Impending Labor Shortage

[LEO2854]

There are people looking for a paycheck, many of the don't really want to have to work, and if they are employed bring that attitude with them.

Of course that is a issue, that fact is those types are being fed each day and have a roof over their heads somehow, so those types are looking for a free ride, indeed where those guys will end up is scary, to me, that is why I have the motivation to work hard and make it happen, just like everyone here.

But there are many who are not able to find a job in their chosen profession that pays enough to support their family's.

There is no labour shortage, however there is a shortage of employers who think that paying there men well will give them higher profits.

In January 1914 Henry Ford doubled wages for his employees, one reason was so that his employees could afford the product they produced, Indeed with all this talk of Labour shortages the lesson has been forgotten.

[h=3]In 1914, Henry Ford started an industrial revolution by more than doubling wages to $5 a day?a move that helped build the U.S. middle class and the modern economy. [/h] In 1913, to help meet the growing demand for the Model T, Henry Ford turned his attention to improving the manufacturing processes. The business model Ford developed?production on a grand scale, performed by well-paid workers?spread throughout the world and became the manufacturing standard for everything from vacuum sweepers to cars, and more.

[h=3]Transforming the Assembly Line[/h] The moving assembly line was perhaps Ford Motor Company's single greatest contribution to the automotive manufacturing process. First implemented at the Highland Park plant in Michigan, the new technique allowed individual workers to stay in one place and perform the same task repeatedly on multiple vehicles that passed by them.
The moving assembly line proved tremendously efficient, helping the company to far surpass the production levels of its competitors while making its vehicles more affordable.
[h=3]The $5-a-day Workday[/h] After the success of the moving assembly line, Henry Ford had another transformative idea: in January 1914, he startled the world by announcing that Ford Motor Company would pay $5 a day to its workers. The pay increase would also be accompanied by a shorter workday (from nine to eight hours). While this rate didn't automatically apply to every worker, it more than doubled the average autoworker's wage.
While Henry's primary objective was to reduce worker attrition?labor turnover from monotonous assembly line work was high?newspapers from all over the world reported the story as an extraordinary gesture of goodwill.
[h=3]Thousands of Workers Flock to Detroit[/h] After Ford?s announcement, thousands of prospective workers showed up at the Ford Motor Company employment office. People surged toward Detroit from the American South and the nations of Europe. As expected, employee turnover diminished. And, by creating an eight-hour day, Ford could run three shifts instead of two, increasing productivity.
Henry Ford had reasoned that since it was now possible to build inexpensive cars in volume, more of them could be sold if employees could afford to buy them. The $5 day helped better the lot of all American workers and contributed to the emergence of the American middle class. In the process, Henry Ford had changed manufacturing forever.

 

[Fulthrotl]

Most states are "employment at will". In the absence of a labor contract, they don't need a reason to terminate you.

interesting thread so far, and only one post deleted for strong labor views. cool.

my wife is a director of compensation for a fortune 500, so her perspective
on this is from a professional point of view. that industry obviously has done a ton
of research into compensation, and how many bananas will keep the monkeys happy,
before they screech, fling poo, and leave. over the years we've discussed it a fair bit.

the first problem is the job description. electricianeering is fairly well defined in that area.
manufacturing is a nightmare. once you have a description of the job classification, then
you can compare it with everyone else's, and see how close yours is. once you trim and
fit your apples and their oranges, you can classify them as a sort of fruit.

then you look at salary ranges. here is the part i found interesting. the goal is to pay at
the 50th percentile. paying 20% below that, and paying 20% above that both have the
same turnover rates. paying at the bottom of the range and the top of the range both
put you out of business, as at the bottom of the range you have no employees, and at
the top of the range, you have no money.

the 50th percentile is where you have the least turnover, and that is the goal of the
compensation department. most compensation analysts make a lot more than most
electricians.

so do a lot of people. most middle management folks tapping on keyboards and
talking on the phone pull $75 to $100k a year. most electricians don't make that.

the whole union vs. non union thing with sparkies is probably more fraught with
screaming fury than almost any other trade. and it's funny because they over time
have been as inseparable as steam and water in a pressure cooker.

the electricians union has traditionally provided training, classification, and structure
to a seasonal, semi migratory craft. and unions, going back 100 years in this country,
carved out their spot in the landscape by organizing the work, not the labor, in the
beginning. and a lot of it was done with violence way back when.

once unions had established this beachead, with setting prevailing wages, the unions
then set their sights on organizing all the labor, which they didn't need to do. if you
have work at a much higher wage, people will organize themselves around you.

but organizing the work is hard. organizing people is easier, so that is what organized
labor did, hence the name. they'd a done better if they were "organized work".

so while they were off busy organizing labor, they set a benchmark for electrical construction
that was easy as pie to shoot holes in. when you go to bid, and you know what your
oppositions hole card costs him to buy, it's pretty easy to take his work away.

and here's where the shortsightedness of labor nuked itself. when the bulk of work was
union, the prevailing wage was union, and it carried both itself and non union upwards.
both the labor compensation AND THE EMPLOYER PROFIT WERE HIGHER.
as the work shifted to non union, the prevailing wage became non union, and instead of
union wages upholding non union wages, non union wages held union wages down.
and with nothing to undercut, non union wages begin falling, pulling union wages with them.

the direction of compensation had reversed. it hasn't turned around yet, and it'll be a
while till it does.

so now, no matter what a contractor bids, there is someone else willing to underbid
him to take the job away from him. so the race to the bottom continues.

and it doesn't stop there. all the work going non union left buckets of skilled unemployed
union members, who then facing destitution from unemployment, pulled contractors licenses
and started undercutting the non union people who put their employers out of business,
accelerating the race to the bottom. this is accelerated by the fact that it doesn't take as
much to capitalize an electrical contractor as it does a lot of businesses.

in my geographic area, a survey done found that 45% of the union electricians had contractors
licenses on the side. this isn't meant to be a labor tirade post....

but the current situation for both employees and employers is going to continue in the direction
it is going until we quit seeing ourselves as separate from each other. the four way division
of point of view between union and non union and their respective employers has cost ALL
of us a bucketload of money.

that is the problem as i see it. there is a four way division of point of view, and it's a race to the
bottom.

 

[petersonra]

It is clear to me that there is a dearth of labor coming into the labor market, in at least some places. Look around and you see mostly 40-60 YO employees at many places. the layoffs mostly hit new and thus mostly younger employees, and few places are back to where they were 5 or 6 years ago, much less where they were 20 years ago.

last year I was told one of the larger companies here in town has over 2/3 or its employees eligible to retire in the next ten years. You want to talk about a nightmare? Try to replace thousands of skilled workers, technicians, engineers, and project people who work in a fairly narrow area, and get a whole new crew to mesh together in such a short time, especially when the management people are shifting on the fly as well.

 

[jmellc]

There is no such thing as a labor shortage. If you pay a good wage with good bennies you can find good help.

The other side of that is that the EC still has to compete with others paying less to their employees. Best I know is that most all contractors can get materials for about the same price per volume of material. Paying more expensive labor means having to go up on price; unless the labor force works harder/smarter and is more productive. I've seen some of this from both sides. Worked years for others, work for others now. Had a business for a few years and could hardly price work cheap enough, so much competition out there. I surely couldn't outpay other companies and still be in business. I had to shut down anyway and would have had to do so sooner if I was paying top dollar for help.

 

[iwire]

The other side of that is that the EC still has to compete with others paying less to their employees.

For sure I agree with you.

Now I understand paying high rates is problematic when you have to bid work against contractors paying less. The customer is usually not going to care or believe that your help is more talented and can do a better job. But that is a different issue than a labor shortage.

 

[qcroanoke]

For sure I agree with you.

About 3 tears ago I had a roof put on my house. (The lowest bidder got it)
If I had It to do again I would have went with one of the others. They cut every corner they could.
But low means go, till there is a price to pay.

 

[don_resqcapt19]

About 3 tears ago I had a roof put on my house. (The lowest bidder got it)
If I had It to do again I would have went with one of the others. They cut every corner they could.
But low means go, till there is a price to pay.

Even with a good set of specifications, like on a larger bid job, the same thing happens unless the owner pays for some type of construction inspector.

When I started that type of inspection was by the A/E design firm, but you don't see that too much anymore...mostly as a result of a court ruling in Illinois that made the A/E firm partly liable for job site safety if they do that type of inspection.

 

[ptonsparky]

We have been advertising for apprentice positions for the last two
weeks. Two applicants have had "years" of apprentice experience. Hmmmm.

At least they filled out apps. Four others with fewer years haven't bothered with more than a phone call.

 

[qcroanoke]

We have been advertising for apprentice positions for the last two
weeks. Two applicants have had "years" of apprentice experience. Hmmmm.

At least they filled out apps. Four others with fewer years haven't bothered with more than a phone call.

My son just started working for a local E.C. (despite my objections) He is really liking it right now and he has very little experience. (just what he took in high school)
The pay is ok and they do offer health insurance, life and dental. Paid holidays and vacation.
It is a lot different now than when I started.
If you didn't want to work something hot they didn't need you. Now if you do you will get fired if they catch you. They have lifts, we had scaffolding and extension ladders.
I'm hoping he continues to like the work because I did up until the point of the next job I was assigned was always more complicated and hurried and my wages didn't keep up and I decided I needed to get out of construction and do what I'm doing now.
Even then you just didn't see that many old electricians....

 

[cadpoint]

Tonights news stated 19% drop for ages 50 to 65 in construction.

Unrelated
Increase overall of 11% for employment in health care.

Age 50 to 65 - 9% increase of employment.
Ages 18 - 25 only .23% increase in employment.

 

[Nonsense]

well............

well............

I'm a union sparky. Our union is forecasting a 30% retirement within 10 years. We have a current new intake rate of 15%. That leaves a15% shortage in future labor.
There is a shortage of skilled labor in the future if not today. If kids today think that smashing buttons is their future. Then how do we train the next generation to build things? Or at the last, to repair what we've built today? I personally love going to work and getting dirty for a living. It helps that there's a new NFL stadium project currently ongoing. Sooooooooo it seems the problem is that people think labor is a dirt word. It doesn't matter if you put skilled in front of it. Symmantics and all. So if we just say electrician, plumber, roofer it mechanic. You may get past the initial reaction of ewwww laborer. Perception is a btch.

 

[OscarO]

I agree

I agree

There are other issues in the trades though. despite there being a wide range of skill, experience, and production, tradesmen are often paid much the same because they are considered to be interchangeable. unions encourage this thinking and as long as unions have a lot of the pricing power via various mechanisms, this won't change.

It is all but impossible to find a way to pay a superior wage to a superior employee these days. It is not just a union problem. Employers of all types have bought into the idea that an employee of type X and grade Y is worth $Z. Even in non-union companies there is often no more than 20% difference in pay between the worst and the best employee in a particular position.

I agree with you, I am one of those employees. I have my JW, and I make $22 and hour while the seventh year apprentice that knows as much as a second year makes $20.00. Why would anyone want to stay in the trade? It makes no sense. Not to mention I do three times more than the guy with more "experience".

 

[jmellc]

My son just started working for a local E.C. (despite my objections) He is really liking it right now and he has very little experience. (just what he took in high school)
The pay is ok and they do offer health insurance, life and dental. Paid holidays and vacation.
It is a lot different now than when I started.
If you didn't want to work something hot they didn't need you. Now if you do you will get fired if they catch you. They have lifts, we had scaffolding and extension ladders.
I'm hoping he continues to like the work because I did up until the point of the next job I was assigned was always more complicated and hurried and my wages didn't keep up and I decided I needed to get out of construction and do what I'm doing now.
Even then you just didn't see that many old electricians....

I have discouraged my children from going into this work other than as a summer job or such. I want them to know how but not to depend on it. Working for yourself or someone else, buying tools is expensive. Self employed, insurance is sky high and the market goes up/down/sideways at any given time. Regulation is burdensome, etc. Weather is always a factor too.

 

[kwired]

Well not everyone is cut out to earn Masters or Doctorate degrees either.

There are also some that earn them yet never land a six figure income.

Bottom line is if you don't like what you do - you probably are never going to be all that good at it, you will not be happy, it may cause you mental problems, and eventually you go out and do something stupid that maybe changes you and the life of your family and friends forever.

Some people have simple lower paying jobs, but are otherwise happy, don't have the stress and are doing just fine. If you don't worship money this becomes easier to do.

We do need doctors, high technology experts and others with high level education to do some jobs, but some people are cut out for it.

They don't make med school easy for a reason, not everyone is able to make it through. I know a couple people that did not make it, but pursued nursing careers instead, which still requires some smarts and certain skills.

 

[jmellc]

You said a lot there too. We should do what we enjoy doing, or at least what doesn't make us miserable. I've been there too.

What gets me is that while this has always been hard physical work, I mostly liked doing it and still do. The bad part is the over regulation and unstable markets we face now. I had my business 5 years and was pricing work cheaper than the last 2 guys I had worked for, but I still lost a lot of jobs because i "was too high". The market makes it hard to get work & over regulation takes the pleasure out of it and increases costs. Always more to pay out & less coming in, it seems.

The co. I work for now is fairly successful, been in business over 30 years and the family goes back to about the 1930's doing this work. But I hear from them about issues EC's of their size now face in collecting payments for "retainage & warranty", etc. Those are issues I never faced or heard of before.

Granted, the entire world is unstable at this point & maybe there is no such thing as a stable occupation any more. But I tell my daughters to find other carreers and always have a "plan B" such an a 2nd job, paying hobby, etc. I worked a few years in an entirely different business, life insurance, and saw entire companies fold up and merge, with hundreds of layoffs at a time or more.

 

[petersonra]

One of the trends that is inescapable is the trend toward less and less field work. The need for people to actually build things stick by stick as a building is erected is becoming less over time and that need will continue to decline.

 

[cadpoint]

We are at the near peak or just past the bell curve of the baby boom, this is in respects to who is getting ready to retire.

Now this can be looked at in certain ways, it just depends on how you look at the start and stop poinits when "the Baby Boomers"

There where more people born in 57' that are part of that curve and are within the ten year retirement age just posted.

We don't have the birth rate numbers or the present population to subtain our lifestyle!

 

[K8MHZ]

We are at the near peak or just past the bell curve of the baby boom, this is in respects to who is getting ready to retire.

Now this can be looked at in certain ways, it just depends on how you look at the start and stop poinits when "the Baby Boomers"

There where more people born in 57' that are part of that curve and are within the ten year retirement age just posted.

We don't have the birth rate numbers or the present population to subtain our lifestyle!

Uh oh....I was born in '57.

 

[xformer]

I have been of the mindset that in order for someone to be promoted there must be someone to replace me at my last position. I have read lots of good posts through this thread and agree that people are no longer wanting or willing to get their hands dirty. In my opinion, our nation as a whole has gotten fat and lazy. Everyone seeking the high paying office job (rat race). And there is only so many of those to go around. In the end, you have to find something that you get satisfaction out of that will pay you enough to meet the lifestyle you desire to live.

 

[PetrosA]

I have been of the mindset that in order for someone to be promoted there must be someone to replace me at my last position. I have read lots of good posts through this thread and agree that people are no longer wanting or willing to get their hands dirty. In my opinion, our nation as a whole has gotten fat and lazy. Everyone seeking the high paying office job (rat race). And there is only so many of those to go around. In the end, you have to find something that you get satisfaction out of that will pay you enough to meet the lifestyle you desire to live.

I often think back to when I started in this work after high school, so 1989 or so. I had worked for a local company for about two years. At the time I was paid $9.50/hr and had full health coverage, two weeks paid vacation and bonuses every Christmas. According to this website that would be the equivalent of $18.23/hr today. At the end of 2009 when I quit working for that company (with a 16 year break in there...) I was making $16.50/hr and had no health coverage, no paid vacation, and no bonuses. Other guys I know, good electricians with over ten years with their employer, are making $18.50/hr nowadays - so the same as what I earned in my second year after high school when adjusted for inflation.

It gets even more interesting when you compare the hourly rates from back then to now. That same company I worked for charged $25/hr to customers in 1989. Adjusted for inflation, that comes to $47.96 today. No one I know can send a guy out for $47.96 per hour, pay that guy $18-$20/hr, offer health benefits and paid vacation, plus cover workman's comp and their part of the taxes and remain in business today.

So there are huge disparities between inflation, costs of doing business and salaries/rates in just the last 20-25 years that are squeezing employees and customers alike. As a young person today, you would have to take into account whether or not your chosen career will give you a fighting chance at making it financially or not. I don't see our work as offering that option to too many young people nowadays.