Rebuilding the Pipeline: Supply and Demand in the Skilled TradesJanuary 17, 2018 When workforce analysts meet with businesses these days, labor shortages are usually the first topic of conversation. Across the country unemployment has neared record lows, workers are less likely to move across state lines to find work, and the workforce is aging. All of these factors make finding and retaining quality workers a different game than during the Great Recession.
Certain kinds of employers tend to have the most panic in their voice when they describe their workforce needs. Over most of the state, the manufacturers, construction companies, and other businesses that rely on skilled tradespeople sound particularly anxious. They worry that they face additional hurdles when recruiting for these vital yet underappreciated roles.
They may have a point. There’s a general recognition that the push towards “college for all” drove the elimination of vocational programs introducing young people to trades and had unanticipated consequences for the economy and workers. It’s the type of gap that can’t be fixed overnight, and even high wages and plentiful jobs aren’t always enough to overcome the gap in the perception of skilled trade job opportunities.
What Is a Skilled Trade?
In general, a skilled trade is an occupation requiring a particular set of abilities rather than general labor, with some post-high school training or licensure but not necessarily a bachelor’s degree needed for entry. Skilled trades are most commonly associated with the construction or manufacturing sectors. Examples include carpenters, electricians, and plumbers, each of which deals with a specialized aspect of the construction process.
There is no definitive list of skilled trades. Skilled trade occupations could include mechanics of particular types of machines or engines, heavy truck drivers, or any job requiring some vocational training or an apprenticeship. A broader definition might include air traffic controllers, phlebotomists or software developers: jobs that require more than general decision-making or lifting strength and focused on a particular toolbox of approaches to specific technical problems.
For the purposes of our analysis, I am focusing on a subset of traditional skilled trades in goods-producing industries. Included is a list of all apprenticeable trades from the Oregon Bureau of Labor and Industries Apprenticeship and Training Division (ATD). Covering manufacturing, construction, and utilities, these occupations tend to have well-established paths for formal apprenticeship.
An apprenticeship is a registered training program that allows trainees to earn a wage while learning trade skills. If you’d like to know more about apprenticeship opportunities please visit the ATD website to find information on the types of apprenticeships and who to contact in your area.
Grandpa (Is) a Carpenter: Demand for Skilled Trades
The aging of the trades workforce will open up opportunities for new employees as workers retire, even without taking into account future industry growth. Like many areas of the economy, construction and manufacturing have a greater percentage of workers at or near retirement age than they historically have had. In 2016, both industries were near the state average of 23 percent of the workforce aged 55 or older.
On top of these demographic changes, the construction and manufacturing industries are also recovering from a housing-based recession that drove workers to other fields. The combination of accelerating growth and reduction in the immediately available workforce creates particular strain on businesses.
Construction has been one of the fastest growing industries in Oregon in recent years, with hiring needs across the workforce. Media reports such as this article from the Oregonian document the difficulty of hiring skilled construction workers to match recent demand, often with rippling effects throughout the industry and housing market.
Manufacturing employment has grown in recent years as well, and although the industry has yet to reach its pre-recession peak, hiring skilled tradespeople is a major pain point for many manufacturers. The Oregon Employment Department (OED) produces Occupational Prioritization for Training to help workforce areas invest in promising fields with strong recent demand, wages, and expected growth, among other factors. Several skilled manufacturing trades, such as industrial machinery mechanics, CNC operators, electricians, and machinists show up near the top of the list, indicating an intersection between current business needs and worker opportunity.
Statewide, trades commanded high wages relative to the rest of the economy. The table above compares the median hourly wage in 2017 of 30 trade occupations for which apprenticeships are available. Four out of five of these trades paid above the median wage for the state, and several paid more than double the median.
Further evidence of business demand comes from the OED Job Vacancy Survey. Every year the Employment Department surveys businesses on their job vacancies and difficulty filling them. In the tight overall labor market in 2016, 64 percent of jobs were difficult for employers to fill. Some skilled trades exceeded even that high bar: several trades had over 90 percent of openings considered difficult to fill.
Trading Up: The Supply of Skilled Trades Workers
If truck drivers, plumbers, and mechanics are in such high demand, how well is the market responding by graduating new tradespeople?
One way to look at how supply and demand match up is to compare the expected number of openings to the number of new graduates who qualify for the openings. This table shows total completers of certain trades training programs in 2015 (the most recent data available) and compares that number to the average annual demand projected in OED’s Occupation Employment Projections from 2014-2024.
There are several limits to what this data can tell us. It is difficult to measure how supply matches up with demand, especially looking only at this one-year snapshot. Economic trends vary considerably each year and even during the year. People also take on different jobs than what they trained for, or take paths in their training that don’t show up in program completions.
In general, though, it looks like some trades are ahead of others in keeping up with demand. Established postsecondary and apprenticeship programs seem to be paying off. One trade with more graduates than projected openings, electricians, graduated more than 250 apprentices in 2015. Other programs with positive numbers like machinists and diesel mechanics have established programs across a number of Oregon’s community college campuses.
Although by no means the final word, there’s some evidence from this analysis that Oregon may not be producing enough new carpenters, industrial machinery mechanics, or operating engineers. The next step before drawing conclusions about training needs would be to take a closer look at what the market demands in terms of experience to fill those specific roles.
For example, the vast majority of positions in some occupations (such as electricians) require journey-level workers who have completed a registered apprenticeship. We can track that pathway pretty well. It’s harder to say for certain that there is a training gap in some other trades like carpenters, operating engineers, or sheet metal workers because they have less strict career entry pathways. What appears to be a large gap is partially covered by hires who came to the field by other means not captured in the table.
Should we interpret the positive numbers as evidence that Oregon is producing too many graduates in certain trades? Not necessarily. Take diesel mechanics: given that 90 percent of these positions in 2016 were difficult to fill, there’s likely still a lot of built-up demand to be met by new graduates in the field. In addition, demand projections are average annual numbers over the decade. Employment may grow more than this amount during high growth years.
When it comes to making an individual career decision, you should always consider your interest and skills in conjunction with career viability and likely earnings. Looking at the balance of evidence, though, it is clear that there are a number of highly paid and in-demand careers available in the trades.
A Brave New World for Trades Training
The discussion around skilled trades is changing, albeit too slowly for some. In the last several years, there has been greater appetite for emulating the apprenticeship systems of countries like Germany. Formal on-the-job training has expanded to other fields, such as IT and health care: as just one example, a new program in Lane County will apply the “earn as you learn” model to apprentices in the technology field. The expanding discussion about apprenticeships in America is one part of re-energizing people about trade education and employment.
Concerns like limiting college debt and finding fulfilling work are increasingly central to our career decisions. In that context, it’s hard to ignore skilled trades, where you can get paid for learning and become part of a proud tradition of craftsmanship.
There’s still work to be done. Businesses cite parent, teacher, and guidance counselors’ fear and unfamiliarity with the industry as a deterrent to young people considering the trades. Although some will come around if the cost of college continues to rise, lasting change will require a further step. A true rebuilding of the pipeline requires broader recognition that trades can be a fulfilling and lucrative career opportunity on their own terms.