Calling for Infrastructure Investment

By Carl Molesworth | September 28, 2010

Barack Obama starts work tomorrow as the 44th President of the United States. It will be a historic day, as Obama will become the first African-American to hold this nation's highest office.

Everyone's excited about the new infrastructure funding that he pledged to produce as part of his economic stimulus package, and well they should be.

The Associated General Contractors of America launched a new national effort in December designed to show broad support for needed new infrastructure investments. The effort is designed to make sure that new infrastructure funding helps create and preserve construction jobs and serve as a foundation for future economic growth, said Stephen Sandherr, AGC's chief executive officer.

The effort is necessary because the construction sector has been particularly hard hit by the economic challenges facing the nation. More than 770,000 construction workers have lost their jobs over the past two years, Sandherr noted, adding that without new infrastructure investments, countless more construction workers could lose their jobs next year.

Sandherr said that spending on new infrastructure would have significant, positive, long-term benefits for the U.S. economy. Cutting congestion, improving education and health care facilities, cleaning water supplies and improving levies will improve America's ability to compete globally.

John Horsley, executive director of the American Association of State Highway and Transportation Officials, zeroed in on transportation projects that are waiting tobe built.

"President-elect Barack Obama is pledging to put millions of Americans to work by building and repairing the nation's highways and bridges, and a new survey of state 'ready-to-go' transportation projects is the road map he needs to make it happen," Horsley said.

The District of Columbia and all 50 state Departments of Transportation responded to the survey. More than 5,000 projects worth $64 billion were identified. These transportation infrastructure projects are considered "ready to go" because they could be under contract within 180 days, supporting an estimated 1.8 million American jobs, if the funding were made available.

Who Will Do the Work?

But before we get too worked up about this, let's not forget a problem that was dogging the industry not long ago. That's the aging construction workforce and the difficulty recruiting younger people into the industry to replace them.

Maybe it will happen that as Americans find it increasingly difficult to find the kind of jobs that were abundant several years ago, more will turn to careers in construction instead. But even if that happens, they won't become fully functioning journeymen — much less superintendents or project manager — overnight. The industry needs to be ready to gear up its training programs to serve this influx of new workers — if in fact it materializes.

But what if it doesn't? What if young workers don't choose to follow the big federal bucks into construction? After all, this most recent downturn gave them yet another example of what, to me, is a major failing of the industry.

Look what happened just last October, when a Bureau of Labor Statistics report that showed the unemployment rate for construction workers jumped to 10.8 percent, losing 4,100 jobs during the month. By comparison, the national unemployment rate was 6.5 percent in October.

"Construction had — by far — the highest unemployment rate of any industry and the largest increase, up from 6.1 percent a year ago," noted Ken Simonson, AGC's economist. "The industry accounted for nearly half of the million-plus jobs lost throughout the economy in the past 12 months. Many of those losses have been in heavy and civil engineering construction — highways and other public work."

I've heard some people in construction actually look forward to occasional layoffs, but that wouldn't appeal to me.

If I were a young person considering my future, this would suggest to me that the construction industry tends to view workers as replaceable commodities rather than valuable investments. I would be very hesitant to choose the rigorous training and substantial time commitment required to become a journey level construction worker if I knew I would be at risk of finding myself in the unemployment line whenever the economy turned sour.

There is no easy answer for this. Obviously, a company can't carry employees for long if it doesn't have any work for them to do. Still, there has to be a way to break the boom-bust cycle for construction workers. Until we begin to address this problem, I think it will continue to be difficult to attract top-notch young people to the construction industry.