State legislators in Iowa could enact “high-road” policies to encourage the private sector to meet the impending skilled construction worker shortage, according to a new Economic Commentary [PDF] by the Midwest Economic Policy Institute.
The construction industry has grown since the market crash of 2008, creating a high demand for Iowa workers. One survey found that 87 percent of contractors had difficulty finding workers to fill professional and craft worker position in 2015. Additionally, the construction and extraction industries in Iowa had a job vacancy rate of 3.6 percent in 2015. Many construction projects have been delayed due to the shortage of skilled workers and vacancies, driving up construction costs and postponing project completions.
Construction firms increasingly are demanding high skill levels from their new hires. Economic data reveals that contractors and construction employers are in fact hiring more-educated employees over recent years. From 2010 to 2014, three-fifths of all new construction jobs in Iowa were filled by a worker with more than a high school degree. By contrast, only 44 percent of those employed in Iowa’s construction industry in 2010 had achieved a level of education above the high school degree or equivalent.
At the same time that Iowa contractors are demanding more skilled construction workers, the industry is producing an inadequate supply of registered apprentices. 56 percent of respondent contractors said that they believed the training programs provided for new employees are “below average.” Economic research finds that those who graduate from apprenticeship programs earn higher wages, have consistent jobs, and are promoted sooner than those who were not enrolled and trained as an apprentice. In fact, over the course of his or her career, the average construction worker earns $123,906 more by participating in a registered apprenticeship program.
Registered apprentices comprised approximately 7.6 percent of the construction workforce in Iowa, while Minnesota’s apprentices comprised approximately 10.2 percent of the construction workforce – 2.6 percentage points higher than Iowa. The data indicates that Iowa contractors invest less in worker training than contractors in Minnesota.
In addition, inadequate training contributes to relatively high economic costs due to worker injuries and fatalities. There is a higher chance that worker injuries and fatalities will occur in Iowa than across the border in Illinois.
- Iowa had 2.2 workplace fatalities per 10,000 construction workers and 266 nonfatal injuries and illnesses per 10,000 full-time construction workers from 2011 to 2013.
- Illinois had 1.4 on-the-job fatalities per 10,000 construction workers and 156 nonfatal injuries per 10,000 full-time construction workers.
Iowa’s construction market is more dangerous and more costly to the state than neighboring states with stronger trade unions, more apprenticeship programs, and effective prevailing wage policies.
To foster a high-skilled construction workforce, the state should take steps to expand registered apprenticeship programs. A “high-road” approach that could be taken is for the state to support worker organizing, encourage the payment of fair share fees to trades unions, or enact a prevailing wage law. Each of these policy changes indirectly increases enrollment in– and private funding for– apprenticeship programs without expending additional taxpayer dollars.
If state legislators take these “high-road” actions to bolster training programs, the private marketplace can meet the demand for skilled construction workers.