Lack of skilled labor haunts Arizona’s construction industry

Early this month, Mark Flynn, a construction industry veteran and owner of an electrical company in Tucson, appeared at an annual rite: a competition among high school students learning construction trades, such as carpentry and cabinet making.

As he judged the competition, Flynn couldn’t help but note that today’s craftsmen are graying and pushing retirement.

“When you drive around Phoenix, if you see an HVAC or electrical contractor truck or plumbing truck, just look at who’s behind the wheel,” he told the Arizona Capitol Times. “You’re going to see a few young guys, but most of the guys are going to be white haired.”

The trades, he said, are passed down from expert to intern. Sure, some things can be learned from school, but to really master a craft, one has to be on site, absorbing how things are done and getting practical experience.

“How to bend a piece of rigid conduit, how to tug wire, how to strip wire – it’s something you watch a guy do, and the guy shows you how to do it, and you do it,” Flynn said.

But aging masters have fewer and fewer interns to pass their knowledge to.

And that, he hastened to add, is a big problem.

“We’re running out of skilled people in all the trades,” he lamented.

The lack of skilled labor haunts not only Arizona’s construction industry. It is endemic nationwide, and it is becoming more pronounced even as the construction industry steadily recovers from the great real estate crash of the last decade.

A recent survey by the National Association of Home Builders shows that cost and the availability of labor top the list of builders’ problems, and they expect it to become more acute this year.

Another survey shows a critical shortage for basic skills, such as carpentry.

Experts cite several reasons why. One of them is that Arizona is simply not attracting as many migrants as before. Migrants had been a reliable source of labor for the housing industry. But when the economy crashed a decade ago, the state’s robust immigration flows slowed, and they have yet to fully recover. Some also suspect that the state’s crackdown on illegal immigrants triggered by SB1070 might have a played a part, noting that hiring undocumented workers posed no legal threat to businesses before.

NAHB expert David Crowe said based on research, only about 40 percent of construction workers during the peak had returned to the industry today.

Of the 60 percent who never returned, a good chunk remained unemployed, he said, although he added that many found jobs elsewhere, such as in the energy sector.

The lack of workers can lead to a self-defeating spiral: It means builders can’t build fast enough to meet rising demands. It can push wages up, which means it would be more expensive to build, which, in turn, can push up prices of homes, which can price out some buyers, potentially depressing sales.

In the short run, the shortage of skilled labor can constrain the housing market’s full recovery.

And this is where industry advocates say career and technical education comes in: It helps fill some of that gap by graduating students who could be employable by the time they leave high school.

This is also why last year’s cut to the Joint Technical Education District program, which has since been reversed, came as such a huge blow to the sector, they said.

Crowe, the housing expert, said the lack of skilled labor is also attributable to the decline in support for vocational and technical schools following the economic crash.

Nationwide, those schools had provided opportunities for students to join the construction sector. At the time, the work was an attractive career prospect.

Crowe said the crash, which led to state revenues drying up, forced cutbacks all across the country. Among those that were hit were the vocational and technical training schools.

And suddenly, construction work no longer seemed as attractive to students.

Alan Storm, the superintendent of Pima’s JTED program, can attest to that.

During the crisis, high school enrollment in the construction program dropped, he noted.

“And, I assumed parents were saying to kids, ‘You don’t want to take those classes. There are no jobs,’” Storm said.

But Arizona’s actions last year certainly didn’t help, JTED advocates said.

In the rush to pass a budget, lawmakers approved a $30 million cut to the JTED program. The cut caught many off guard, but, depending on whose version of events is offered, the train had already left the station. There was nothing left to do, except gnash one’s teeth and wait for the next legislative session.

Months later, the JTED cut, which was supposed to take effect this July, had become the single most loathed budget provision of 2015.

To Doug Pruitt, the retired CEO of Sundt Construction, the cut didn’t make any sense.

“You have an incredible group of skilled craft workers who are leaving every day because (they’re) baby boomers, and they’re retiring,” he said. “They’re not being replaced because we’re not graduating carpenters and electricians and plumbers, et cetera, of any magnitude out of schools, and that’s where they used to come from.”

He said every penny the state allocates for career and technical education is worth it. He cited what has since become a familiar list of advocacy points for JTEDs: lower dropout rates, employable graduates.

The program also pays for itself by steering kids away from a life of welfare, unemployment, underemployment – or worse, incarceration, he said.

“The social cost of not addressing this is very expensive and non-productive. This lack of investment is also making Arizona and this country less competitive in the global economy,” he complained early in January, adding that the program needed more, not less financial support.

When lawmakers convened this January, a consensus had already emerged: It must be reversed. Gov. Doug Ducey initially offered a $10 million-a-year grant program, which legislators quickly rebuffed.

The governor eventually changed his mind and by the middle of February he had taken the extraordinary step of signing a budget restoration bill outside of the formal budget process.

Flynn, the owner of an electrical company, appreciated the funding restoration. But he also wondered why it was made in the first place.

“It was a fight… and it shouldn’t be,” he said. “When you’re driving down the road, who do you think is going to pave the road? When you’re driving an automobile, who’s going to fix (it)?”