Saturday, February 17, 2018

Labor Shortage in the “New Inner City”

Offsite construction has a labor shortage problem. Whether it's modular, manufactured, panelized or one of the other myriad of new ways to build a house, the offsite construction industry simply can’t find enough people to work.

Most modular and manufactured housing factories are located in rural areas where often generation after generation worked side by side producing homes. Those days are long gone.

The young people that once knew they could get a job at the local factory are now choosing to leave the small town environment they grew up in and are off to college or the military where they will see opportunities not available back home.

The Wall Street Journal called small towns in rural America the “New Inner City”.

Starting in the 1980s, the nation’s basket cases were its urban areas—where a toxic stew of crime, drugs and suburban flight conspired to make large cities the slowest-growing and most troubled places.

Today, however, a Wall Street Journal analysis shows that by many key measures of socioeconomic well-being, those charts have flipped. In terms of poverty, college attainment, teenage births, divorce, death rates from heart disease and cancer, reliance on federal disability insurance and male labor-force participation, rural counties now rank the worst among the four major U.S. population groupings (the others are big cities, suburbs and medium or small metro areas).

In fact, the total rural population—accounting for births, deaths and migration—has declined for five straight years.

Just two decades ago, the onset of new technologies, in particular the internet, promised to boost the fortunes of rural areas by allowing more people to work from anywhere and freeing companies to expand and invest outside metropolitan areas. Those gains never materialized.

As jobs in manufacturing and agriculture continue to vanish, America’s heartland faces a larger, more existential crisis. Some economists now believe that a modern nation is richer when economic activity is concentrated in cities.

There is an even deeper reason that people are leaving good jobs in rural areas and moving closer to large cities. Larger paychecks.

An example of this can be found at a lot of fast food restaurants and convenience stores right in your town. They need workers just as badly as the factory does but they are willing to pay wages that rival and sometimes exceed what a modular or manufactured housing pays.

In my town of 40,000, local stores have signs posted for wages unheard of before. The Aldi Supermarket has a help wanted sign with wages for part time clerk/stockers of almost $20 an hour plus benefits. Two large convenience store chains in town are paying $14 an hour to run cash register.

Factories and huge warehouses in the area usually offer a starting wage of $12 an hour plus benefits. A local sheet metal fabrication plant is offering $18 an hour after a 1,000 hour training program at $14 an hour. Still has the help wanted sign on thier building.

Add to this the opioid drug problems facing small towns, the lack of skilled labor education in high schools and the push by almost every parent to send their child to college and you’ve got a labor shortage.

Even if a factory can get someone that’s either qualified to work there or is willing to go through an apprenticeship, a majority of these new hires don’t make it past the first two weeks. They don’t show up for work or they don’t pass a random drug test.

There doesn’t seem to be an easy solution for this problem so maybe it’s time for the offsite industry to begin taking a tougher approach to lessening the labor shortage.

Offsite Construction businesses coming together and putting some real workable ideas on the table is the first step. Then agreeing to implement some of them is the next step. Will it mean raising prices?

One thing is certain, without a continuous supply of skilled labor willing to work and stay in rural America, the offsite industry could be facing a future where high tech and robotics will be our only choice.

Modcoach note: I’ve added this video not to show how spoiled the Millennial generation is perceived to be; I simply found it hilarious!

1 comment:

Doug Stimpson said...

Could not be more spot on.