February 2, 2007 Volume 108 Number 3

Facing the coming labor shortage

By DON McINTOSH, Associate Editor

Oregon’s business community is sounding an alarm about a looming shortage in skilled labor, but it’s not clear to what extent government efforts in “workforce development” will be able to solve the problem. Oregon unions, for their part, have been eager and willing to partner in efforts to improve worker skills, but feel like they too often get left out of plans for workforce training.

Demographics is the number one reason a labor shortage is expected — the baby boom generation becomes eligible to retire in the next five to 15 years. That will likely mean greater competition for skilled workers by employers throughout the economy — construction, high tech, health care, the public sector, even manufacturing.

That last, the notion of a labor shortage in manufacturing, seems to go against conventional wisdom: Hasn’t manufacturing taken a beating in Oregon and the rest of the country, losing jobs to foreign competition and corporate outsourcing?

The short answer is, “Yes.”

According to the Oregon Employment Department, statewide manufacturing employment peaked in 1998 at 227,000, declined in the 2000-2003 recession, and has been flat since then.

State economists think it will account for 205,500 jobs in 2014, about the same number as the end of 2006. But such numbers hide the reality of turnover and changing skills requirements. Even in an industry with a declining workforce, workers retire or change jobs and need to be replaced. And computerization and mechanization, which contribute to job loss, at the same time require that remaining workers have higher-level skills.

“New technologies are really changing the workplace,” said Lita Colligan, workforce policy adviser to Governor Ted Kulongoski, “and with baby boomers retiring in the next few years, we don’t have a pipeline of skilled workers to take those jobs.”

That’s the message State Rep. Brad Witt has been hearing, loudly. Witt, who served 14 years as secretary-treasurer of the Oregon AFL-CIO, became chair of the House Workforce and Economic Development Committee at the beginning of the year. His committee held several weeks of hearings in January to listen to business and labor about what the Legislature could do to increase family-wage jobs in Oregon.

“Not one witness didn’t say we’re headed for a train wreck in 10 or 15 years,” Witt said.

The culprits most often fingered are culture and school: A shift in culture has made young people less interested in technical occupations, and the K-12 school system isn’t steering students toward skilled trades careers.

Some labor leaders expect to see the business community clamor for more tax dollars to pay for their workforce training needs. That’s the chorus Bob Shiprack, executive secretary of the Oregon State Building and Construction Trades Council, says he’s heard from business leaders.

“The people that complain the most about not being able to find skilled people are the ones who don’t pay them what they’re worth,” Shiprack said. “What drives me crazy is that they’re doing nothing about this supposed labor shortage except asking the taxpayer to give them subsidies to train their workers.”

Meanwhile, union training programs, which operate without tax dollars, struggle for recognition. Oregon AFL-CIO President Tom Chamberlain says the state workforce training system too often overlooks union apprenticeship programs, and invests in redundant programs at community colleges.

And sometimes, the shortage is quite plainly due to a lack of employer commitment to train the workers they’ll later need.

At some local electric utilities, heavy overtime — in some cases over 600 hours a year — is an early symptom of a labor shortage among journeyman linemen. Travis Eri, business manager of IBEW Local 125, says over 40 percent of his membership — mostly utility workers — will be eligible to retire in the next five years. It takes three and a half years of apprenticeship to become a journeyman lineman, but journeymen average $33 an hour, so for many apprentice openings, over a hundred people apply.

In the past, utilities didn’t skimp on training, but Eri thinks this has changed at large investor-owned utilities, where understaffing may be a strategy to boost short-term profits. The worst offender is currently PacifiCorp, which cut its apprentice training program after it was bought by Warren Buffett’s Mid-American Energy Holdings Company. Previously-hired apprentices will continue in their training, but PacifiCorp said it will hire no new apprentices in 2007.

But Witt said he hears from many good employers who are planning for the future and are willing to commit their own resources, and still want government to help, at least by maximizing the use of resources already being spent.

Witt expects his committee will support a set of ideas being proposed by the governor.

Those include:

  • Making an Oregon high school diploma a thing of value to employers, by ensuring that it means competence in core skills like reading, math and science, as well as problem solving, communication ability and teamwork;
  • Helping to create industry consortiums (clusters of businesses in the same overall market that require workers with similar skills) that could forecast their collective workforce needs instead of waiting and then raiding each other’s workers;
  • Identifying high-skill, high-demand occupations, and then giving training grants to individuals willing to work in those jobs, with those currently on public assistance getting priority;
  • Making it easier to get information about the necessary pathways to high-wage careers; and
  • Better linking K-12 education to workforce needs.

That last idea is something unions have been asking for for years.

“There is a lack of vocational education in high schools today,” Shiprack said. “I had shop class in grade school, and four years of it in Marshall [High School].”

“There was a real tie between blue- collar jobs and education when I was in school,” Chamberlain, a firefighter, adds. “Now, we know that there’s an attitude in our K-12 system that pushes kids toward college, whether they end up there or not.”

And the problem is, union officials say, an exclusive focus on college prep doesn’t well serve the three-quarters of high school graduates who don’t go on to college.

Witt calls it the lost decade: “Union apprentice programs say the average age of their applicants is late 20s. These young people banged around in low-skilled jobs for 10 years before finding their way to a career track.”

Last October, one local union made its own attempt to expose young people to the skilled trades “pipeline.”

Tualatin-based Plumbers and Steamfitters Local 290, foreseeing rising demand for their trade as new energy facilities break ground in coming years, wrote to the superintendents of the Wilsonville, Tigard-Tualatin and Sherwood school districts and offered them the use of their multimillion-dollar state-of-the-art training center, to help students understand how the math and science and grammar they study could help them win entry into lucrative and worthwhile careers. There would be no charge to the district, and the union would even pay for the “consumables” — acetylene oxygen, etc.

“Our journeymen make over $30 an hour on the check, and have a total wage and benefit package of $50 an hour,” said Local 290 Business Manager John Endicott. “That’s not a bad living. And our apprenticeship program means they earn while they learn.”

Local 290 got no response to its invitation. The union followed up with letters to the board members of the districts, with the same offer. Still no response. The union is pretty steamed about the brush-off, but union officials are trying to stay positive and plan to attend board meetings in the near future to continue the outreach.

“Skilled labor has sort of fallen out of fashion in school,” said Norm Eder, executive director of Manufacturing 21, a workforce training advocacy group made up of manufacturers, community colleges and the Oregon AFL-CIO. “Teachers and high school counselors are themselves doing a different kind of labor, and don’t necessarily tell students that there are fabulous careers in the skilled trades.”

Eder’s group hopes to change that, and last year kicked off a pilot project in Clackamas County called “Manufacturing Road Trip.” Teachers and counselors were given tours of local manufacturing operations, and heard from human resources people about the growing skills shortage.

Eder acknowledges there’s another side to the culture shift: Manufacturing has a serious image problem. Young people don’t think manufacturing is a stable and rewarding career direction, and mass layoffs like the 800 announced by Freightliner Jan. 26 only add to the perception it’s a doomed, shrinking sector.

That’s one of the themes Witt heard from Bob Baugh, head of the national AFL-CIO’s Industrial Union Council, who came to testify at a Jan. 19 hearing of Witt’s Workforce Committee.

“Neoconservative economists want to tell you, ‘Don’t worry about job loss, don’t worry about what’s happening in manufacturing,’ ” said Baugh, a former secretary-treasurer of the Oregon AFL-CIO. “It’s really the fault of the worker. They just need to get smarter. They just need more training and education.’”

“I support training and education,” Baugh continued. “I want our workforce to have the greatest skills in the world. But it’s like giving your kid swimming lessons, getting their swimsuit on and saying ‘Now go jump in the pool,’ but nobody’s paying attention to see that the drains are unplugged and the water’s going down.”

Oregon may be an exception, Eder says, with a stronger, more competitive manufacturing sector than many states. But either way, if there’s one thing all sides can agree on, it’s that relentless hype about the “information economy” has drowned out voices arguing for the continued importance of building and making things.

Makers and builders hope to regain their voice this legislative session, and may work with organized labor to produce the needed cultural shift.

“There’s this impression that if it’s not college track, it’s second class,” Witt said. “But we need to have the highest level of skills for tradespeople as well.”

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