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OP-ED: Gearing up for more growth in 2015

OP-ED: Gearing up for more growth in 2015

DJC300This column originally appeared in The Daily Journal of Commerce in Buildings Bridges and Roads
By: Mike Salsgiver

Mike SalsgiverOn the seventh anniversary of the start of the Great Recession, it is important to see how far we have come and the crucial investments that are needed to continue to move forward.

After suffering severe job losses during the recession, Oregon is now experiencing above-average job growth of 2.4 percent. The Portland area was the first to start adding jobs in 2010, and has grown steadily ever since. Once the recovery and job gains became more broad-based across the state, employment growth began to accelerate in 2013 and continued into 2014.

And yet, even with these improvements, one in five of the state’s counties – mostly rural ones – has yet to experience job growth. In general, Oregon’s largest population centers have fared best during the recovery. However, with public-sector payrolls stabilizing, rural communities began netting a few jobs over the past year.

Looking back on 2014, we can see that our industry as a whole is beginning to emerge from one of the darkest economic downturns in recent history and is finally on the upswing. As of last year, the average annual wage of a construction worker in Oregon was $51,852 – 16 percent more than all private-sector employees in the state. Over the past five years (from 2009–2014), we have seen a 10.6 percent increase in average construction wages across the state with specialty trade contractors seeing the highest increase over that time period at 16.1 percent.

In line with an increase in average annual wages, unemployment within Oregon’s construction industry fell by 0.8 percent over the past year while employment grew by over 7.5 percent. In the Portland-Vancouver, Wash.-Hillsboro metro areas alone, 1,700 jobs were added from November 2013 to November 2014 – nearly a 5 percent increase.

With 2015 already in high gear, Oregon’s construction industry has hit the ground running. Accounting for nearly 80,000 of the state’s non-farm employees, the construction industry makes up 4.6 percent of the state’s workforce and continues to grow.

From 2012–2020, the Oregon Employment Department predicts the construction industry will grow by over 15,000 new jobs. With 21 percent of the state’s construction industry over the age of 55, there are a large number of baby boomers reaching retirement age as well. When the number of baby boomers retiring are factored in with the need to add skilled workers to a growing industry, over 25,000 workers will be needed by the year 2020. That approaches a net growth of over 26 percent. With construction companies facing more retirements and a lack of skilled workers than ever before, wages will continue to increase as those skills become more and more essential.

This very apparent need to add more skilled workers to our industry highlights an issue that will be a focus of AGC’s efforts at the legislative level when the “long” 2015 session begins in just a few short weeks: a very shallow pool from which to hire these highly-skilled workers. Contractors know that quality and comprehensive craft training is fundamental to the development of a skilled workforce. In turn, a skilled workforce is essential to a productive and sustainable construction industry as it climbs its way out of this recession.

Over the years and since 2008, over 50 percent of Oregon career and technical education (CTE) programs have disappeared from public schools. As these programs disappeared, Oregon’s high school graduation rate plummeted to a staggering 68 percent. In the Portland area, dropout rates are approaching 50 percent. While there are multiple reasons for such high dropout rates, there can be no question that one clear reason is the lack of an education path for students who are looking for something other than college.

To a recovering state and an industry that relies so heavily on this education pipeline for skilled work, these conditions are simply unacceptable. CTE programs hold untapped potential as an economic and education strategy in strengthening our workforce and Oregon’s economy by preparing students for both college and careers. Because of this, AGC and a broad range of coalitions will focus on continuing the work we started with the first CTE grants in 2011 by working to secure a permanent and sustainable investment in career and technical education throughout the 2015 legislative session.

As well as working for CTE investments, AGC will continue working for commonsense solutions to the challenges facing our industry and its workforce. As we have seen coming out of this recession, highly-skilled workers are needed and rewarded – when the work is there. As our state begins bouncing back, the effects of the lack of a viable, long-term transportation funding package are being felt.

The short-term fixes that were passed at the federal level last year failed to produce the predictability our contractors need to bid for work and actually build projects. As the federal faucet stopped flowing, so too did long-term state and local transportation planning programs, such as Oregon’s Surface Transportation Investment Program (STIP). Because of uncertainty about available federal funds, state and local planning work was suspended. This suspension has halted the ability to get work into the pipeline, has further added to the nearly $12 billion backlog in work, and has even forced a number of contractors to close their doors or look outside Oregon for work.

AGC is hopeful that this Legislature is able to see that essential investments in transportation – and more broadly, infrastructure – are desperately needed across the state. As the official start of the session approaches, we will continue to push an agenda that focuses on growing the economy and producing jobs.

Our industry has time and again demonstrated resilience in the face of incredibly difficult economic times. Now, all eyes are on Feb. 2, when the 2015 Legislature convenes and begins to shape the Oregon of the future.

Mike Salsgiver is the executive director of Associated General Contractors’ Oregon-Columbia chapter. Contact him at 503-685-8305 or mikes@agc-oregon.org.

To view the column online, please click here (DJC subscription required).

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