Jim Kollaer's blog

I don’t know about you, but it seems to me that we are in “crazy time”, not only in politics, but also in the construction industry.  Makes me wonder whether they are linked.

The Associated General Contractors of America (AGC) report on the May 2012 construction job numbers show that over 50% of the 337 US Metro areas gained new jobs over the past year.  That is great news for the folks working in those metro areas.   At the same time, AGC reports that in the other half (48.7%) of the metro areas, jobs in the construction industry are still declining.  (You can see how your Metro is doing by referring to their List of Construction Employment by Metropolitan Area or Division, May 2011-May 2012.)

We recently reported that there are major shortages of skilled labor in Arizona and that there are thousands of jobs going unfilled in some other markets. [node:read-more:link]

The housing numbers came out last week and Bloomberg News reported on the shortages of skilled carpenters and construction workers in the hot, hot, hot Phoenix housing market.  According to the report penned by Bloomberg reporter Prashant Gopal, the housing market has improved from the crash and is now close to a three year high.

That improvement in the market combined with the passage of SB-1070, the Arizona immigration bill that sent a large number of undocumented workers back to their homes in Mexico, has created a skilled worker shortage that one contractor called a real “knife fight” for labor in the market. [node:read-more:link]

Peter Caulfield, a correspondent for the Journal of Commerce: Western Canada’s Construction Newspaper, wrote last week that owners of newly designed buildings are looking at innovative ways to get their buildings constructed as a result of a shortage of skilled labor in the industry.

Caulfield was reporting on a recent Building Owners and Managers Association of Manitoba (BOMA) luncheon where Michael Grimes, the director of business development for FWS Commercial Projects, Ltd. was a guest speaker.  Grimes lamented the high construction costs which he said is the result of a lack of skilled trades people.  According to the article, the cost of building an industrial warehouse in Winnipeg is $90 per square foot while the cost to build the same building in North Carolina is $35 per square foot.  Grimes asserted that this higher cost is due to the lack of available trades people at the sub-contractor level.  He stated:

“Due to all of the construction activity in Winnipeg, the demand for trades people has been exceeding supply for the last five years or so. ... You don’t save money by beating up on your sub-trades.  You save money by thinking outside the box.”   [node:read-more:link]

The employment numbers released this month were less than exciting, and we went looking for a broader view of those numbers for the construction industry so that we could put them into context.

Calculated Risk is a Finance and Economics blog produced by Bill McBride since 2005 and is listed as one of the Best Economics Blogs by the Wall Street Journal.  McBride has provided one of the clearest views on the industry and the unemployment figures that we have found.

A recent article entitled Employment Report Graphs: Construction, Duration of Unemployment and Diffusion Indexes gives us a long-term graphic view of the figures that BLS released June 1.  Looks to me like our industry employment figures are about the same [node:read-more:link]

I have recently come across a couple of interesting viewpoints on the world of work.

First, there is a new book authored by Susan Cain entitled Quiet: The Power of Introverts in a World That Can't Stop Talking.  In it she talks about being an introvert and how she has learned to cope with the extroverted world we live in.  She states that somewhere between 30% and 50% of the workforce are introverts who make enormous contributions to the world as we know it.  But, she explains how the current emphasis on extroverts has created education and working environments that do not provide for privacy or time to think for the introverts of the world.

This phenomenon, illustrated by Cain in her presentation to a TED 2012 group, can be found even in [node:read-more:link]

A recent press release from the Building and Construction Trades Department (BCTD) of the AFL-CIO announced “Labor Leaders Release Major Study About the Associated Building and Contractors, Exposing a Disinformation Campaign Designed to Undermine America's Labor Laws”.  The study, entitled  An Analysis of Associated Builders and Contractors (ABC) is an attack on the ABC for its anti-labor, anti-union lobbying and advocacy activities, and is another move by the unions to discredit the “open shop” approach of ABC.

The release cites the study authored by Dr. Thomas J. Kriger, professor of Labor Studies at the National Labor College, published by the BCTD, and underwritten by the AFL-CIO and Laborers’ International Union of North America (LIUNA).  In the press release, Kriger states:

“At a time when the construction industry is hurting and unemployment continues to be high, the ABC is spending millions a year to promote anti-union, anti-government policies that are putting America's workforce at risk.” [node:read-more:link]

The current job numbers are beginning to scare me a little.  The overall unemployment rate rose to 8.2 in the latest Bureau of Labor Statistics (BLS) numbers released June 1.

New jobs being created reached 69,000, but fell far short of the 150,000 that the economists had predicted.  Private industries added 82,000 jobs, but the public sector lost 13,000 jobs.

The construction industry numbers are somewhat confusing in that, according to the latest Associated Builders and Contractors (ABC) economic analysis, the construction industry lost 28,000 jobs in May while the unemployment dropped to 14.2% down from 14.3% in April and down from 16.3% in May of 2011.  This might be attributable to the fact that a number of unemployed construction workers [node:read-more:link]

This is the second in the series about the Construction Bandits and how they do business in a way that cheats many workers and ultimately you, the taxpayer.

An article by Karl Kiefer appeared in September of 2009 in NumbersUSA under Charles Breiterman’s blog which was entitled, Mixing the Mud: A Working Man’s Views on Illegal Immigration, Tricks of The Trade.  Immigration is not part of our discussion here, rather we wanted to illustrate how the Bandits in our industry get around the existing laws.  We want you to be aware of those illegal practices and we want you to join our efforts to create a more sustainable workforce for the industry.

Kiefer points out one way that the Bandits get around the insurance costs is to lie about the number of workers they have on their crews or to buy coverage for only one or two of their crew.  Conveniently, the “covered” workers are the only ones ever injured on the jobsite even though that is far from the truth.

Another way that they cheat is to misclassify the workers as independent contractors and to pay the workers’ wages with cash without paying taxes and unemployment (FUTA and SUTA).  When they don’t pay Federal or State income taxes, they are cheating us out of tax funds that the country desperately needs today.   [node:read-more:link]

The Construction Career Collaborative (C³) held their third update workshop in Houston in which they reported on their progress to date on this leading edge program to create a sustainable construction workforce.

The organization is in its early development phase and is in the midst of two major pilot construction projects being undertaken by Texas Children’s Hospital and the
MD Anderson Cancer Center.  These owners will require everyone on the jobsite to meet the C3 standards of financial security for the workforce, safety training, and craft training for the industry.  In essence, meet and exceed the existing labor laws for the industry, eliminate wage theft and misclassification, and minimize the “grey” economy that exists in many parts of the construction industry today.

Owners, general contractors, specialty subcontractors, and industry representatives [node:read-more:link]

While driving from San Antonio to Houston this week, I came up on two cars that seemed to be traveling slower than the rest of us, and they were swerving from their lane over into mine.  Usually when I run up on someone who acts like they might be drunk I speed up and go around them so that they don’t cause a problem.  This was unusual since there were two cars traveling almost in a caravan down I-10.

As I sped up and started by them, I noted a couple of things.  The driver of the first car was texting at 75 miles per hour and not exactly looking at the road.  That was scary enough but as I passed the second car, I saw something that looked like a video on a smartphone in the hands of the driver. [node:read-more:link]