The labor situation in Houston is heading into the biggest crisis we have ever seen. For decades, our industry has relied on an immigrant labor force that, prior to 9/11, could cross our borders with very little problem. That all changed after that tragic day and now crossing the border can be extremely expensive as well as dangerous.
After the subprime mess and the fall out, many in the construction industry found that the jobs they once took for granted were gone. Many returned to their native countries while others changed jobs, usually accepting less pay and fewer opportunities. Contractors were pressured to lay off employees and hire “contract labor” to try to compete for a much smaller volume of work.
With the failure of government agencies to uniformly enforce wage and hour laws, many “contract” workers paid no payroll taxes, overtime, or costs of workers’ compensation insurance. This gave them a tremendous cost advantage that ultimately led to lower wages throughout the industry. When work volume fell by over 50 percent, the number of workers tumbled as well.
Now we see an incredible rebound in the Texas economy. The new energy boom and pent-up demand means the need for workers is greater than ever. As housing starts to increase, the residential industry is seeing shortages in every trade. In commercial construction, the need for workers is first being felt by the underground and concrete trades. The other trades will feel the pain as work continues to ramp up.
Where will we find the workers? Is the border really secure? Will the workers come from other states where slower economies and tough immigration laws are forcing them out? The answer is probably a mix of all of these. But, the volume of work on the horizon will create more demand than our existing labor force can handle. Wages and benefits are lacking so people don’t feel there’s a real career for them, just a job.
We can come together to change the way our industry has been degraded over the last 30 years. Wages from the 1980s until now have been flat and in some cases have actually decreased. Supply of labor almost always exceeded demand. That will no longer be the case because of our immigration laws and Department of Homeland Security enforcement. Nor should it be.
It's time for the construction industry to get serious about finding ways to attract kids into the skilled trades. For many who might otherwise end up in dead-end jobs, we can offer a chance at a real career. Thousands of young men and women who are dropping out of high school could instead be on a path to making a great living in construction.
To attract young men and women to the trades we must offer an hourly wage with a career path. As we continue to feel increased pain because of the labor shortage, the true reasons for taking this approach will become more evident every day. The current practice by many of offering “contract” work with the burden of taxes being on the worker will not work in the current and future environment. It's time for trade employers to be employers! Recruit, train, pay a fair wage with taxes, and provide that all-important career path! Why wait? Let’s get started now.