The U.S. Furniture Industry Is Back—but There Aren’t Enough Workers

The U.S. Furniture Industry Is Back—but There Aren’t Enough Workers

By Ruth Simon
Via wsj.com

Companies expanding American production due to consumer preferences and tariffs are finding a dearth of skilled workers

HICKORY, N.C—Here’s the good news: There are now more reasons to make furniture in the U.S. than at any point since the financial crisis. Crate & Barrel and Williams-Sonoma Inc. are expanding manufacturing in the U.S., and the factories of longtime furniture makers are humming.

Here’s the bad news: There aren’t enough skilled workers available to support the renaissance.

Manufacturers across the country are struggling to fill open slots in a tight U.S. labor market. Furniture companies, which for decades have been hit by competition from China, face special challenges after years of shrinking. A generation of prospective sewers and upholsterers have steered clear of the industry, leaving it heavily reliant on an aging workforce.

At Century Furniture, based in Hickory, N.C., delivery times have stretched to nearly nine weeks because of the worker shortage, which has caused the company to lose orders.

“I walk around our factories every other day and am spooked by what I see,” said Alex Shuford III, chief executive of RHF Investments Inc., owner of Century and several other furniture brands. “The retirements are coming and I can’t find enough people.”

The turnabout for a once-beleaguered sector has been spurred in part by the internet, which has reshaped shoppers’ behavior and expectations. Consumers demand their choice of fabrics and features but don’t have the patience to wait two months for an item to arrive from Asia. At the same time, tariffs are stepping up pressure on American manufacturers to move production home.

Roughly 90% of dining tables, bookcases and other wooden furniture are now made abroad, according to Mann, Armistead & Epperson Ltd., an investment banking and research firm. But U.S. factories still churn out about half of upholstered furniture sold in this country, much of it in places like Catawba County, in the foothills of the Blue Ridge Mountains.

Custom upholstery requires skilled labor and isn’t well-suited to long production runs of the same items common in overseas factories. Upholstered sofas and chairs are also more costly and difficult to ship than tables and bookcases, which can be easily stacked and reassembled. Shipping a single custom item from overseas can also be too costly.

“Pretty much all the companies that survived the last crisis have been in a growth mode,” said John Bray, chief executive of Vanguard Furniture Co., which has about 600 employees. “When business picked up, there just weren’t enough skilled people.”

Chad Ballard, 28 years old, was building swimming pools and trimming trees in Daytona Beach, Fla., when he decided to move to Hickory and then take a chance on an entry-level job at Century. Now, four evenings a week, he studies upholstery at Catawba Valley Community College in Hickory, a skill that could boost his annual pay to $45,000 within a few years and, if he can master the craft, to $75,000 or more.

Hiring Mr. Ballard was a small victory for Century, which in any given week has about 35 openings for sewers, upholsterers and other trades. “He came to us through a temporary agency,” said Amy Millsaps Guyer, vice president of human resources at the furniture maker. “We won the lottery.”

Furniture makers used to dominate the economies of places like Hickory. But the industry shed roughly 250,000 production jobs from its peak in 2000, leaving about 295,000 such workers in the U.S. today, according to the Bureau of Labor Statistics.

Some older, more experienced workers were able to hang on, but furniture makers largely stopped hiring during the 2008 recession, leading to a dearth of workers ages 35 to 50. In the Hickory area, 42% of sewing machine operators and one-third of upholsterers are 55 or older, according to the Catawba County Economic Development Corp.

“Parents would say, ‘Stay away. You will lose your job,’ ” said Bill McBrayer, director of human resources for Lexington Home Brands, a furniture maker in Thomasville, N.C. “How do we get the young and old to come back to the industry?”

One answer is the Catawba Valley Furniture Academy here, created by local companies struggling to find skilled employees in partnership with Catawba Valley Community College. Furniture makers are also, for the first time, creating internal training programs and adding benefits such as free health clinics.

“My dad has been in furniture his whole life,” said Nathaniel Kaylor, a 21-year-old student at the academy. “He told me from the get-go to stay out of it. You get old fast. Go to college.”

“Parents would say, ‘Stay away. You will lose your job,’ ” said Bill McBrayer, director of human resources for Lexington Home Brands, a furniture maker in Thomasville, N.C. “How do we get the young and old to come back to the industry?”

The academy launched in 2014 at the urging of five local companies, which helped develop the curriculum, donated supplies and provided employees whom the college pays to serve as instructors. Students spend eight months studying manual cutting or sewing, at a total cost of around $425; an 11-month upholstery program costs about $600.

“The good news is we can graduate 150 people a year,” said Vanguard’s Mr. Bray. “The bad news is that the industry needs 800 to 1,000 people.”

Vanguard opened its second manufacturing operation in Hillsville, Va., five years ago because it couldn’t find enough skilled workers in Hickory. To better attract young workers who balk at a 6:30 a.m. start time, Vanguard is looking at how to create a flexible schedule that will allow some workers to have a later start time and still get a full eight hours out of a production shift.

Competition for furniture academy graduates is so keen that Lexington’s Mr. McBrayer sometimes swings by in the evening to get to know the students before graduation. To find recruits, he speaks to parent-teacher organizations, high-school classes and Rotary clubs.

“The toughest question,” the 61-year-old executive said, “is the one that haunts us forever: What makes me think that if my child goes into this industry it will be there in two years?”

Kevin Sierks, chief financial officer of Crate & Barrel, a unit of Otto GmbH & Co KG, said quick delivery is another advantage for U.S. factories. “It’s no different than the fashion industry.”

Screen Shot 2019-12-06 at 10.25.28 AM

The Northbrook, Ill., retailer outsources most upholstered furniture production to three U.S. companies. It recently made its first investment in U.S. manufacturing, working with a Hickory-based startup on a new $3.1 million factory that aims to shrink production time to two weeks.

Chinese companies are also looking to cater to the changing demands of U.S. customers. This fall, Samson Holding Ltd. , which manufactures in China, acquired Southern Furniture, a nearly century-old, Conover, N.C., maker of custom upholstered furniture. “We were only going to take it to the next level by offering special orders, which is difficult to do” from Asia, said Jeff Scheffer, the North Carolina-based chief executive of Samson’s Universal Furniture unit.

Jason Buck, 21, planned to start his furniture studies in mid-July, but classes were delayed until September because there weren’t enough students. At Catawba Valley Community College, 197 students were enrolled in the welding program this fall, nearly three times the 67 studying furniture making.

Williams-Sonoma last year asked the college to create an eight-week training program. The shorter program focused on basic sewing and upholstery skills and was followed by eight weeks of in-house training.

“The labor market is very tight in North Carolina,” said Darryl Webster, the executive in charge of Williams-Sonoma’s manufacturing operation. “I quickly realized that you need to be literally standing there before they graduate offering them a job.”

Williams-Sonoma’s newly opened manufacturing facility in Baldwyn, Miss. Photo: Andrea Morales for The Wall Street Journal

When Williams-Sonoma opened its fourth upholstered furniture factory this year, a process accelerated by tariffs, it set up shop in Baldwyn, Miss., because of the area’s deep pool of talent. Still, a job fair held at a nearby community college last December produced 200 applicants, but just 15 hires. “Probably 50% didn’t have any experience,” Mr. Webster said.

Bonita Hawkins, 51, had a job offer from Williams-Sonoma in Hickory even before she earned her certificate from the furniture academy in 2016. “All over the city, I see signs looking for upholsterers, for sewers,” said Ms. Hawkins, who made custom clothing in Los Angeles before moving to North Carolina.

Craftmaster Furniture Inc., based in nearby Taylorsville, N.C., recently set out yard signs offering a $2,000 signing bonus for experienced seamstresses. Soon after, a friend told CEO Roy Calcagne that he had spotted the signs in a competitor’s trunk. “It’s every man for himself when it comes to hiring people,” Mr. Calcagne said.

Craftmaster has a doctor and nurse offering free medical care on site four days a week, and gives raises every four weeks to trainees who show improvement. “The old-school way used to be that you were lucky to have a job,” Mr. Calcagne said. “The way we look at it today is we are lucky to have you here.”

501 (c)(3) Workforce Development Organization

© 2018 Bridging America’s Gap. All Right Reserved.

Going Big At The Demo Expo

Going Big At The Demo Expo

Tom Pfister 9/20/2019
Via Forbes.com

 

Big. Thirty acres big.

The International Construction and Utility Equipment Exposition is charged up and powered on for October 1 – 3, 2019, at the Kentucky Exposition Center in Louisville. Equipped with test drives and hands-on product demonstrations, the biennial event is naturally branded the Demo Expo.

Billed as North America’s largest utility and construction trade show, more than 18,000 utility professionals will attend ICUEE — pronounced Eye-Q. Utility companies and construction contractors anticipate ICUEE for access to new technologies, innovations and trends.

“Industry trade shows like ICUEE are prime opportunities to see the latest and greatest equipment set to go to market,” said ICUEE Show Director John Rozum. “There’s simply no better place for attendees to find new ideas, make new connections and – most importantly – discover new solutions.”

The Association of Equipment Manufacturers (AEM) owns and produces ICUEE, and with it, brings together manufacturers and suppliers with purchasers and utilities. AEM is the premier trade association for off-road equipment manufacturers and suppliers, and is known for best-in-class conferences and trade shows. AEM’s ICUEE is a Gold 100 trade show, and won top honors in 2016 as the largest biennial exhibition, as compiled by Trade Show Executive magazine.

“As the U.S. utility industry grows,” Rozum said, “our attendees need the equipment to keep the lights on and the water flowing.”

The Demo Expo has the type of equipment that makes construction projects and utility work on some of the more impossible properties, well, possible. Whether it’s preparing a site for a healthcare facility, or bringing broadband to rural communities or reclaiming abandoned mine land, the right equipment is key to completing projects.

The same holds true for emergency response equipment deployed by utilities and contractors in the aftermath of hurricanes, tornadoes and wildfires. Heroes, human kindness and dependable equipment go a long way after disasters.

Go Big Before You Go Home

AEM thinks this year’s expo will be a record-breaker, their largest-ever ICUEE. Indoors and outdoors ICUEE is expanding, to almost 1.3 million net square feet of exhibit space.

“The ICUEE show experience is changing and we’re expanding our footprint to accommodate new exhibitors — exhibitors who want to bring more product and technology to help our attendees do their jobs better, faster and safer,” continued Rozum.

“ICUEE 2019 will cover more than 30 acres of the industry’s latest technology and equipment, hands-on equipment test drives and interactive product demonstrations — with more than 240 utility industry product categories, and more than 200 new exhibitors joining longtime favorites. They’re all here to help attendees find the right jobsite solutions.”

A sample of exhibitors at ICUEE Demo Expo includes:

  • Altec
  • Bronto Skylift
  • CASE Construction Equipment
  • Cummins Inc.
  • Ditch Witch
  • Ford Commercial Vehicles
  • Hyundai Construction Equipment Americas Inc.
  • John Deere Construction & Forestry Company
  • Milwaukee Tool
  • Railhead Underground Products LLC
  • Subsite Electronics
  • Tulsa Rig Iron
  • Vermeer Corporation
  • Versalift
  • Of course, because this is Demo Expo, many more

Bridging The Gap

In addition to adult educational offerings at ICUEE, today’s youth will get an up close look at skilled labor careers.

AEM is partnering with the workforce development organization Bridging America’s Gap to host what they call their Career Skills Event – a career day at the expo for more than 350 students from high schools and tech schools, from as far away as Indianapolis.

“AEM is excited to work with Bridging America’s Gap, and ICUEE and our exhibitors are looking forward to meeting our student attendees and showing them how rewarding an industry career can be,” said Julie Davis, AEM’s director of workforce development in a statement. “AEM has worked for many years to help strengthen and expand tomorrow’s industry workforce, and we are dedicated to helping our members, exhibitors and industry segments attract and retain talent.”

The student groups will rotate at learning stations onsite, including simulators for a unique view of skilled trade professions. The organized visit is a pivotal moment to listen to industry professionals share experiences of how they got involved in the trades and what they love about what they do.

It’s not too late to go to ICUEE Demo Expo in Louisville, but registration is required to attend.

“Trade shows are all about the experience that you can’t get online,” Rozum added. “It’s more than sitting in the seat of different models of equipment to demo the features – it’s having a conversation with the people who made it and know what makes it tick.”

501 (c)(3) Workforce Development Organization

© 2018 Bridging America’s Gap. All Right Reserved.

Tax Incentives Needed To Close Workplace Skills Gap

Tax Incentives Needed To Close Workplace Skills Gap

9/07/2018

The need to increase the workplace skills of the American workforce has become more urgent as the economy grows at a 4% annual clip.

Companies are hiring, but can’t find enough workers to fill available positions.

The most recent job numbers from the U.S. Bureau of Labor Statistics tell the story: there are nearly 6.7 million available, unfilled jobs — a number that exceeds the number of unemployed Americans (at just under 6.3 million) by 400,000.

Traditionally “blue collar” jobs, long seen as evaporating, are among the subset of unfilled positions. For example, there are nearly 500,000 manufacturing jobs available, but no one filling them; and more than 260,000 unfilled construction jobs — all of which require some degree of skills lacking among too many Americans.

Congress and the Trump administration have taken some steps to address this “skills gap” in the workforce, most recently by the congressional reauthorization last month of the Carl D. Perkins Career and Technical Education Act signed by the president. President Donald Trump also issued an executive order last year to expand the number of apprenticeships in the country.

More can be done. More needs to be done.

U.S. Representative Lloyd Smucker of Pennsylvania, who previously ran his family-owned commercial construction firm, introduced legislation earlier this year titled the USA Workforce Tax Credit Act to provide a credit against personal and corporate income taxes for investing in workforce development programs, apprenticeships and K-12 scholarship funds.

The bill (H.R. 5153) would provide a maximum $250,000 federal tax credit to spur individuals and companies to invest in improving the skills of workers and improving the educational opportunities of children to attend a better school. The legislation now has about three dozen co-sponsors.

This bill constitutes a new approach to addressing a real economic and human need, and would supplement existing federal and state efforts at job training and funding CTE programs by getting private interests to step up efforts to develop more workers to meet their needs.

Support for this legislation is far and wide, with a coalition of nearly 300 organizations ranging from labor, business, religious and not-for-profit entities from throughout the country.

Representatives from various trade organizations have weighed in strongly in favor of Rep. Smucker’s bill.

Workplace Skills: Upgrade Needed

Lois O’Connor, executive director of the Ammonia Refrigeration Association, recently stated “If you are an individual business owner and you have this tax credit, you can put it back into education, into trades and skills training.” Businesses can also “work with school systems to establish programs” to equip students with workplace skills.

Tom Weisenbach, Director of Business Development at the National Transportation Center based in Indianapolis, remarked that this bill “would be critical for us because the funds that would be generated from the tax credit would get to go to nonprofits that provide training for careers.”

One recurring theme among these and other leaders in industry and trade groups is the need to step up contact among businesses and educators, both for recruitment efforts, information flow and curriculum development, among other needs. Providing tax incentives to increase these and other activities and partnerships is vital to increasing the skills and qualifications of more workers, especially young people beginning their careers.

Congress and the administration have a plethora of issues to address in the remaining session, including passing appropriation bills for the 2019 fiscal year, and passing additional tax legislation. The USA Workforce Tax Credit Act is timely and urgent. It should be among the measures adopted before the year concludes.

Murphy is vice president of the Invest in Education Coalition.

501 (c)(3) Workforce Development Organization

© 2018 Bridging America’s Gap. All Right Reserved.

Boots On The Ground: Why A Military Veteran Might Be Your Next Best Hire

Josh Shaffer understands how overwhelming it can be to transition from the military to a private-sector career.

Having enlisted in the US Marine Corps at age 18, just after 9/11, Shaffer served for almost 12 years, including three combat tours in Iraq. During part of that time he was a communications specialist calling in air strikes in support of special operations. But when he transitioned from the Corps in 2013 with a bachelor’s degree in business, earned toward the end of his service, he still wasn’t sure what he wanted to do with the rest of his life. “Here I was, 30 years old, and I’d spent my entire adult life in the military, so that’s all I knew,” he recalls.

Shaffer landed on his feet, eventually ending up doing military-veteran recruiting at JP Morgan Chase before moving to Oracle in November 2015, now serving as one of two veteran-recruiting program managers at the global technology company.

But Shaffer doesn’t forget the uncertainty and angst of his transition from military man to corporate citizen. As part of his duties at Oracle, he’s responsible for showing the thousands of ex-military job candidates he sees each year how their extensive training and rich experiences translate to the corporate world, calling on his own journey from grunt to gunnery sergeant and Marine Corp recruiter (the Marines named Shaffer its national recruiter of the year in 2009).

“I have candidates reaching out to me every day,” he says of his work at Oracle. “The one thing I really want to convey to them is that this is something I’m passionate about, something that I personally have dealt with. I understand the pain and how difficult it is. And I will do anything I can to help these guys out.”

Improved Job Market

Fortunately, the job market is much better than it was just two or three years ago, when Shaffer left the military. The US veteran unemployment rate is now at about 4.5%, according to the Bureau of Labor Statistics, down from more than 7% in 2013 and below the current 5.5% rate for the total US population. Helping matters has been a US Department of Labor rule, enacted in 2013, which requires companies that do business with the federal government to make veteran hires at least 7% of their total new hires, a percentage consistent with the percentage of vets in the US workforce.

Among Oracle’s partners as the company seeks to bring in talented military veterans is Hiring Our Heroes, a US Chamber of Commerce initiative that conducts summits on military bases across the US; Warriors to Work, a veteran-employment program under the Wounded Warrior Project; and RecruitMilitary, an organization owned and run by vets that operates career fairs nationwide. Shaffer estimates that he and fellow Oracle program manager Cory Middleton will see a couple of hundred candidates at each RecruitMilitary fair, inviting the most promising ones to visit the company’s Veterans Programs website, where they can find more information and schedule a phone interview. Shaffer and Middleton provide candidates who progress with basic resume and career coaching, before connecting them with hiring managers across the company.

“When they come in, a lot of their resumes look like what most of the American public think of when they think of the military—this guy spent 10 years kicking down doors or sleeping in the desert somewhere,” Shaffer says. “We help them to translate those skills, so if they worked in, say, operations in the military, then they can work in operations, supply chain management, and those types of roles in the civilian world here at Oracle.”

Oracle also hosts its own career events. At one in Colorado Springs in February, the company’s Oracle Fusion Applications support group brought in 20 candidates, all veterans, sourced from LinkedIn, Indeed.com, and various job fairs, and then screened via phone interviews. The group ended up making offers to seven of those candidates, most of whom were due to start work the second week of April.

Oracle also plans to host a series of quarterly receptions nationwide, dubbed Oracle Veteran Talent Connections, for which it will invite up to 100 military-veteran candidates to network with 50 or so Oracle recruiters and hiring managers. The first reception will take place in Austin, Texas, on May 20, followed by a reception in Reston, Va., in the third quarter and one in Denver in the fourth quarter.

“This is really cool because some of these groups we work with never really considered military before, and they didn’t know what to look for in terms of the skill set,” Shaffer says. “So what we do is help them look for a match. Maybe candidates don’t have exactly the civilian experience the job description calls for, but they have something comparable.”

So, for example, if an Oracle group is looking for somebody with B2B procurement or contract management experience, Shaffer’s team will evaluate candidates with supply and logistics experience, or ones who managed procurement or other kinds of contracts while an officer or NCO.

Current and former service people can also take advantage of military-funded technical certification programs in information security, network administration, C++ programming, and the like. Oracle itself runs the Oracle Workforce Development Program, which offers US veterans affordable, industry-recognized training programs that support Oracle certifications. “But the thing that makes the biggest difference when these candidates get in front of our hiring managers are the intangibles,” Shaffer says. They’re prompt, professional, articulate, confident, mature.

‘Good Cultural Fit’

He gives the example of a candidate hired out of that event in Colorado Springs, a former enlisted man with an associate’s degree who had run network security for the US Air Force Academy.

“He is just a great communicator with tons of leadership experience,” Shaffer says. “This is a guy they probably never would have even considered if they just looked at his resume. But they were so impressed with him at the networking reception that instead of bringing him in at an individual contributor level for one of their support roles, they’re bringing him in as a manager. So even though he’s never worked on Fusion applications before—and in fact the realm of tech that he had been responsible for was really not related at all—it was just a good cultural fit. They realized that this is somebody they need on their team.”

Another thing military veterans have going for them is that they tend to stick around—national statistics show attrition rates for vets in the civilian workforce are lower on average than for their civilian counterparts. “They’re used to committing to something for a long time,” Shaffer says. “At a minimum they have a four-year commitment, and a lot of them do a lot longer than that. In a day and age when people don’t stay at jobs very long, employers are looking for people who want to contribute for a long period of time.”
I asked Shaffer whether he and Middleton still need to sell Oracle hiring managers on why they should consider former military people, even given their obvious attributes.
It’s more about raising awareness, he says, especially among managers used to only bringing in people with a narrow set of technical skills or credentials for certain positions.

“We have to explain to them that, hey, these former military people are good communicators,” he says. “Yes, there is going to be a little bit of a learning curve, but after they get in the door, you’re going to be so impressed with what they can do in such a short time. And usually what it takes is for one group to take a chance, and then once they get someone onboard, they’re coming back for more.”

One Oracle group that’s onboard is the company’s North American Commercial Applications organization, which under a program called Operation Forward March is hiring US military veterans for sales consulting positions. The group recently hired 33 of 45 candidates it had brought in for OFM gatherings across the country, Shaffer says, and more such events are planned for the summer, mainly in Reston and Denver.

Not Just for Officers

Another common employer misconception is that only former officers, not enlisted people, are cut out for corporate managerial and leadership roles. Oracle has hired men and women from every military branch, from infantrymen, combat engineers, operations specialists, chief logistics readiness officers, and platoon sergeants all the way up to rear admirals and brigadier generals. “That guy I referred to earlier: He was hired for the most senior job out of the group, and he was an enlisted guy with an associate’s degree,” Shaffer notes.

On the flip side, a candidate’s high-level military leadership experience shouldn’t preclude him or her from being considered for a nonmanagerial job, he says.
“A lot of these candidates have leadership and management experience, but they’re willing to start at the bottom if they have to, or at least at a midlevel without it being a manager role,” Shaffer says. “But a lot of hiring managers shy away from candidates like that because they think they’re not going to be happy if they’re in an individual contributor role.

“That’s more of a perception thing. And that’s something I try to manage with our hiring managers. Yes, this guy has 20 years of experience. Yes, he was a sergeant major or a captain or a major when he got out, but he understands that he’s moving into the corporate environment where he’s never worked before, and he’s willing to work his way up.”

I asked Shaffer whether the accomplishments and innate grit of some military-veteran candidates can intimidate some hiring managers.

“There’s a little bit of that, but it’s more along the lines of, ‘We don’t want them to come in if they’re not going to be happy being led by somebody else because they have all this experience.’ In fact, one of the candidates we had for this last event is a finance guy. He’s got 20 years of experience and was a lieutenant colonel when he got out of the Army, but he said very straightforwardly, ‘One of the things I learned in the military is how to be a leader, but one of the other things I learned is how to be a good follower,’ because everybody in the military has a boss. Even the commandant of the Marine Corps still reports to the Joint Chiefs of Staff, still reports to the president, so everybody has to learn a little bit of humility in their job.”

Shaffer emphasizes that his and Oracle’s work with veterans isn’t just an altruistic exercise. It makes good business sense.“We’re not just hiring these veterans because it’s the right thing to do or because we feel patriotic or because it makes us feel good,” he says. “The veterans will help drive revenue and improve the bottom line. And that’s what I try to sell, besides the fact that they have these intangible skills. But I do think it’s important that we consider the fact that these guys have sacrificed so much in their lives.”

Josh Shaffer, veterans’ recruiting program manager for Oracle.

501 (c)(3) Workforce Development Organization

© 2018 Bridging America’s Gap. All Right Reserved.

Record 95,102,000 Americans Not in Labor Force; Number Grew 18% Since Obama Took Office in 2009

(CNSNews.com) – Barack Obama’s presidency began with a record number of Americans not in the labor force, and it ended the same way.

The final jobs report of the Obama presidency showed that the number of Americans not in the labor force increased by 14,573,000 (18.09 percent) since January 2009, when Obama took office, continuing a long-term trend that began well before Obama was sworn in.
 
In December 2016, according to the Labor Department’s Bureau of Labor Statistics, a record 95,102,000 Americans were not in the labor force, 47,000 more than in November; and the labor force participation rate was 62.7 percent, a tenth of a point higher than in November.
The participation rate dropped to a 38-year low of 62.4 percent on Obama’s watch, in September 2015. It was only 3-tenths of a point higher than that last month.
 
People over age 16 who are no longer working or even looking for work, for whatever reason (retirement, school, personal preference, or gave up), are counted as not participating in the labor force.
 
When President Obama took office in January 2009, 80,529,000 Americans were not in the labor force, the highest number on record. That number rose steadily during his two terms, reaching a record 95,055,000 in November 2016, then setting another record (95,102,000) in December.
 
BLS said the December unemployment rate increased a tenth of a point to 4.7 percent, well below the Obama-era high of 10 percent. Last month, a record 152,111,000 Americans were counted as employed, up 63,000 from November; and the number of unemployed stood at 7,529,000, an increase of 120,000 from the prior month. But people who stop looking for a job are no longer counted as unemployed.
In an interview with a Chicago reporter yesterday, Obama said he has done “an enormous amount” to create greater economic opportunity for Americans. “I took an economy that was about to go into a Great Depression, and we’ve now had a little over six years of straight economic job growth, an unemployment rate that’s down below 5 percent, and incomes that have gone up and poverty that has gone down.”
 
Obama also conceded that “there are still folks out there who struggle and communities that are still depressed.” He called it an “ongoing battle.”
“We have to continue to work to make sure that kids are getting the best education they can, that jobs are being located so that people in need can access them, and that’s going to be something that I suspect we’ll all be working on, and folks will still be working on after I’m gone.”
 
During Obama’s two terms in office, the number of employed Americans reached its lowest point – 138,013,000 – in December 2009. Eight years later, in December 2017, 14,098,000 Americans have been added to the employment rolls.
 
The government collects payroll taxes from Americans who work, and some of that money is spent on government programs that support people who do not work. So the more who work, the better for the economy.
In December, the nation’s civilian noninstitutionalized population, consisting of all people age 16 or older who were not in the military or an institution, reached 254,742,000.  Of those, 159,640,000 participated in the labor force by either holding a job or actively seeking one.
 
  • The 159,640,000 who participated in the labor force equaled 67.3 percent of the 254,742,000 civilian noninstitutionalized population.
  • According to BLS, total nonfarm payroll employment rose by a lackluster 156,000 in December. Over the past 3 months, job gains have averaged 165,000 per month.
  • Among the major worker groups, the unemployment rates for adult men (4.4 percent), adult women (4.3 percent), teenagers (14.7 percent), Whites (4.3 percent), Blacks (7.8 percent), Asians (2.6 percent), and Hispanics (5.9 percent) showed little change in December.
  • The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 1.8 million in December and accounted for 24.2 percent of the unemployed. In 2016, the number of long-term unemployed declined by 263,000

501 (c)(3) Workforce Development Organization

© 2018 Bridging America’s Gap. All Right Reserved.

Older Americans Are Retiring in Droves

The exodus of the baby boomers from the work force resumes.

Photographer: Brendon Thorne/Bloomberg
More and more baby boomers begin the new year with nothing on their schedule but plans to golf, travel, and spend more time with the grandkids.

The number of Americans aged 65 or older without a disability that aren’t in the labor force rose by 800,000 in the fourth quarter of 2016, marking the resumption of a long-standing trend: the exodus of their generation from the work force and into retirement.

For more than five years, the six-month trend for this figure — a significant demographic source of downward pressure on the headline labor force participation rate — had been heading higher, before plateauing for most of 2016. The labor force participation rate for this cohort tanked by a full percentage point, to 23.6 percent, in the final quarter of the year.

Data on flows in and out of the labor force back up this story, with the six-month trend in Americans moving from employment to outside the workforce (a loose proxy for retirements) notably accelerating since October.

Whether a larger share of senior citizens had previously been incented to remain in their jobs by higher wages or by a need to keep working to rebuild their nest eggs after the financial crisis is still an open question. But the recent non-farm payroll reports affirm that the secular trend of rising retirements can only be delayed for so long.

Images: Bloomberg

501 (c)(3) Workforce Development Organization

© 2018 Bridging America’s Gap. All Right Reserved.

Why Do We Have A Skilled Trade Shortage?

 
We may not have enough skilled workers to go around. How did it get to this point?
 
Every day, the shortage in the skilled trades becomes more acute. According to numbers from the National Electrical Contractors Association, 7,000 electricians join the field each year, but 10,000 retire. And as job openings continue to increase without new laborers to fill them, the situation could impact every element of home services: wait times, work quality and cost.
 
An array of circumstances planted the seeds of the current trade shortage in the early 2000s. Several developments piled up to create the perfect storm that threatens to leave plumbing, electrical, carpentry and other skilled trades with a severe worker shortage in the years to come.
 
Industry experts say the trades lost nearly a million skilled workers during the recession that have yet to be replaced, and as older workers retire, the crunch will get even tighter.
 
Schooling, recession laid the groundwork
 
The elimination of shop class in high schools played a big role. For many students, this was their first exposure to the kind of hands-on experience that could ignite a career in a trade. “Taking shop and mechanical classes out of school cut off the pipeline,” says Dan Taddei, director of education and certification for the National Association of the Remodeling Industry. “The No Child Left Behind Program forced them to shut down all those things and focus on college.”
 
The Great Recession compounded the problem. Countless contractors went out of business and never came back even when the economy rebounded. The trades lost a significant chunk of veteran workers and missed several years of potential worker training. Apprenticeships dropped sharply as contractors had to focus on struggling just to survive.
 
“The construction industry lost 1.5 million workers during the recession, and we’ve only brought back about 600,000,” says Rob Dietz, Chief Economist and Senior Vice President for Economics and Housing Policy for the National Association of Home Builders. “The median age of a construction worker right now is more than 40 years old. The long-term problem is, who’s going to be the next generation of construction workers?”
 
The family-based nature of many trades added to the issue. “A lot of plumbing companies are second-, third- or fourth-generation,” says Brenda Dant, executive director of the Indiana Plumbing Heating Coolers Contractors Association. “Sometimes they retire and the next generation doesn’t want to get into the business, and suddenly we’re short one more company.”
 
Social pressure pushed workers away from trades
 
Spenser Villwock, interim CEO of Independent Electrical Contractors, a national trade association, says social pressure for college to the exclusion of all else created a disincentive for new workers. “The message became that you need to have a college degree or you’re a lesser individual,” he says. “We aren’t exposing people to these opportunities, and the funding model in public schools supports college-or-bust.”
 
Even new workers are aging, according to Bill Irwin, executive director of Carpenters International Training Fund. “Right now, the average age of a carpentry apprentice is 27,” he says. “The ideal age is 19.”
 
He says cultural trends drew new workers away from the trades. “Carpentry has a black eye because there’s a perception that it’s a job you get if you’ve dropped out of high school or have just been released from jail,” he says. “Now, it’s becoming a field that older workers, especially those who want union benefits, are turning to, but the goal is to identify qualified workers much earlier. There’s a lack of good information about what we really do and who we really are out there.”
 
Jan. 16, 2017

By Paul F. P. Pogue
@poguesrun

Paul F. P. Pogue is a veteran Indianapolis writer/photographer and has been a reporter for Angie’s List since 2006, investigating lead paint, electrical work, plumbing, HVAC and the nitty-gritty details of home maintenance.

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Where Does the Trade Shortage Go From Here?

The skilled trades face an uncertain future and a ticking clock.

The skilled trades face an uncertain future. The last few years have seen an increase in new workers entering the fields, but as more older workers retire and the shortage intensifies, the effect can be hard to predict.

Industry veterans see the tide turning somewhat, but freshly minted apprentices will require a few years to reach full status. As the pipeline shows improvement, the professional trades face a sharply growing shortage right now while they wait for workers to complete their training. This all could add up to the biggest crunch time taking place in the next few years.

According to the National Association of Home Builders, workforce problems have grown sharply every year since 2012. That year, 21 percent of builders reported to the NAHB that they had either some or a serious worker shortage, and that number jumped every year until it reached 56 percent in 2016.

U.S. Navy Petty Officer 3rd Class Larry O. Hughes performs maintenance on the internal phone system of the USS George H.W. Bush in 2010. As the trade shortage deepens, contractors often look to new sources for workers, such as military veterans whose training gives them a head start on the trade. (Photo courtesy of Seaman Apprentice Michael Smevog, U.S. Navy)

Fighting a ticking clock

In the meantime, all the trades face a race against time. The numbers are stark. Among electricians, for instance, the Bureau of Labor Statistics expects the need for new jobs between now and 2024 to be 85,900. But factor in retirements and veterans leaving the workforce for other reasons, and the total number of new job openings by 2024 will be 181,800. Kevin Tighe, director of workforce development for the National Electrical Contractors Association, says electricians are currently retiring faster than new apprentices are joining to take their place.

In the short term, we could see longer wait times for quality contractors. “It’s a supply and demand issue,” says Spenser Villwock, interim CEO of Independent Electrical Contractors, a national trade organization. “You have fewer contractors to choose from, and if we don’t have more people to perform the work, completion timelines are going to be way off.”
All agree the key is recruitment. Numerous fields are partnering with a major Department of Labor program, Apprenticeship USA, to draw new recruits from all walks of life. As part of their outreach, industries are targeting not just young people, but older workers who are looking for new careers and veterans with military training in the trades.

According to the National Electrical Contractors Association, 7,000 new apprentice electricians join the field each year, but 10,000 retire. That’s 27 electricians leaving the force and being replaced by only 19 every day.

Industry experts say they’re heartened by the $190 million Apprenticeship USA program. Tighe says he hopes to work with the program to reach out to potential recruits, and officials in President Barack Obama’s administration have made a point of visiting training facilities to increase interest.

In the meantime, the trades expand their ranks by reaching out to different sources of skilled workers. In past decades, apprentices were rarely older than their early 20s, but now it’s common to see apprentice tradespeople in their 40s. “We’re specifically focused on reaching out to minorities, women, the disabled and vets who have the interest and skill set needed to work in construction,” Tighe says.

Hope for the future

Jim Patterson, director of the Electrical Training Institute in Indianapolis, says he’s seeing the signs of improvement. “With the economy rebounding like it is, the competition for people entering the workforce is much more robust,” Patterson says. “Our applications numbers are way up. We had many more applicants in 2016 than 2015 for the electrical apprenticeships.”

Of course, preparing the future is a risky business. Bill Irwin, executive director for the Carpenters International Training Fund, notes that all these predictions assume a certain expectation of normalcy. “Twenty different economists can come up with 20 different predictions about what the economy will do, and there’s no guarantee we won’t see another recession in the next 10 years,” he says. “So we’ll have to wait and see.”

Villwock says the future belongs to the bold, the young people who reach out for the new opportunities. “You can really advance in an expedited way,” he says. “If they’re motived, if they can show those skills, if they have great business and technical sense, they can fill those vacancies sooner rather than later. We may be trying to make lemonade out of lemons, but I believe this offers a huge opportunity for young people.”
Everyone remains keenly aware of the stakes. “All our futures are going to be depending on the next generation coming up being able to handle what we’re building,” Tighe says.

Jan. 16, 2017
By Paul F. P. Pogue
@poguesrun

Paul F. P. Pogue is a veteran Indianapolis writer/photographer and has been a reporter for Angie’s List since 2006, investigating lead paint, electrical work, plumbing, HVAC and the nitty-gritty details of home maintenance.
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How Trade Companies Train Their Employees

 
A great deal of skilled trade training takes place within companies, as apprentices work their way up.
 
When Dave Mejean needs a new heating and cooling technician, the search starts at area high schools and career centers.
 
Mejean, co-owner of B&W Plumbing Heating & Air Conditioning in Indianapolis, asks teachers to introduce him to students with strong math or mechanical skills. He asks the students if they like working with their hands, if they can deal with customers and about their plans after high school. If the student answers “yes,” “yes” and “I don’t know,” Mejean provides the opportunity to learn about plumbing and HVAC repair.
 
B&W offers qualified high school seniors part-time work around their warehouse or helping technicians in the field. Students can earn full-time jobs after they graduate, and start learning essential skills of the HVAC trade, including how to braze copper and troubleshoot problems with air conditioning units.
 
Mejean turned to high school students because of problems finding qualified HVAC techs. Few were applying, and those who did didn’t impress during their interviews and trial periods. Eventually, Mejean realized he couldn’t wait for employees to come to him. If he wanted qualified workers, he needed to find them, and entice them to stay. “We’re at the point now where you almost have to grow your own people,” Mejean says.
 
The skilled trades face an uncertain future and a ticking clock. Jobs are plentiful, but workers are fewB&W isn’t alone. Across the country, trades including HVAC repair, plumbing, electrical contracting, home building and carpentry can’t find enough qualified employees.
 
Many trade workers retired or left their respective fields in 2008 during the housing crisis. But as the housing market improved, demand for qualified tradespeople rose, and should continue to rise for most of the next decade.
The growth rate for HVAC, plumbing and electrical contracting jobs is expected to grow between 12 and 14 percent by 2024, well ahead of the average growth rate for all other occupations, according to the Bureau of Labor Statistics.
 
Along with job growth, contractors need qualified tradespeople to fill the positions that older, experienced workers are leaving behind. These jobs also pay well. In 2015, the median annual salary for carpenters, HVAC technicians, electricians and plumbers was between $42,000 and $51,800.
 
So, what’s the problem?
 
Service providers say there’s long been a stigma against blue-collar jobs. High school guidance counselors typically steer students who have strong math, science and mechanical skills toward four-year colleges.
 
Few guidance counselors will tell the same students they can earn a living while training to become a master tradesman, says Dennis Schlekie, owner of Approved Plumbing Co. in Broadview Heights, Ohio.
 
“I wish schools would turn around and say, ‘College is not for everyone.’ There’s a very good living to be made in the trades,” Schlekie says. “There’s a huge amount of satisfaction when you become a good mechanic, and can go into someone’s home and solve all their problems.”
 
 
Mechanical Skills instructor Michael Cupp (right) trains apprentice Jordan Herrmann in copper offsetting at Mechanical Skills’ Indianapolis facility. (Photo by Frank Espich)
 
 
Good help is hard to find
For service providers, the shortfall means sorting through dozens of applications to find a single qualified candidate. “I tell (Angie’s List employees), if you can find me workers the way you find me customers, I would pay for that,” says Nick Cratsa, owner of Cratsa Construction in Murrysville, Pennsylvania.
 
Schlekie and Cratsa say there’s a misconception that trade work is only viable for high school dropouts, or someone who’s looking for an easy paycheck. Neither employer is interested in workers simply looking for a job. They need employees who have strong work ethics and are curious how things work.
 
Recently, Schlekie says he went through a stack of 65 applications while looking for a prospective employee, and out of the pile, only one or two could pass a mandatory drug test and background check. “We’re not even dealing with (technical) skills yet,” Schlekie says.
 
Schlekie says his workers regularly enter homes worth $500,000 or more, and he’s not going to hire anyone whom he thinks could embarrass the company.
“We’re not going to put just anybody in your home,” Schlekie says.
 
Cratsa says he expects to spend six months reviewing 30 to 40 applications for a single opening. Applicants who claim they have experience but can’t produce a resume get cut early. Others can’t pass a written test to determine their technical skills. “That separates the wheat from the chaff quickly,” Cratsa says.
 
Schlekie and Cratsa say they’ve tried to find employees through Craigslist ads, church announcements and local vocational schools, but those searches rarely produced applicants with the skills and worth ethic they desired.
 
For now, Schlekie and Cratsa say the best way to find qualified candidates is through word-of-mouth. At Current Electric in Brookfield, Wisconsin, president Chuck Smith has a sign posted outside reading “Good electricians attract good customers.”
 
Current Electric is always looking for more technicians. They employ a full-time human resources person whose job is to find out whether area electricians are happy with their current jobs. Current Electric interviews two to three applicants per week, and Smith says between 10 and 30 percent of those candidates have potential.
 
Smith says he asks interview candidates three questions: What motivated them to become a contractor? What hands-on projects have they been a part of? And where do they see themselves in three to five years? “They need to have a passion for their trade. And they need to show that passion in their actions. Actions are more truthful than words,” Smith says.
 
Median income for the major trades in 2015
  • Electrician: $51,880
  • HVAC tech: $45,110
  • Plumber: $50,620
  • Carpenter: $42,090
Source: Bureau of Labor Statistics
 
Training their workforce
 
Apprenticeships for HVAC techs, electricians and plumbers typically last between three and five years, depending on the trade. Each year, workers who are learning the trades must complete around 2,000 hours of on-the-job training, and between 144 and 246 hours of technical education, according to the Bureau of Labor Statistics.
 
Many employers are happy to provide that training, and sometimes pay for the education of hard workers who are willing to return the investment.
Current Electric pays for the apprenticeship training for qualifying new electricians at area technical schools. That’s $6,252 annually for each apprentice’s tuition, fees and for wages they earn while in class, says Sarah Jenkins, marketing coordinator for Current Electric.
 
When an apprentice plumber starts with Schlekie, he fronts the $1,800 cost of the first year of apprenticeship school. If new hires keep their grades and attendance up, Approved Plumbing covers the remaining tuition costs.
 
The service providers also budget time each week with new and veteran employees to review their successes and failures. Schlekie, for example, spends an hour with his crew reviewing every issue that arose the prior week. “We talk about it, why it happened, how to correct it,” Schlekie says.
 
When Cratsa hires tradesmen, he prepares them to do a little of everything.
Cratsa’s business focuses on kitchen and bathroom remodeling, and his workers need to know how to complete the necessary plumbing, electrical and carpentry work, as subcontracting the jobs would take too long. “It would take me six weeks to complete a job that should only take two weeks, trying to coordinate all the different trades,” Cratsa says.
 
When Cratsa hires someone, he’s looking for a worker who’s proven in at least one of the trades, such as plumbing or electrical contracting. Then, he offers to teach them the other skills.
 
 
 
 
HVAC tech Dave Sedam, right, of B & W Plumbing, Heating and Air Conditioning in Indianapolis, trains apprentice Bobby Alexander in replacing a furnace unit. (Photo by Frank Espich)
 
Retaining their workforce
Businesses take a risk training new employees because they could leave after a few years, taking what they’ve learned to the competition. That’s why businesses are constantly asking how to keep their employees happy.
“When we find a guy who likes to work with his hands and enjoys the trade, I will do most anything to keep him,” Schlekie says.
 
That includes keeping wages competitive, which can mean higher prices for customers, service providers say. Health insurance, retirement plans and paid vacations are also essential. Years ago, an electrician could only expect Christmas vacation. Now, they’re being offered weeks away. “We need to be able to provide that benefit. We don’t want to burn them out,” Smith says.
 
 
Jan. 16, 2017
By Tom Lange
@tlange
 
Tom Lange wrote about home improvement, moving, home security and other topics during his time at Angie’s List. He has degrees in journalism and film studies, and his interests include reading, running and the movies.

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Labor Shortage Squeezes Builders

Why are property prices rising so quickly? Here’s one reason.

A growing labor shortage in the commercial real-estate industry is driving up the costs of some projects and could complicate lawmakers’ plans for a $1 trillion infrastructure-spending program, contractors say.

“Ever since we came out of the great recession, many folks in our industry have been saying: it’s coming, it’s coming, it’s coming,” said George Nash Jr. , director of preconstruction for Branch and Associates, a Roanoke, Va., contractor. “Today the problem is there.”

Construction businesses, excluding those building single-family homes, employed close to 4.2 million workers in April, up 3,000 from March, according to an analysis by the Associated Builders and Contractors, a trade group. That was the highest employment level since November 2008, though still below the record 4.4 million workers employed in the nonresidential construction segment in February 2008, the analysis said.

Labor pressures are increasing in the construction industry as hiring overall accelerates across the U.S. economy. On Friday, the Labor Department reported that nonfarm payrolls rose by a seasonally adjusted 211,000 in April and the unemployment rate fell to 4.4%, the lowest level in almost a decade.

Among the hot pockets of construction activity are office development in New York and condominium and rental-housing projects in downtown Los Angeles, Boston and Miami. Big infrastructure projects include the modernization of Chicago’s O’Hare International Airport and a tunnel in Seattle that will replace a viaduct vulnerable to earthquakes.

Contractors throughout the country said that as the workload grows, they are beginning to see shortages of electricians, carpenters and other subcontractor laborers.
When they bid out jobs two years ago, several contractors said, two or three subcontractors would typically respond for each part of the project. Today they are running into situations in which there is only one bid, making it harder to hold down costs, they said.

Subcontractors said they also are feeling the pinch. Gaylor Electric Inc. of Indianapolis has opted against bidding on some jobs “because we didn’t have the people,” said Chuck Goodrich, the company’s president.

Gaylor has added 70 employees in the last two months but still has about 200 empty positions, Mr. Goodrich said. “The economy is growing, and construction jobs need to be filled,” he said.

Construction labor costs are rising an average of 4% to 5% annually, outpacing inflation, according to Anirban Basu, chief economist of the Associated Builders and Contractors. “The situation is going to get worse,” he said.

Over all, the association said the industry needs 500,000 more workers. The trade group estimates 600,000 additional workers would be needed for the $1 trillion in infrastructure building and improvement for which President Donald Trump has said he would seek funding.

The Trump administration has been preparing a major “workforce development initiative” as part of its infrastructure program, a White House spokesman said.
“We are committed to both rebuilding America and retraining American workers,” the spokesman said.

Industry executives said the scarcity stems partly from many workers idled by the downturn finding other jobs and retiring. Also, fewer young people are choosing construction as a profession.

Some subcontractors are teaming up and creating joint ventures to cope with the labor scarcity. Marcum LLP, an accounting firm, has structured 40 such ventures this year, more than twice the number for all of 2016, according to Joe Natarelli, who heads the New York firm’s construction practice.

“Typically, a contractor wants to keep the whole contract for themselves,” Mr. Natarelli said. “We’ll [now] see them joint-venture pieces of that contract because they don’t have enough labor.”

Construction companies also are stepping up their recruitment efforts. Willmar Electric Service, a fourth-generation subcontractor in Lincoln, Neb., recently hired a full-time staff member to search for workers at high schools, trade schools, military bases and other places, according to David Chapin, the firm’s president. The company has about 150 employees.

“We have a lot of people who came out of the [information technology] industry. They just found out they didn’t like working inside and wanted to work with their hands day-to-day,” said Mr. Chapin, who is a former chairman of the Associated Builders and Contractors.

Mr. Chapin said the firm has 18 months’ worth of work in its pipeline, the biggest backlog it has experienced in its 97-year history.
“We’ve been unable to fill all our openings,” he said. “We would like to hire more.”

Write to Peter Grant at [email protected]

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