Wednesday, November 30, 2016

Millennials Unprepared for Skilled Labor Opportunities in Modular Construction

You’re a modular home builder or the Human Resource Director at a modular home factory and need to find skilled labor to keep your business operating smoothly. It used to be that all you had to do was call the employment office or place a help wanted notice in the newspaper and Voila!....applicants.

Wait a minute, that was what you did 10 years ago but not today. The skilled labor pool is aging and most have settled into a very comfortable life of full time employment. The workers that were in their late fifties and early sixties have begun to retire.

So where is the new pool of skilled labor needed by the modular housing industry?

Probably sleeping in late in their parent’s basement. Millennials, those currently between the ages of 18 and 32 have little or no interest in doing “hands on” skilled labor. High paying construction jobs are waiting for them if they could just become self motivated enough to learn how to do them.

Millennials are the most educated generation ever, but it’s taking a lot longer for them to launch their careers. What is worrisome is that many of them blame older workers still on the job; that they’re not crowding them out of the good jobs. That’s simply not true or there wouldn’t be a labor shortage.

The lockstep march from school to work and then onto retirement no longer applies to Millennials. Long-term structural economic changes have created a new phase in the transition from youth dependency to adult independence.

Millennials are launching their careers later and taking longer to get traction in careers that pay a living wage. It now takes the average young worker until age 30 to reach the middle of the wage distribution; young workers in 1980 reached the same point at age 26. Young adults’ labor force participation rate is down to its 1972 level, after 40 years of growth between 1950 and 1990.

Young men have experienced the most substantial setbacks. As their access to blue-collar occupations has declined over the past 30 years, they have been left either unable to find work or are increasingly likely to work in food, personal service, sales and office support occupations that often pay low wages. In 1980, young men earned 85 percent of the average wage in the labor market; today, they earn only 58 percent of the average wage.

The enormous declines for young men are due in part to their failure to keep up with the growing skill premium in the labor market relative to young women. Young women began enrolling in college and earning college degrees at higher rates than men in the 1990s, and the gender gap has widened in the years since.

The Housing Recession of 2007-08 had a disproportionate impact on young adults: although 18- to 29-year-olds represent only 23 percent of the workforce, they represent 36 percent of the unemployed.

Young men with only a high school education were the most vulnerable through the last decade, and continue to struggle. Between 2000 and 2012, the full-time employment rate fell from 80 percent to 65 percent for young men.

It’s not about Millennials’ culture or work ethic. They have been shielded by their parents, their teachers and their even peers from learning manual skilled labor, which usually pays a lot more than working at Starbucks. Vo-Tech schools in many states are being repurposed as incubator schools for music and art, software and app program and other speciality fields.

For older adults, the long-term trends are more encouraging. Life expectancy at age 65 has increased and health outcomes have generally improved. Older adults’ employment rate, wages, income and wealth levels have risen over the past three decades, especially for college-educated adults. Many of these older adults have also shifted out of blue-collar occupations into high-paying managerial or professional office, STEM, and healthcare professional and technical occupations.

You would think the Millennials would be rushing in to fill these empty slots but are not as they have never been expected to do manual labor.

In the end, young adults need more education and training — something the U.S. post-secondary system seems curiously bad at delivering.

The labor shortage isn’t that there are not enough people to fill the slots, it’s because we have raised a generation that has not been exposed to manual labor, are untrained for it and have been told they will be looked down on if they ‘settle’ for production work.

Breaking this attitude will not be easy.


Sonnebrille said...

Somebody has a very narrow mindset of millennials.
In the closer to 30 year old area of the millennials, most go to college, for a certain trade or something else, and come out with 30 to upwards of 100 thousand in debt, something most young workers did not have to deal with in 1980.
Especially in the modular industry, I've seen its harder for the older generation to teach the younger generation because they fear they will be replaced by the younger ones they are teaching.
That being said, at our plant we do go through a lot of younger workers with only a High School diploma or less that leave after a few months because of low pay or those older skilled laborers have made it impossible to advance on the floor of the plant.
You can't blanket cover the issue and say millennials are lazy and not driven to work.

Coach said...

I don't want to give the impression that Millennials are lazy. On the contrary, I find them full of energy. They have varied interests and usually explore each to the fullest.
What I do see after almost 70 years on this earth is a lack of their wanting to 'settle' for a manual labor job when they have been encouraged their entire lives to reach for the stars both socially and economically and that doesn't include working with their hands on a production line.
If a factory is going through young workers simply because the older ones are afraid of losing their jobs, then one can reason that either the older worker is worried the young people will expose their bad work habits or that the factory actually allows and possibly encourages this behavior.

Unknown said...

I asked myself once: "when my Dad was my age, did his Dad say he was lazy?" Maybe, maybe not.
Oh that's right grandfather's generation was in WII...
420,000(+/-) military deaths, in a time when the US population was roughly 130 million... I imagine that made a great many boys turn in to men early in life, left a lot of jobs...
Interestingly enough my Dad, as well as many of my friend's Dads' are making the nearly thesame wages they made in the early 90's.
Additionally: an entry level modular working makes around $12 per hr, no way in hell you raise a family on that.
Final thought: i feel like you are suggesting to do it the hard way, because it's "old school". Which in my mind is like saying, "put down the nail gun, and pick up a hammer" ...
Not bashing you Gary. I appreciate the articles, and I know this isn't aimed at all millenials.

Coach said...

Jay, I completely agree with you that it looks like I'm suggesting doing it the hard way. Nobody can raise a family on $12 an hour.

What would happen if factories began using the talents the Millennials can bring to the production line? Automation, CNC, computerized workstations, Etc.

If a team of them were let loose in a factory to observe how we build homes, I wonder what kind of wonderful and cost savings processes they could create. Then they would be worth more than $12 an hour. $18+ would be achieved with their innovations and designs. They have grown up with this type of stuff, why not give them a chance.

The real problem is that nobody is showing them the 'hard' labor is not the same as 'hard' work and dedication.

Anonymous said...

There is an easy way??