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January 14, 2013

New federal skilled trades program a key step

Construction Corner | Korky Koroluk

One of the good-news stories in the construction industry in the year just ended was the announcement of the new federal skilled-trades program, which will make it easier for employers to bring in skilled trades from other countries.

First announced in April, the program has now been launched, and it holds out some promise that the present and future shortage of some skilled trades will be met during the next decade.

It’s an important step and the government deserves credit for taking it.

But, will it really solve our industry’s labour problem? The program may ease the problem somewhat, but solve it? Not likely.

The bigger problem is that there are skilled-labour shortages in other countries as well, including the United States. Internationally, the competition for the skilled tradespeople available is stiff and getting stiffer.

Early in December, The Economist, a prestigious international business publication, reported on a large study carried out by McKinsey, a large consulting firm. It was not good news.

Korky Koroluk

Construction Corner

Korky Koroluk

McKinsey has closely followed the labour markets in nine countries: Brazil, Britain, Germany, India, Mexico, Morocco, Saudi Arabia, Turkey and the U.S., and found that only 43 per cent of employers in those nations feel they can find enough skilled entry-level workers.

It found that middle-sized firms — those with between 50 and 500 workers — have, on average, 13 entry-level jobs empty, while large employers have 27 vacancies.

The study found that in parts of Europe and the Middle East, more than a quarter of people between the ages of 15 and 24 do not have jobs.

In some areas, such as Spain and Egypt, the figure is more than half.

Globally, hundreds of millions of young people are either unemployed or underemployed, so why can’t employers find workers?

McKinsey argues that a big part of the problem is that educators and employers live in parallel worlds, and that a key part of the solutions is to bring those worlds together.

People from both worlds must cross over and learn about problems first-hand, and students must be able to move seamlessly between the two.

In many parts of the world, and certainly in North America, the great tech boom of two decades ago led to guidance counsellors streaming most students into technical educations.

Attending trade schools was an option that many counsellors simply didn’t suggest.

The money was in high tech, so channel your students toward high tech — even if they weren’t especially interested. It was a tragic example of short-sightedness.

In the U.S., there should be no shortage of skilled tradespeople.

After all, the construction industry there shed 2.2 million workers during the recent recession.

So now that the American industry is beginning to rebound, there should be lots of people looking for work, right? Well, no.

When the recession threw all those people out of work, many left the construction field entirely, retired or moved looking for work, leaving some markets — Texas, Arizona, Iowa and Florida among them — short of labour.

Many of those workers became truck drivers, factory workers or found work in the country’s booming oil and natural gas fields.

At the same time, the Baby Boom generation was beginning to retire, and school guidance counsellors continued to promote the idea of a college education or training in high-tech fields.

So, federal programs here and there are simply not going to bridge the gap between jobs available and workers available.

We’re going to have to do more — and one of the best ideas around is to increase worker productivity by changing the way we build many of our buildings, and thus reduce the demand for workers in conventional construction.

A firm working on a project in Brooklyn, N.Y., may have at least a partial answer, and I’ll come back to that in an upcoming column.

Korky Koroluk is a regular freelance contributor to the Journal of Commerce. Send comments or questions to editor@journalofcommerce.com.

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