Mayor Sylvester Turner and City Council recently passed an ordinance encouraging apartment developers applying for tax incentives to provide workers with livable wages, offer affordable or workforce housing assistance, offer paid internships to low-income students, jobs to ex-cons re-entering the workforce and to create middle-skill jobs that don't require a college degree.
City leaders should be congratulated for taking a measured approach to encouraging new development while creating additional career opportunities in the skilled trades. But there is much more work to do if this story will become a true victory for the city of Houston, developers and individuals who work tirelessly building our community. For a number of complex reasons, the craft workforce in the commercial construction industry is unsustainable and inefficient. More craft workers are leaving the industry than joining it. Baby boomers are retiring and the industry is not attracting candidates quickly enough to replace them.
Some poor employment practices are to blame. Construction workers are too often designated as independent subcontractors - instead of employees - so that unethical companies can avoid employment taxes like Social Security, workers' compensation insurance and other traditional benefits.
An untrained workforce lacks the skills to deliver quality construction efficiently, causing the labor costs of construction projects to increase roughly 400 percent since the early 1980s while the hourly wage for craft workers has stayed pretty close to flat.
The root of the problem is the inherent nature of the construction business wherein a contractor must be the lowest bidder in order to win work. That's why many contractors have taken a "win work at all costs" approach best described as a "race to the bottom."
How do we fix this?
An organization of building owners, contractors, and trade associations has come up with an owner-driven strategy. The principles of the Construction Career Collaborative, or C3, are: financial security; health and well-being of the craft worker; safety training and craft training.
The way it works is straightforward: Owners of projects demand that contractors working for them follow the letter of the law and provide craft and safety training. Each company must pay its employees by the hour, compensate workers for overtime, provide workers' compensation insurance and designate those workers as employees instead of subcontractors. Each accredited company must also pledge to support the development, delivery and sustainability of craft training for the construction trades. The result is a vision that can be the "win-win" for everyone involved.
The skilled trades flourish when well-trained, experienced craftspeople populate the construction industry. Wages and benefits grow when highly skilled craftspeople efficiently produce top-quality work. Young people will be drawn to a fulfilling career in the craft trades once again alleviating the current craft workforce shortage. Job sites will be safer and construction companies will compete on a level playing field.
Owners will benefit from more compact construction schedules, higher quality and more sustainable buildings with longer life cycles which cost less to operate.
Owners already on board with the C3 mission include M.D. Anderson Cancer Center, Texas Children's Hospital, the Memorial Hermann Healthcare System, Jones Lang LaSalle Inc., Hines, the Museum of Fine Arts, Houston, the Greater Houston Partnership and the Archdiocese of Galveston-Houston.
We're also working with the GHP in its UpSkill Houston workforce initiative, the Texas Gulf Coast Workforce Board, the many community colleges in the region, and community-based organizations such as the United Way and Neighborhood Centers. We encourage owners and general contractors to join in this effort to improve the quality of construction and the rebuilding of the middle class with careers in the craft trades of the construction industry.
Tax abatements offered by the City of Houston can stimulate quality construction projects paying wages that support a middle-class lifestyle.
The Construction Career Collaborative invites the city to join us in promoting C3's principles on all construction funded by your tax dollars.
All of these ingredients will create a synergy attracting new companies to invest in this region because Houston is perceived as a thriving community with a robust workforce and, as a result, a great place to do business.