Franzel. “According to the Bureau of Labor Statistics, there were 93,000 architecture and engineering jobs in 2019 and that number had fallen to 89,500 in 2021. There are similar trends elsewhere.”

Federal dollar stipulations limit the amount that can be spent on public sector employees, but even the jobs that do exist have been very difficult to fill. Christin Webb, Purchasing Administrator for Shelby County, Tennessee, says, “I had a retiree, who was our primary buyer, and she retired in June 2022 after 42 years with the county. I’m still trying to fill the position. I had two great candidates who could have started and both turned us down because I couldn’t give them enough money to leave their current jobs.

“I’ve told my team it’s coming, and it’s clear we’ll need staff to spend the money that’s coming in,” she says.

Penny Owens, the purchasing agent from Knoxville, Tennessee, adds, “I worry about contract management. Our competitive spending went from $80 million last year to $120 million this year, and most of the difference was in federal money. But I’m afraid we’re dropping the ball. I don’t have the staff to track every contract and make sure we pay on that contract. And I don’t have the staff to oversee the contractors.

While the need for more jobs and people to fill them in the public sector is abundantly clear, an even bigger problem could be the shortage in the construction industry itself.

“Young people are reluctant to enter construction, civil engineering and transport trades. We have a lot to do and fewer men and women to do the actual work,” said Roger Millar, Washington State Secretary of Transportation and President of the American Association of State Highway and Transportation Officials.

Some of the reasons young people are reluctant to enter these fields, according to a 2017 article in Builder Magazine, include a lack of understanding of the compensation levels available there, the feeling among many that they are not interested in the physical work and the belief that these are difficult jobs.

According to a 2022 report from McKinsey & Company, the U.S. construction industry had about 400,000 job openings in April, the highest level since industry-level jobs data was collected. “This begs the question,” the report says, “who will fill the hundreds of thousands of additional jobs we estimate the bipartisan infrastructure bill will create each year (peaking above 300,000 in 2027 and 2028) in the construction value chain over the next decade?

This problem, which will likely lead to cost overruns and delays, cannot be viewed by national and local leaders as a private sector problem. It is elected officials who promise the public a golden age of infrastructure. According to Garo Hovnanian, author of the McKinsey report, “There is a difference between the people whose fault it is and those whose problem it is. Project delays could be the contractor’s fault until Sunday, but it’s the public sector chief’s problem if a project doesn’t get done, or if citizens end up sitting in traffic on a project construction for six months.

This shortage of construction workers is not only going to make it harder for states, cities and counties to get infrastructure work done, it is making things more expensive. Indeed, without enough available workers, fewer companies are inclined to bid on projects and, with less competition, costs rise.

“We like to joke that entrepreneurs don’t have ‘no’ in their vocabulary. But they’re not going to bid on a project they can’t deliver if they want to get more jobs in the future,” says Brian Turmail, vice president of public affairs and strategic initiatives for Associated General Contractors of America, the trade association for the commercial construction industry. “As a result, bids will be higher and the timeline for completion of work will be slower than historically expected.”

In Knoxville, for example, “We put out a bid for a fire station renovation,” says Owens. “We only received one offer for this, which is unusual. With a fire station renovation, you’d think we’d have quite a few bidders. And it came in at nearly double the budgeted figure. Now, that won’t go through this fiscal year. We have requested additional capital funds in the budget and hope to start the project in the fall.

The shortage of construction workers is largely due to the fact that over the past few decades there has been an emphasis on a college education as the ultimate goal for successful people, and construction jobs do not require of university degree. “You either went to college or you were a failure,” says Eric Fisher, director of talent development for Indiana Constructors, Inc., a trade association for the infrastructure construction industry in the US. Indiana.

A growing number of states, including Arizona, Indiana, Texas and Washington, have attempted to address this issue by removing the stigma, pointing out that construction jobs can pay even better than entry-level jobs for those with a liberal arts degree. Under Fisher’s leadership, Indiana developed the Civil Construction Pathways program, which was approved as a state high school curriculum.

Supported by private-sector construction companies like Caterpillar, this effort is expanding to a growing number of high schools across the state, which offer a three-year career path to construction, including a year of academic content. introduction followed by two years during which the students study. materials, construction methodology, construction inspection, blueprint reading, etc. In the final year, they are free to do an internship in a local company that is understaffed.

“The kids graduate Saturday night and are on the job Monday,” says Fisher.

Even after the federal money has been spent, there will always be pressure to maintain the ranks of people, inside and outside government, who are able to manage all the new infrastructure that has been put in place. square.

Says John Bartle, dean of the College of Public Affairs and Community Service at the University of Nebraska-Omaha and co-author of the 2022 book Innovative Infrastructure Financing: A Guide for State and Local GovernmentsEven beyond planning and construction, sufficient staff will be needed to ensure that money has not been wasted. Trained personnel are not only needed to plan for new assets, but also to consider the ongoing maintenance and operating costs that will be required. Without this kind of financial know-how, the money spent will not translate into a sustainable future for infrastructure.

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