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Florida Construction Workforce Taskforce: Determining the causes of the current shortage of a trained construction industry workforce and the impacts on the recovery of the real estate market Prepared by: James G. Sullivan Charles J. Kibert Andriel E. Fenner Shirley N. Morque

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Page 1: CONSTRUCTION WORKFORCE TASKFORCE...2016/12/03  · construction industry, professional societies, the nation, and the world. The Rinker School will achieve this mission by fostering

Florida Construction Workforce Taskforce:

Determining the causes of the current shortage of a trained

construction industry workforce and the impacts on the recovery

of the real estate market

Prepared by:

James G. Sullivan

Charles J. Kibert

Andriel E. Fenner

Shirley N. Morque

Page 2: CONSTRUCTION WORKFORCE TASKFORCE...2016/12/03  · construction industry, professional societies, the nation, and the world. The Rinker School will achieve this mission by fostering

FLORIDA WORKFORCE TASKFORCE REPORT

January 27, 2017

2

Sponsored by a grant from the

“Department of Business and Professional

Regulation” and “Building a Safer Florida, Inc.” to the

M.E. Rinker, Sr. School of Construction

Management at the University of Florida

M.E. Rinker, Sr. School of Construction Management

The M.E. Rinker, Sr. School of Construction Management at the University of Florida

combines the skills, diverse experiences, and talents of its faculty with an innovative educational

curriculum to educate future construction professionals. Housed in the College of Design,

Construction and Planning, the Rinker School is dedicated to construction science and

management and is committed to excellence in education and research. Established in 1935, it is

the oldest school of construction in the U.S. and the first program to receive accreditation from

the American Council for Construction Education (1975). Twenty faculty members teach and

guide the School’s 500 undergraduate and 120 graduate students. The School’s new building,

Rinker Hall, is the 26th building to have been awarded LEED Gold certification by the U.S. Green

Building Council. The Rinker School has substantial experience with crafts training and has had

extensive collaboration with the National Center for Construction Education and Research

(NCCER), the premier crafts training education organization, for the past 18 years. Most recently

the Rinker School developed a crafts training program, Training for Manufactured Construction

(TRAMCON), that provides students with hybrid manufacturing/construction credentials. These

credentials also provide training across multiple crafts including carpentry, plumbing, electrical,

and HVAC using NCCER training modules.

Mission Statement

The mission of the M. E. Rinker, Sr. School of Construction Management is to be the center

of excellence for construction. The Rinker School will pursue this by:

Promoting professional and ethical behavior in education and practice.

Advancing the industry by creating new knowledge through research and scholarly

activities.

Educating individuals in principles, knowledge and skills required to be successful in

their professional careers.

Providing service and transferring knowledge to the citizens of Florida, the

construction industry, professional societies, the nation, and the world.

The Rinker School will achieve this mission by fostering a core culture of value and quality.

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FLORIDA WORKFORCE TASKFORCE REPORT

January 27, 2017

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Executive Summary

The Rinker School of Construction

Management at the University of Florida has

been tasked with evaluating workforce

training availability in Florida. This study

will support the evaluation of workforce

development programs in the state and allow

for better understanding of the types and

training offered as well as where they are

offered and how they are sponsored.

Workforce shortages in the state are

historically cyclical and follow significant

lulls in construction volume over time. Most

recently, there was a significant downfall in

construction volume in Florida starting in

2007 (see Figure 1 below), with the recovery

beginning in 2012. The significance of this

most recent economic cycle to the state is that

the downturn started earlier in Florida and

lasted longer than the national average.

Construction employment follows

general housing and building trends as well.

The difficulty for the recovering market is

replacing the trained workforce that left the

state or the industry during the economic

downturn. High demand for trained workers

increases pressure on construction firms to

employ unqualified workers who are trained

through an informal on-the-job training

(OJT) process, resulting in initial quality,

productivity, and safety issues compared to a

trained worker. National construction

employment demands are reflected in Figure

2 below.

Figure 1 - Housing starts from 2005 through 2014

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FLORIDA WORKFORCE TASKFORCE REPORT

January 27, 2017

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Figure 2 - Department of Labor Statistics (Job openings in 1000’s)

Construction workforce training appears

in various formats, including high school magnet

programs, vocational schools, and

apprenticeships. The purpose of this report is to

provide a snapshot of the availability of training

relative to the increased demand and the lack of

interested applicants. Training programs

themselves are not adequate for filling the

workforce void. Current studies indicate that

50% of the construction workforce is 45 years or

older. An aging workforce, increasing in

construction volume and decreasing interest in

construction employment is creating the perfect

storm for severe labor shortages. These labor

shortages have the potential to limit the growth

of the construction industry, increase

construction costs, and limit the types of

construction trades available to service market

needs. These factors are the reasons that a

Workforce Task Force and research are required.

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FLORIDA WORKFORCE TASKFORCE REPORT

January 27, 2017

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Project Deliverables

The Construction Workforce Taskforce has been established via state legislation to address the

shortage of skilled crafts people and inspectors training in Florida. The taskforce will discuss and

recommend methods for craft workers and inspectors in the state of Florida.

The Workforce Taskforce specifically aims to analyze the following:

Address the critical shortage of individuals trained in building construction and inspection.

Develop a consensus path for training the next generation of construction workers in the state.

Determine the causes or the current shortage of a trained construction industry work force and

address the impact of the shortages on the recovery of the real estate market.

Review current methods and resources available for construction training.

Review the state of construction training available in K-12 schools.

Address training issues relating to building code inspectors to increase the number qualified

inspectors.

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FLORIDA WORKFORCE TASKFORCE REPORT

January 27, 2017

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Contact Information

Dr. James Sullivan

Undergraduate Program

Coordinator at M.E. Rinker Sr.,

School of Construction

Management

[email protected]

Dr. Charles Kibert

Director of the Powell Center

for Construction &

Environment at M.E. Rinker Sr.,

School of Construction

Management

[email protected]

Andriel E. Fenner

Ph.D. Student at Rinker School

for Construction Management

[email protected]

Shirley Morque

Ph.D. Student at Rinker School

for Construction Management

[email protected]

Board Members

Chairman: Peter Dyga

(Associated Builders & Contractors of Florida)

Alarm Association of Florida

American Fire Sprinkler Association

Florida Chapter

Associated Builders & Contractors of

Florida

Chair of the Florida Building

Commission

Florida Carpenters Regional Council

Florida Fire Sprinkler Association

Florida Home Builders Association

Florida Representative

Florida Roofing, Sheet Metal & Air

Conditioning Contractors Association

Florida Senator

Florida Swimming Pool Association

Independent Electrical Contractors

National Utility Contractors

Association of Florida

Asphalt Contractors Association of

Florida

Building Officials Association of

Florida

Florida Associated General

Contractors Council

Florida Building & Construction

Trades Council within the Florida AF-

CIO

Florida Concrete & Product

Association

Florida Electrical Workers

Association

Florida Plumbing-Heating-Cooling

Contractors Association

Florida Refrigeration & Air

Conditioning Contractors Association

National Contractors Association

Florida Chapter

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January 27, 2017

7

Key Discussion 3:

Determining the causes of the

current shortage of a trained

construction industry workforce

and the impacts on the recovery of

the real estate market.

Possible causes for the current shortage

Several factors can contribute to a

possible shortage of the trained construction

workforce. The following driving forces

were identified as having a major impact on

the state of Florida:

a) The aging workforce

The aging American workforce will

likely emerge as one of the dominant

economic factors in the coming decades. For

the construction sector, particularly, this

factor will have a large impact on

productivity and health issues, especially for

physically demanding occupations.

According to the 2013 American

Community Survey (ACS), the median age

for the construction workforce in the U.S.

was around 42 years, slightly higher than the

overall workforce age of 41 years (Figure 1).

By 2015, the average age of employed

workers in U.S. was almost 43 years,

showing a constant increase year after year

(Figure 2). The average age of the

construction workforce in the state of Florida

was around 44 years in 2013. According to

Steve Cona, from the Tampa chapter of

Associated Builders and Contractors, around

29% of skilled construction workers are 45 to

54 years old and nearly 21% are 55 years or

older. This means that millions of

construction workers are approaching

retirement soon. While retirements will

create openings in many occupations, they

will also trigger an increase in workforce

shortages for many occupations that currently

present low supply levels, especially those

skilled jobs as noted by previous reports.

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Figure 1 - Median age of the construction workforce by state.

Source: 2013 American Community Survey (ACS)

Industry 2015

Total 16-19

years

20-24

years

25-34

years

35-44

years

45-54

years

55-64

years

>65

years

Median

Age

Total

employed

148,834 4,734 14,022 32,742 31,252 32,643 24,975 8,465 42.3

Construction 9,935 148 725 2,251 2,457 2,321 1,634 399 42.7

Figure 2 - Employment persons by industry and age in 2015 [numbers in thousands].

Source: Bureau of Labor Statistics

b) Lack of exposure to the construction

environment and/or low quality of

training programs.

According to the Florida Education &

Training Placement Information Program

(FETPIP), around 65% of high school

students go to college upon completion of

high school. The major reason is because

current high school programs do not inform

students of career and educational

opportunities such as apprenticeship. Also,

shop classes are no longer featured in high

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January 27, 2017

9

schools as they once were, so students are not

being exposed to the construction

environment in order to consider construction

as a career path.

Training programs are widely available

around the U.S. for a variety of construction

occupations. The Registered Apprenticeship

(RA) is the most well-known career-training

program that offers job training combined

with related technical instruction adapted to

industry needs. The basic components of

current apprenticeship programs are the same

as the National Apprenticeship Act of 1937

that established the foundation for

apprenticeships in the U.S. In this system,

students are registered in a structured

program with classes and paid on-the-job

training (OJT) under the guidance of a

mentor. Upon completion of the program,

students earn an industry-recognized

credential and start looking for jobs.

It is estimated that 91% of all apprentices

find employment after completing the

program. Because of these positive results,

President Obama set a goal in 2014 to double

the number of apprenticeships to 750,000 by

the end of 2018. As a result, the U.S.

Department of Labor has invested $265

million since 2015 to expand apprenticeships

and many states are increasing funding for

technical assistance, tax credits to employers,

and career and technical training to prepare

students.

There are many reasons why a firm might

choose apprenticeship programs as a model,

such as:

Many firms have difficulty

finding company-specific

knowledge and skills in the open

job market. As a result, employers

leave the position vacant, turn

down work or delay product

delivery.

Apprenticeship may reduce

attrition by building a bond of

loyalty between company and

employee or by providing an

opportunity for motivated young

people to stay rooted in their

communities.

Apprenticeship often leads to

faster advancement in the

company, helping firms develop

their future leaders.

Within the apprenticeship framework,

companies found great flexibility to adapt the

model to their needs. As a result,

apprenticeship programs vary significantly in

length and cost. The length of apprenticeship

programs can range from less than one year

to more than four years; and the costs can go

from $25,000 to $250,000 per apprentice.

In the United States, apprenticeships are

concentrated in the building trades. It is

estimated that nearly two-thirds of all

registered apprentices in the U.S. are in the

construction industry. The Building Trades

Unions represent more than 1,600 training

centers nationwide, with over $1.3 billion of

funding per year.

While recent numbers regarding

apprenticeship programs have been vibrant,

the construction industry lost a significant

number of apprentices during the economic

downturn of 2006 to 2009. Nationwide, the

number of new apprenticeships in 2010

declined by 39% compared to 2000 with

significant losses in states like Florida, Ohio

and Pennsylvania. In the state of Florida, the

number of new students have been increasing

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since 2010, but the number of active

apprentices have been fluctuating

significantly (Figure 3; Figure 4). Also, the

number of active programs in the state of

Florida is significantly less than less-

populous states, such as Georgia and South

and North Carolina (Figure 5).

Figure 3 - Number of active apprentices in selected American states.

Source: U.S. Department of Labor, Employment and Training Administration.

34

21

78

48

47

32

16

83 3

19

8

38

68

10

60

2

51

24

12

13

7

66

39

22

26

47

91

48

94

14

77

4

44

49

11

85

3

62

65

20

79

64

12

57

37

15

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96

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53

76

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36

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A L A B A M A F L O R I D A G E O R G I A M I S S I S S I P P I S O U T H C A R O L I N A

N O R T H C A R O L I N A

T E X A S

ACTIVE APPRENTICES IN SELECTED STATES

2011 2012 2013 2014 2015

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Figure 4 - Number of new apprentices in selected American states.

Source: U.S. Department of Labor, Employment and Training Administration.

Figure 5 - Number of new apprenticeships by state, 200 and 2010 enrollment cohorts.

Source: U.S. Department of Labor, Employment and Training Administration.

88

6

30

37

13

86

45

8

12

38 1

78

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A L A B A M A F L O R I D A G E O R G I A M I S S I S S I P P I S O U T H C A R O L I N A

N O R T H C A R O L I N A

T E X A S

NEW APPRENTICES IN SELECTED STATES

2011 2012 2013 2014 2015

10

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A L A B A M A F L O R I D A G E O R G I A M I S S I S S I P P I S O U T H C A R O L I N A

N O R T H C A R O L I N A

T E X A S

ACTIVE APPRENTICESHIP PROGRAMS IN SELECTED STATES

2011 2012 2013 2014 2015

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Figure 6 - Top occupations in the 2015 fiscal year.

Source: U.S. Department of Labor, Employment and Training Administration

In 2015, the construction industry was

ranked the top industry in the number of

active apprentices, totalizing 132,100

students nationwide. Also, 19 construction

occupations were among the top 25

occupations for the 2015 fiscal year in the

number of new apprentices (Figure 6).

However, the occupation distribution of

students pursuing apprenticeship training is

extremely uneven, which may explain the

differences in the supply gap in several

construction occupations. For example,

carpenters, roofers, sheet metal workers and

ironworkers are expected to have higher or

similar employment growth than electricians,

a factor that should be considered in the

apprenticeship programs.

The quality of local training programs

also contributes to the shortage of trained

professionals. Sometimes, the few students

who decide to pursue construction jobs lack

the skills needed to perform productively on

a construction site. In these cases, on-site

training classes are extremely important for

construction-related jobs. As noted by the

Associated General Contractors of America,

around 73% of construction companies in

Florida rated the overall quality for training

new hourly craft professionals as poor or

below average and 43% rated the quality of

salaried professionals as poor or below

average (America, 2015b). Due to these facts,

more detailed research should be conducted

to understand the reasons for the poor

evaluation.

c) Economic factors and instability

Another explanation could be that

people who left the construction trade after

the great recession did not return to the

construction sector. Most economists call this

the “labor-market scarring”. Nationwide, it is

estimated that there are 17% fewer people

working in the construction industry than at

the market peak. These potential workers

who are either employed or actively seeking

0

5000

10000

15000

20000

25000

30000

35000

40000

Electrician Carpenter Plumber Pipe fitter Sheet MetalWorker

Const. CraftLaborer

Roofer Ironworker Painter

TOP APPRENTICESHIP PROGRAMS NATIONWIDE

2011 2012 2013 2014 2015

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a job in the industry represent a significant

amount of the needed construction workers

and might partially be a reason for the current

construction labor shortage (Figure 7).

Currently, several construction sectors are

increasingly desperate to bring back fully

skilled laborers that left the industry during

the downturn and do not plan to return due to

the industry’s job insecurity.

In the state of Florida, the

construction sector lost more jobs than any

other sector during the great recession.

Construction employment peaked in June

2006 with about 691,900 jobs and reached

the lowest levels from 2011 to 2012. After

successive growth, employment rates

reached 457,300 jobs in July 2016, but were

still 34% less than 2006 (Figure 8). The

difference in workers between 2006 and 2016

is a significant factor for the current

workforce shortage in the state and should be

carefully considered.

Figure 7 - Graph representing the number of people nationwide that are neither employed nor seeking

employment.

Source: Economic Policy Institute

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Figure 8 - Statewide employments for the construction industry. Data extracted on: September 15, 2016

Source: Bureau of Labor Statistics.

d) Foreign-born workers influence

Foreign-born workers have always been

an important source of new entrants to the

construction industry. The concentration of

immigrants is particularly high in some low-

skilled construction trades that do not require

a high education level, but still require some

level of training such as carpenters, painters,

brick masons, and drywall and ceiling tile

installers. Those occupations also

consistently have the highest labor shortages.

The share of immigrants in the U.S. labor

force rose rapidly during the housing boom

years, when labor shortages were widespread

and severe across construction trades. Even

during the recession, the share of immigrants

remained relatively high in the construction

industry compared to non-construction

sectors. Immigrants started to return to the

construction industry only in 2013, reaching

almost 23% of the construction work force in

U.S. (Figure 9).

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Figure 9 - Share of immigrant in the U.S. labor force for construction and non-construction occupations

(2004-2013).

Source: NAHB Economics

The reliance on foreign-born labor is

even more noticeable in the most populous

American states like California, Texas and

Florida where the share of immigrant

workers is higher than 30% (Figure 10). Also,

more than 80% of the immigrant workers in

the construction industry are Hispanic and

Latino Americans, and English is not their

native language. Several companies in

Florida already prefer professionals that can

easily communicate in English and, at least,

Spanish due to the high immigrant share.

Also, it is possible to observe a high

participation of lower educated immigrants in

the construction industry. The differences in

scholarity between native and foreign-born

workers can be seen in the Figure 11. About

13% of the native construction workers

nationwide do not have a high school

diploma, while 35.3% have completed high

school. Among immigrants, almost 50% do

not have a high school diploma, while only

27.7% have a diploma. The most prevalent

construction occupations for immigrants in

2013 were plasterers and stucco masons

(59%), drywall installers (49%), roofers

(43%) and hazardous materials removal

(43%) (Figure 12).

19.9%21.2%

22.3% 22.8% 22.2% 22.2% 22.1% 22.1% 21.9%22.8%

14.2% 14.4% 14.9% 15.0% 15.1% 15.3% 15.8% 16.0% 15.9% 16.0%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Immigrants in the U.S. labor force

Construction Non-construction

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Figure 10 – Share of immigrants by state in the construction sector in 2013.

Source: NAHB Economics

Place of

birth

Less than

high school

diploma

High

school

diploma

Some

college

Bachelor’s

degree

Graduate or

Professional

degree

Total

Native 12.8% 35.3% 39.6% 10.5% 1.9% 7,721,077

Foreign Born 48.6% 27.7% 16.1% 5.6% 2.0% 2,279,291

All 20.9% 33.6% 34.2% 9.4% 1.9% 10,000,368

Figure 11 - The differences in scholarity between native and foreign-born workers nationwide (2013).

Source: NAHB Economics

Construction Occupation Total No high school

diploma

Immigrant’s

share

Construction laborers 1,849,815 30.7% 34.1%

Carpenters 1,097,577 25.2% 27.6%

Electricians 560,499 9.4% 14.1%

Roofers 237,133 45.6% 43.5%

Drywall and ceiling installers 152,939 43.3% 49.2%

Plasterers and stucco masons 36,339 47.3% 59.0%

Hazardous materials removal workers 3,841 23.1% 43.4%

Figure 12 – Share of immigrants in selected construction occupations (2013).

Source: NAHB Economics

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e) Low female participation in the

construction labor force

Historically, female have participated in

the workforce less than their male

counterparts, even with the recent significant

increase of female participation. The

variation is even higher in some male-

dominated sectors, such as construction.

According to the Bureau of Labor Statistics,

only 9.3% of the employed workers in the

construction sector in 2014 were female. The

women’s share in apprenticeship programs

also reflects the same characteristics. In

2010, women represented less than 9% of

students entered in the RA program. The

share of females was even lower in male-

dominated occupations, such as electricians

(less than 5%), carpenters (less than 3%), and

plumbers (less than 2%) as seen in Figure 13.

Due to these facts, it is also expected that the

completion rates of females would be lower

than men’s completion rates.

Interviews with female students

showed three major barriers as the cause of

low female participation rate. First, women

normally do not know about the skills needed

to enter in the construction sector, which

leaves them with an unrealistic perception of

the construction work, which in turn leads to

failure. Finally, women face some challenges

performing “male dominated” work.

Currently, RA programs and the Women

Apprenticeship in Nontraditional

Occupations (WANTO) are trying to

promote women’s success in apprenticeship

programs, especially for male-dominated

occupations, by ensuring that employers

create and enforce policies to combat

harassment and by connecting women with

their peers for support and encouragement.

Occupation Men Women All

Electrician 25.1% 4.6% 23.4%

Plumber 12.6% 1.6% 11.6%

Carpenters 7.4% 2.9% 7%

Heavy truck drivers 5.9% 3.5% 5.7%

Sheet metal workers 3.8% 0.3% 3.5%

Electrician 3.8% 0.1% 3.5%

Sample size: 21,426 Figure 13 – Share of men and women in apprenticeship programs nationwide in 2010.

Source: Mathematica, Policy Research

f) Employers do not take into account the

relative shortage or abundance of

particular skills when they set wages

The low wage rate for construction

workers may be influential for the current

workforce shortage. The average hourly rate

of a construction worker in Florida,

according to the U.S. Bureau of Labor

Statistics in May 2014 was $17.79 or $37,000

a year. However, research shows that starting

salary for construction workers may be much

lower with very few benefits. In addition to

that, very few occupations in the state of

Florida have had positive wage change

within the 2011-2015 period compared with

the U.S. average (Figure 14). Considering

that the construction industry is stronger in

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Florida than the U.S. average and is expected

to have higher employment growth, it is

expected that the median wage would

represent the same perspective (Figure 15).

Due to these facts, it is argued that with

such low pay, the construction industry

cannot compete with other sectors like

technology and communication jobs.

Therefore, there is a need to increase pay

rates in order to attract more young people to

the construction industry.

Figure 14 – Median wage change of selected construction occupations during 2011-2015.

Source: Florida Employ Marketplace

Figure 15- Projected employment growth for selected construction occupations.

Source: Florida Employ Marketplace

7.30% 0.50%

-2.90% -3.90%

6.40% 0.60% 0.00%

-10.10%

14.80%7.80%5.20% 4.10%

2.50%5.20% 6.00% 7.10% 6.10%

26.40%

Constructionand buildinginspectors

Carpenters Roofers Brickmasons/

Blockmasons

Electrician Plumber Shet MetalWorker

Drywall andCeiling TileInstallers

ReinforcingIron nd Rebar

Workers

Median Wage Change2011-2015

Florida Median Wage change 2011-2015 US Median Wage change 2011-2015

25%29%

39%

46%

32.20%

28.00% 28.30%32.10%

51.90%

8.00% 6.40%

12.80%

18.60%

13.70%12.00%

6.70% 5.20%

23.40%

0%

10%

20%

30%

40%

50%

60%

Constructionand buildinginspectors

Carpenters Roofers Brickmasons/

Blockmasons

Electrician Plumber Shet MetalWorker

Drywall andCeiling TileInstallers

ReinforcingIron ndRebar

Workers

Projected Employment Growth2014-2024

Florida Employment Growth 2014-2024 U.S. Employment Growth 2014-2024

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g) Climatic conditions factor in Florida

Another peculiar reason for construction

work shortage in Florida is the hot humid

climate experienced almost throughout the

year. The Florida heat does not make the

construction profession attractive to the

youth, since most of them would rather prefer

to be in an air-conditioned office space rather

than to be in the heat. In addition to that, there

is a high rate of early retirement for

construction workers due to the physical

nature of construction work. All of these

factors combined with the low wage rates do

not make the industry competitive with other

sectors, even for those with lower pay rates.

The impact of the shortages on the

recovery of the real estate market

a) Impacts on job costs and selling prices

Nationwide, 43% of firms have reported

an increase in use of subcontractors during

the past year, 33% reported an increase of the

use of staffing companies, and 19% reported

an increase of labor-saving equipment, tools

and/or machinery (America, 2015a). In the

state of Florida, 46% of firms have reported

an increase in the use of subcontractors

during the past year, 42% reported an

increase in the use of staffing companies, and

23% reported the use of labor-saving

equipment, tools and/or machinery (Figure

16). Because of the difficulty to fill positions,

8% of companies also noted the use of offsite

prefabrication methods, building information

modeling, and lean construction, and 4% of

companies increased the use of union

workers (America, 2015b).

Florida companies also have reported an

increase in pay and benefits. 52% and 69% of

companies have increased base pay rates for

both hourly craft and salaried professionals,

respectively. In addition to that, 24% have

increased contributions and improved

employee benefits. Overtime, payments and

bonuses also were noted by some companies

(America, 2015b).

Figure 16 - Workforce shortage impacts in the administration of construction companies.

Source: Associated General Contractors of America

According to Turner Construction

company, the continuous increase of the

construction project costs in 2016 are directly

related to the ongoing shortage of skilled

labor. While the labor costs were always

fluctuating, the labor costs only became

0%

10%

20%

30%

40%

50%

Subcontractor dependence Increase in staffing companies Labor-saving methods

Workforce shortage impacts in companies' administration (2015)

U.S. Florida

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significant at the beginning of the 1st Quarter

of 2016 (Figure 17). As a way to combat the

increasing costs, subcontractors became

more strategic and selective in allocating

efforts and resources. Some subcontractors

were also becoming less strict when hiring

experienced workers or hiring multiple

workers to fill the gap in expertise to

complete the job in a reasonable time,

impacting directly the total project costs.

Figure 17 - Graph representing the construction costs for non-residential projects by Turner.

Source: Turner Construction

In the case of residential construction, the

impacts of the workforce shortage could be

even higher. According to the National

Association of Homebuilders, the average

construction costs of a single-family home is

around 14% higher than in the housing boom

of 2007. Among all the factors that could

possibly contribute to the cost increase, the

workforce shortage had the biggest impact

for many American states. Due to these facts,

most contractors and subcontractors are

leaving the low-level home market and

targeting only expensive and high level/

luxurious projects in order to maintain their

margins. Therefore, it is estimated that the

prices for available low-level houses will

increase in the future as the market for that

level shrinks, pushing low-income families

out of the housing market. In the state of

Florida, particularly, most home’s selling

prices increased from 6% to 14% over one

year, with several luxurious residential

buildings and condominiums being built in

the Miami and Orlando metropolitan areas

and expected to be delivered in 2017 (Figure

18).

50

5

52

5

54

9

57

0

59

5

61

3

61

9

62

1

65

5 71

7 79

3 85

4 90

8

83

2

79

9

81

2

83

0

86

4 90

2

91

2 97

0

98

3

99

5

Average Cost Index for Non-Residential Projects

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Figure 18 – Change in home prices over one-year (2016, 2nd Quarter)

Source: Mortgage Guaranty Insurance Corporation

b) Impacts in construction worksite safety

According to the Associated General

Contractors of America, a small but

significant number of companies reported

that labor shortages have affected workplace

safety, meaning there are more injuries on the

job because of the lack of experienced

workers. Nationwide, 15% of firms reported

an increase in the number of reportable

injuries and illnesses because of workforce

challenges, 13% reported an increase in the

number of jobsite hazards identified in

inspection reports, and 11% reported an

increase in worker compensation claims that

they attribute to tight labor market conditions

(America, 2015a).

In the state of Florida, the construction

safety and health performance of companies

has presented higher numbers than

nationwide. Around 27% of firms reported an

increase in the number of reportable injuries

and illnesses, 15% reported an increase in the

number of jobsite hazards identified in

inspection reports, and another 15% reported

an increase in worker compensation claims

that they attribute to tight labor market

conditions (America, 2015b).

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Figure 19 - Workforce shortage impacts in worksite safety.

Source: Associated General Contractors of America

c) Impacts in the project schedule

The project schedule for most projects is

also being affected due to the problems filling

available positions for both hourly craft and

salaried professionals. It is becoming

common for owners and contractors to

dispute the time allowed to closeout a project.

Summary

The average age of the construction

workforce in the state of Florida was

around 44 years in 2013, meaning that

millions of construction workers are

approaching retirement within the

coming years.

In the state of Florida, the number of new

students in apprenticeship programs has

been increasing since 2010, but the

number of active apprentices has been

fluctuating significantly.

The number of active programs in the

state of Florida is significantly less than

other southern states, such as Georgia and

South and North Carolina.

The occupation distribution of students

pursuing apprenticeship training is

extremely uneven, which may explain the

differences in the supply gap in several

construction occupations.

73% construction companies in Florida

rated the overall quality of training new

hourly craft professionals as poor or

below average and 43% rated the quality

of salaried professionals as poor or below

average.

In the state of Florida, the construction

sector lost more jobs than any other sector

during the great recession. After

successive growth, employment rates

reached 457,300 jobs in July 2016, but

still 34% less than 2006. The difference

in workers between 2006 and 2016 is a

significant factor for the current

workforce shortage in the state and

should be carefully considered.

0%

10%

20%

30%

Reportable injuries Jobsite hazards reports Worker's compensation claim

Workforce shortage impacts in worksite safety(2015)U.S. Florida

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Foreign-born workers have always been

an important source of new entrants to the

construction industry. The concentration

of immigrants is particularly high in some

low-skilled construction trades that do

not require a high education level.

Only 9.3% of the employed workers in

the construction sector in 2014 were

female. The women’s share in

apprenticeship programs also reflects the

same characteristics.

Very few construction occupations in the

state of Florida have had positive wage

change within the 2011-2015 period

compared with the U.S. average.

Considering that the construction

industry is stronger in Florida than the

U.S. and is expected to have higher

employment growth, it is expected that

the median wage would represent the

same perspective.

The Florida heat does not make the

construction profession attractive to the

youth.

Florida’s companies have also reported

an increase in pay, benefits, overtime

payments and bonuses.

Subcontractors became more strategic

and selective in allocating efforts and

resources. Some subcontractors were also

becoming less strict when hiring

experienced workers or hiring multiple

workers to fill the gap in expertise to

complete the job in a reasonable time

period, impacting directly the total

project costs.

The average construction cost of a single-

family home is around 14% higher than

in the housing boom of 2007.

In the state of Florida, the construction

safety and health performance of

companies has presented higher numbers

than nationwide.

It is becoming common for owners and

contractors to dispute the time allowed to

closeout a project.

References:

Associated General Contractor of America (AGC). 2015 Workforce Survey Result: National Results.

Retrieved December 09, 2016, from https://www.agc.org

Associated General Contractor of America (AGC). 2015 Workforce Survey Result: Florida Results.

Retrieved December 09, 2016, from https://www.agc.org

Bureau of Labor Statistics (2016). Employed persons by detailed industry and age. (n.d.). Retrieved

December 09, 2016, from http://www.bls.gov/cps/cpsaat18b.htm

Bureau of Labor Statistics. State and Area Employment, Hours, and Earning. Data extracted on:

September 15, 2016.

Bureau of Labor Statistics. Household Data: Annual Averages - Employed persons by detailed industry,

sex, race, and Hispanic or Latino ethnicity (2015)

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Economic Policy Institute (2016). Missing Workers: The missing part of the unemployment story.

Retrieved December 09, 2016, from http://www.epi.org/publication/missing-workers/#chart-total

Florida Education & Training Placement Information Program (FETPIP). Retrieved December 09, 2016,

from http://www.fldoe.org/

Florida Employ Market. Job Market Trends. Retrieved December 09, 2016, from

https://www.employflorida.com

Fortune (2016). What’s Holding Back the Housing Market? Not Enough Construction Workers.

Retrieved December 09, 2016, from http://fortune.com/2016/09/06/housing-construction-worker-

shortage/

Mortgage Guaranty Insurance Corporation (2016). Market Trend Analysis October 2016. Retrieved

December 09, 2016, from https://www.mgic.com/pdfs/71-40037_market_trend_analysis.pdf

NAHB Economics. Immigrant Workers in the Construction Labor Force. Special Studies, February 2015.

Reed, D., Liu, A. Y. H., Kleinman, R., Mastri, A., Reed, D., Sattar, S., & Ziegler, J. (2012). An

effectiveness assessment and cost-benefit analysis of registered apprenticeship in 10 states.

Mathematica Policy Research.

Turner Construction (2016). Cost Index. Retrieved December 09, 2016, from

http://www.turnerconstruction.com/cost-index

U.S. Department of Labor, Employment and Training Administration. Data and Statistics. Retrieved

December 09, 2016, from https://www.doleta.gov/OA/data_statistics2014.cfm

Zhao, N. (2015). Age of the Construction Labor Force. Retrieved December 09, 2016, from

http://eyeonhousing.org/2015/12/age-of-the-construction-labor-force/