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Business and Economy

Contractors Have A Tough Time Finding Experienced Workers


NPR's business news starts with an oil boom and a labor shortage.

As we reported on this program, new methods of drilling have created a huge boost to domestic oil and gas production. In energy producing states like Texas, that has led to a big rise in commercial construction. So builders are finding it hard to get skilled workers they need to keep up demand.

From Houston Public Media, Andrew Schneider reports.


ANDREW SCHNEIDER, BYLINE: Chevron Phillips Chemical is building a new plant here in Baytown, Texas, just outside Houston, as well as another 80 miles southwest in Old Ocean. The company estimates its contractors will need to hire 10,000 construction workers in order to complete the plants on schedule in 2017. Peter Cella is Chevron Phillips' president and CEO.

PETER CELLA: The single biggest constraint is the shortage of skilled labor. We need welders, we need pipefitters, we need riggers, electricians, to help construct all these assets that have been announced by my company and others.

SCHNEIDER: The shortage of skilled workers is slowing the construction of everything from factories to office buildings - and driving up costs in the process. The housing crash and the Great Recession that followed cost 1.3 million such workers their jobs, fewer than half a million have returned. Ken Simonson is chief economist for the Associated General Contractors of America.

KEN SIMONSON: It's really getting tough for many contractors to find experienced workers, because so many of the ones who had been laid off have now moved on to other industries or have retired.

SCHNEIDER: One of the main industries that those workers flocked to in Texas was the oil and gas sector. Building contractors are having a tough time luring them back.


SCHNEIDER: As a long-term solution, companies are investing in vocational training programs at secondary schools and community colleges. They're also collaborating with unions, who are looking to build up their ranks. Don Booth is a welder/pipefitter, and a third-generation member of Houston's Pipefitters Local Union 211. He's also an instructor at the local's apprentice school.

DON BOOTH: There's a lot of people, and especially these young people, that want to do things with their hands. They love to work outdoors, and they're not cut out for sitting in a classroom going through college. So this trade is really good for them. They can come out, learn a trade, make good benefits, good money, and it's a good career.


SCHNEIDER: Builders are also pressing Congress on immigration reform. Immigrants from Mexico and elsewhere in Latin America were a major source of construction labor before the housing crash. Many went home when the work dried up and have been unwilling or unable to return.

Republican Congressman Ted Poe's district stretches across much of Harris County, Texas. Poe says business has a legitimate problem and that allowing in more immigrant workers, on a temporary basis, should be part of the solution. But he says tougher enforcement of immigration laws must come first.

REPRESENTATIVE TED POE: You have to have border security before we can really accomplish anything in the immigration issue. Right now the border is not secure as it could be. That has to be done before we move down the road on specific problems in the area of immigration.

SCHNEIDER: A survey of Texas manufacturers just released by the Federal Reserve Bank of Dallas reveals new construction is putting strong upward pressure on wages and benefits. Companies are finding they have little choice but to offer higher pay and retention bonuses in order to attract and keep workers. If they don't, those workers are likely to ditch them for their competitors. In some cases, it's as easy as walking across the street.

For NPR News, I'm Andrew Schneider in Houston. Transcript provided by NPR, Copyright NPR.

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